GMS 724 Chapter Notes - Chapter 6: Infant Industry Argument, Export Restriction, Tied Aid
15 May 2015
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Protectionism: governmental restrictions that affect the ability of foreign producers to compete in domestic markets, done to give domestic companies competitive support. Each country seeks to influence trade, and each has economic, social, and political objectives: conflicting objectives, interest groups. Stakeholders are all the groups shareholders, employees, customers, society at large. With which a company must make satisfactory trade-offs if it is to survive. Consumers often do not realize how much retail prices rise because of government restrictions, but even with this knowledge, the difference would not be enough to get them to rise up and force change. Most pressures come from those that are unemployed as they have the most time and incentive to protest publicly. Possible costs of import restrictions include higher prices and higher taxes. Such costs should be compared to those of unemployment: it has been shown that import restrictions are not a good way of dealing with unemployment.
