3. Arguments For and Against Trade Control/Protection Flashcards
What is the infant industry argument for trade protection?
New industries may need protection from international competition until they become established and competitive.
How can trade protection safeguard national security?
By protecting industries vital for national defense from foreign dependence.
In what way does trade protection aim to preserve domestic employment?
By shielding local industries from foreign competition, thus preventing job losses.
What is a common argument against trade protection?
It can lead to higher prices for consumers and inefficiencies in domestic industries.
How can trade barriers lead to retaliation?
Other countries may impose their own barriers in response, leading to trade wars.
What is the impact of protectionism on resource allocation?
It can result in misallocation of resources, as industries that are not globally competitive receive support.
How does trade protection affect consumer choice?
It may limit the variety of goods available to consumers and increase prices.
What is the argument for protecting strategic industries?
Certain industries are crucial for national security and economic independence, warranting protection.
How can trade protection address environmental concerns?
By imposing standards on imports, countries can prevent environmentally harmful products from entering the market.
What is the potential long-term effect of trade protection on domestic industries?
It may lead to complacency and lack of innovation due to reduced competition.
