Unit 4.3 - Arguments For and Against Trade Control/Protection
What you need to know and understand:
Key concepts:
Concepts to understand:
- Arguments for trade protection/advantages of trade protection, including:
- protection of infant (sunrise) industries
- national security
- health and safety
- environmental standards
- anti-dumping
- unfair competition
- balance of payments correction
- government revenue
- protection of jobs
- Economically least developed country (ELDC) diversification
- Arguments against trade protection/disadvantages of trade protection, including:
- misallocation of resources
- retaliation
- increased costs
- higher prices
- less choice
- domestic firms lack incentive to become more efficient
- reduced export competitiveness
- Free trade versus trade protection
Key concepts:
- Scarcity
- Choice
- Efficiency
- Equity
- Economic well-being
- Sustainability
- Change
- Interdependence
- Intervention
Concepts to understand:
- The increased interdependence of economies has benefits and costs.
- Increased economic integration may result in efficiency, welfare gains and improvements in economic well-being but the benefits may not result in equity.