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Arguments in Favour of Protectionism Conference 2019
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What are the main arguments in favour of a country imposing one or more "protectionist" be missed!
measures? The main arguments supporting protectionism are outlined below. Learn more ›

Infant or Fledging industry Argument

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Certain industries have a possible comparative advantage but have not yet exploited
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sufficient economies of scale to bring their unit costs down to competitive levels. Short-
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term protection might allow an infant (or fledgling) industry to develop a cost advantage
at which point protection could be relaxed, leaving an industry to trade more freely on the Our AQA A Level
Business Grade
international market. Of course, the risk is that these controls become semi-permanent.
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Protection of Strategic Industries are designed to provide essential
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A government may wish to protect employment and investment in strategic industries,
students as they complete their
although value judgments are involved in determining what a strategic sector is.
preparation for Paper 1, Paper 2 and
Protection against Dumping Paper 3.

Dumping is a type of predatory pricing behaviour and can often be a concern for Learn more ›
domestic firms facing overseas competitors who are looking to offload their spare
production in international markets at very low prices. Goods are dumped when they are
sold for export at less than their normal value. The normal value is usually defined as the
price for the like goods in the exporter’s home market. In the short term, consumers Popular Content
benefit from lower prices of the foreign goods, but in the longer-term, persistent
undercutting of domestic prices can force a home-based industry out of business and
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then allow the foreign firm to establish itself as a monopoly. Once this is achieved the
A Level Business
foreign owned monopoly is free to increase their prices and exploit the consumer.
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Protection via tariffs on 'dumped' goods can be justified to prevent long-term exploitation
of the consumer.
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