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InternationalBusiness 1

InternationalBusiness 1

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Published by: Sham on Mar 04, 2012
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07/23/2013

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Protecting Jobs and Industries

Perhaps the most common political argument for
government intervention is that it is necessary for
protecting jobs and industries from foreign competition.
Antidumping policies are frequently justified on such
grounds. The voluntary export restraints that offered
some protection to the US automobile, machine tool, and

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steel industries during the 1980s were motivated by such
considerations. Similarly, Japan's quotas on rice imports
are aimed at protecting jobs in that country's agricultural
sector.

In addition to trade controls hurting consumers, evidence
also indicates they may sometimes hurt the producers
they are intended to protect.

National Security

Countries sometimes argue that it is necessary to protect
certain industries because they are important for national
security. Defense-related industries often get this kind of
attention .Although not as common as it used to be, this
argument is still made. Those in favor of protecting the
US semiconductor industry from foreign competition, for
example, argue that semiconductors are now such
important components of defense products that it would
be dangerous to rely primarily on foreign producers for
them.

Retaliation

Some argue that governments should use the threat to
intervene in trade policy as a bargaining tool to help open
foreign markets and force trading partners to "play by the
rules of the game." Successive US governments have
been among those that adopted this get-tough approach.
If it works, such a politically motivated rationale for
government intervention may liberalize trade and bring
with it resulting economic gains. It is a risky strategy,
however, because a country that is being pressured might
not back down and instead may respond to the punitive
tariffs by raising trade barriers of its own.

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Protecting Consumers

The ban was motivated by a desire to protect European
consumers from the possible health consequences of
meat treated with growth hormones. It was motivated by
concerns for the safety and health of consumers, as
opposed to economic considerations. Many governments
have long had regulations to protect consumers from
"unsafe" products. Often, the indirect effect of such
regulations is to limit or ban the importation of such
products. The conflict over the importation of hormone-
treated beef into the European Union may prove to be a
taste of things to come. In addition to the use of
hormones to promote animal growth and meat
production, biotechnology has made it possible to
genetically alter many crops so that they are resistant to
common herbicides, produce proteins that are natural
insecticides, have dramatically improved yields, or can
withstand inclement weather

Furthering Foreign Policy Objectives

Governments will use trade policy to support their
foreign policy objectives. A government may grant
preferential trade terms to a country with which it wants
to build strong relations. Trade policy has also been used
several times as an instrument for pressuring or
punishing "rogue states" that do not abide by
international law or norms.

Protecting Human Rights

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Protecting and promoting human rights in other countries
is an important element of foreign policy for many
democracies. Governments sometimes use trade policy to
try to improve the human rights policies of trading
partners.

On the other hand, some argue that limiting trade with
countries such as China where human rights abuses are
widespread makes matters worse, not better. The best
way to change the internal human rights stance of a
country is to engage it in international trade, they argue.

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