Protectionism versus Free-Trad
The main objective of the following paper is to explain the protectionism versus free trade argument, to explain the problems this debate has created in the arena of international trade and to outline the ways in which international agreements have contributed to their resolve. Although many of the following issues are still present in the world economy today, they are constantly improving due to agreements such as the Uruguay Round and the North American Free Trade Agreement (NAFTA). Protectionism is easily related to the belief that a nation's resources need to be protected from international competition brought about by trade. Protectionist policies include trade restrictions which are of many natures. (See Appendix 1.A) Nations seek protectionist policy for various reasons such as: a source of government revenue,, to satisfy domestic interest groups and for the infant-industry argument among others. (See Appendix 1.B) The on-going debate regarding protectionist measures in the world economy seems to be an everlasting struggle.
Import tariffs will be the type of tariff discussed in this paper. The recent World Trade Organization (WTO) conference in Seattle, for example, turned into a political battleground where protectionists rioted against the "free traders". An example of a powerful cartel would be OPEC (Oil Producing and Exporting Countries). Tariffs Tariffs are additional costs, such as taxes, that are added to a commodity as it either enters or leaves a nation. Persistent dumping is also known as International Price Discrimination and occurs when a producer engages in dumping behaviours continuously. International cartels are prohibited in the US and are strictly regulated outside. Because tariffs depend on the price elasticity of the commodity it is very difficult to predict extra costs. International cartels are the fourth NTB we will examine. C) The effects of a tariff on the welfare of a nation result in gains only for the domestic suppliers and losses for the domestic consumers. Predatory dumping is a temporary practice which aims to drive foreign producers out of the market before raising prices back to the market price. D) Non-Tariff Barriers (NTB's) Although there is some confusion to whether quotas are considered non-tariff barriers we will consider them as NTB's in any further discussion. VERs are also very important NTBs as they are a type of quota themselves. They grew in popularity through the 1980's when tariffs began to fall.
Common topics in this essay:
Tariffs Tariffs,
VERs NTBs,
NAFTA Protectionism,
Price Discrimination,
,
World Market,
Morse Wooster,
Countries Dumping,
Organization WTO,
Barriers NTB's,
ntb examine,
tariff calculated fixed,
tariff calculated,
calculated fixed,
price charged,
dumping behaviours,
free trade,
non-tariff barriers,
international cartels,
world economy,
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Acceptance Essays
