Mil1 (1)

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University of Maine, Presque Isle**We aren't endorsed by this school

Course

BUS 430

Subject

Economics

Date

Dec 17, 2024

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Uploaded by DoctorProtonHorse28

There has been a debate about protectionism and free trade; to this day, it remains a centraltopic in economic discussion, especially regarding policy. What is my stance? It depends on the context of the country’s specific financial situation and goals, but usually, I would argue that limited protectionism should be utilized for emerging countries for these reasons. Protection of infant industries is essential, as they might struggle to compete against established foreign competitors. By imposing restrictions, tariffs, or quotas, the government can provide these industries with the necessary time and resources to grow and become competitive. Not only that, but similar to China, if other countries seek cheap labor, they should be allowed to set up shop, albeit not in all respects, this is to say it should do a strategic and selective market opening to take advantage of the benefits of free trade that allows a country to specialize in the production of goods where they can have a competitive advantage, leading to economic growth, yet still maintaining protection of key sectors and thus projecting domestic industries while importing foreign capital and technology that, with the correct policies, the local industries might not only adapt but also be given favorable conditions like manufacturing or the technological sector. This would also include the second benefit, which is the conservation of natural resources, as industries require them, so managing them to make sure that domestic needs are prioritized over exports, despite having these measures for natural resources, should seek toexpand their market share abroad, but in produced goods, not just raw materials, as this continues slowly, the strategic opening of some markets would result in lower prices and more choices for consumers; this, along with point one, would allow healthy competition; thisprocess is called controlled liberalization (Nathan Associates Inc. & Slaughter, 2004). This is because one fully implements protectionist policies that may provide short-term relief but would lead to inefficient products due to the lack of international competition, which would lead to the lack of incentives to innovate or improve the quality of the products or productivityas seen with Latin American protectionism.(Hauge, n.d.)While protectionism can provide temporary relief for certain sectors and support emerging industries in the country, in the long term it is not a viable solution; implementing it too early without developing the industry will make it too reliant on primary commodities to export, which are at the mercy of the volatility of commodity prices. This can worsen the trade of developing nations, leading to reduced incomes. This is why the choice between protectionism and free trade should be guided by carefully analyzing a country's short-term goals, unique circumstances, long-term goals, and potential impacts on domestic industries and consumers. It is important to balance the two so that it might offer a path towards sustainable long-term economic development that satisfies national interest during said development.Bibliography Nathan Associates Inc., & Slaughter, M. J. (2004). Infant-Industry Protection and Trade Liberalization in Developing Countries. In Research Report [Report]. https://pdf.usaid.gov/pdf_docs/pnacx950.pdf

Hauge, J. (n.d.). How protectionism can help developing countries unlock their economic potential. The Conversation. https://theconversation.com/how-protectionism-can-help-developing-countries-unlock-their-economic-potential-236637