Political Arguments and Rationale Behind Trade Intervention

Main protectionist policies include tariffs, quotas, embargos and voluntary export restraints, and Adam Smith’s idea of absolute advantage has been developed further to explain international trade. In recent years, protectionism has become closely related to globalization during which the influences of trades spread almost everywhere, so people insist upon the study of social deformities generated by improper policies on international trade and the task of pointing them out with a view to remedy. There are certainly both economic and political purposes of trade

Why does the U.S. government need to intervene in international trade by setting up the U.S. Commercial Service?

In modern economic policy of nations and states, the tariffs a tool to tax goods and services being imported. The principal desired outcome for this tool is to create security for the domestic industry from the imported product, which may be cheaper for consumers to purchase. (McEachern, 2015)

One of the major advantages of trading is that it allows producers to concentrate or specialize their work in the type of goods they produce best. When people decide to specialized in a specific profession an become doctors, farmers, teachers, or any other profession within an economy, they will be able to produce goods and offers different services that can be trade for any goods or services they may need. In this same way countries can become specialized in the production of specify products and/or services and trade those with other countries. However, trading and importing products and services from other countries also has its disadvantages. As a result of the different products imported governments impose certain restrictions and limitations to protect the domestic production and market of every country involve in any kind of trading transactions. Governments have imposed taxes on trading transactions adding them to the cost of importation, and have the purpose of restricting and/or limiting the imports of goods and services into a country. These government

The US was willing to go to extreme lengths to protect such an asset, and likely would do so again. This prompts the much valuable question, ‘If the United States did not depend so heavily in foreign oil would our economy be so fragile?

The Importance of Oil in U.S. Foreign Policy During the oil and energy crisis of the mid-1970s Americans became painfully aware of the consequences of the United States dependence on foreign sources of oil. Unfortunately, research and exploration for alternative sources of oil in North America has not been pursued vigorously enough to cease such foreign dependence. As a result, in the mid-1990s Americans find themselves in the same precarious position as they were during the 1970s. The Persian-Gulf War in 1991 was all the proof needed to convince the United States of how strongly oil still influences our foreign policy and international relations in general. Oil and U.S. Foreign Policy: Historical Issues The United

With economic globalization, international trade is developing and growing at an unprecedented rate. After China joined the WTO, international trade tariffs reduced significantly；many non-tariff barriers were also reduced. However, some countries have adopted some new trade restrictions in order to protect their industries and markets. The ‘green barrier’ policy is a kind of trade protection means which has been frequently used by the developed countries since the 1990s, it has created unequal trade relations for a vast number of developing countries and caused huge economic losses to these developing countries. It has become the new obstacle for international trade. Briefly, the problems are: first, an increase in the cost of enterprises, affecting the international competitiveness of enterprises and second, the implementation of ‘green trade’ barriers hindering the development of the Chinese export trade. This essay will examine these problems in more detail and seek to offer possible solutions.

In this I am going to assess the methods to increase trade between countries and the methods to restrict trade between countries. When asses the methods of encouraging and restricting trade I will talk about the purpose for the methods of promoting and restricting international trade, identify how and why they might be used and I will decide how useful each method is giving appropriate reasons for it. International trade is the exchange of goods and services between countries.

The country can maximize their wealth by putting the resources in the most competitive industries. Government created comparative advantage rather than free trade because now easier moves the production processes and the machines into countries that can produce more goods (Yeager & Tuereck, 1984). However, many countries now move to new trade theory suggests the ability firms to limit the number of competitors associated with economic scale (reduction of costs with a large scale of output) (Krugman, 1992). The comparative advantage occurs when two-way trade in identical products, it will useful where economic scale is important, but it will create problem with this model. As a result, government must intervene in international trade for protection to domestic firms (Krugman, 1990)

Economic policy of nations and states, tariffs are tools used to control the flow of goods, services and resources being brought into the country. The overall purpose is to create security for the domestic industry from the imported product. These products can sometimes be less expensive to purchase than the goods being manufactured in the local economy. (McEachern, 2015) The government does this either stimulate or deflate trade with other countries. (Fontinelle, 2012)

Countries are enabled by free international trade to specialise or to focus in the production of the goods in which they have a comparative advantage. Specialisation countries can take the benefit of efficiencies generated from increased output and economies of trade. The size of the firm’s market are increased by the international trade which results in lower average costs and increasing in productivity, as it ultimately leads to increase in production.

Free trade has long be seen by economists as being essential in promoting effective use of natural resources, employment, reduction of poverty and diversity of products for consumers. But the concept of free trade has had many barriers to over come. Including government practices by developed countries, under public and corporate pressures, to protect domestic firms from cheap foreign products. But as history has shown us time and time again is that protectionist measures imposed by governments has almost always had negative effects on the local and world economies. These protectionist measures also hurt developing countries trying to inter into the international trade markets.

Ever since the first involvement of government in international trade, many people have posed their opinion about what the role of government should be in it. Different factors are involved when it comes to deciding what this should be. It impacts a lot of people, so in order to do that, trade policy must be properly defined, identify what the roles of government currently are, and their involvement in it, and then analyse what should be their role. Trade policy is how a country carries out trade with other countries (Commercial Policy, n.d). Even though a lot of people support government intervention in international trade, countries would benefit a lot more if the government removes protectionism and promotes free trade instead.

The international trade of goods across the world accounts for approximately 60% of the world Gross Domestic Product (The World Bank, 2014). A great proportion of goods transactions occur every second. The primary question is whether international trade benefits a country as an entirety, and, if so, why would a country implement protective trade policies to restrict particular exports? To address this question, this essay aims to explore the impact of trade on various economic stakeholders, including consumers, producers, labour and government and, furthermore, will compare models and theories with reality to ascertain the true winner/ loser in the international trade market.

Government intervention in the trade process may be either economic or noneconomic in nature. [See Table 7.1.]