free trade and protectionism

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Free trade and protectionism
Free trade: It takes place between countries when there are no barriers to trade put in place by governments or international organization. Good and services are allowed to move freely between countries
Protecting domestic employment
Protecting the economy from low cost labour
Protecting an infant (sunrise) industry
To avoid the risks of over-specialization
Strategic reasons
To prevent dumping
To protect product standards
To raise government revenues
To correct a balance of payments deficit

Arguments against protectionism
Red Tape
Health and Safety standards
Nationalistic campaigns

Protecting domestic employment industries that are in decline -
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Any change in the world markets for these products might have serious consequences for the country’s economy.

Strategic reasons protected in case they are at times of war (agriculture or steel) protected in order to stay competitive unlikely that they will not be in war ex US they wont go to war and if they do not on our turf they now have nuclear weapons that they can use.

To prevent dumping
Dumping is the selling by a country of large quantities of a commodity, at a price lower than its production cost in another country.
How can you prove dumping. If they can’t then is dumping a valid answer.not going to have access to their notes. WTO

May ruin the domestic producers in the developing country. Where countries can prove that their industries have been severely damaged by dumping, their gov. are allowed, to impose anti-dumping measures to reduce damage.

Gov. that subsidizes domestic industry may actually support dumping.

To protect product standards on imported goods for safety and match the standards of the domestic goods. the cost involved in meeting the product standard - trade barrier particular concern for producers in developed countries. (great cost and getting appropriate approval and documentation to prove that the standards have been met are extremely high). producers in develop. countries at a disadvantage - harder to exploit their comparative advantage successfully.
STDF - help developing
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