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The imposition of tariffs, quotas or other mechanism ( non-trade barriers) to restrict the inflow of imports. Arguments for protectionism:
Infant industry argument (e.g. Japan). Anti-dumping (below average cost of production also illegal under WTO rules.)
Raises tax revenue (how spent.) Correct a balance of payments deficit, however this will increase the exchange rate, whereas a floating exchange rate it should be self-correcting. Protect employment in declining (geriatric) industries (need to re structure nd rationalise to regain competitiveness- hence traditional arrangements . Strategic sector (e.g. agriculture, defence).
Arguments against protectionism (same as arguments for free trade):
The gains from trade argument (comparative advantage, efficiency). Trade barriers distort comparative advantage and reduce specialisation resulting in lower world output, lower growth, lower living standard (higher world inflation).
The following only apply to the country maintaining the tariff:
Higher prices and less choice for consumers (evaluation – benefits thinly spread, less vocal than other interest goods) Protects high cost, inefficient producers (encourages x-inefficiency as little incentive to cut costs. Hard to remove tariffs resistance from domestic producers and workers. (Evaluation effects severe and visible therefore will not vocal opposition from often powerful vested interests. Danger of realisation (could be one off tit for tat) Could spark full scale tariff war involving wide spread protectionisms measures by many countries. (GATT/WTO was set up to counter this)