Reason for protectionism

Sunday, January 10, 2016

1

1.Protection of a young industry

New and small firms, known as infant industries, will be unable to benefit from the economies of scale enjoyed by larger foreign competitors.

2. To prevent unemployment

 

Unemployment

Unemployment

 

Yet Although specialization and trade can banefit a country as a whole, it can still cause hardship for some.

3. To prevent dumping

Dumping Occurs when one country floods the market in another country with a product at a price far less then it costs to produce in order to force rival firms in that country out of business.

4. Because other countries use barriers to trade

Before any country removes barriers to trade on foreign goods it needs to be sure that foreign countries will remove barriers to trade on their goods.

5. To Prevent over – specialization

Free trade encourages countries to specialize in the goods in which they have a comparative advantage.

 

Sumber :

  1. Google Pict. Unemployment (Accsess on January 1,2016)
  2. Moynihan. D & Brian Titey. (2015). Economics, A Complete Course for IGCSE and O Level: University of Cambridge International Examination.

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Dan Moynihan & Brian Titey. (2015). Economics; A Complete Course for IGCSE and O Level. 2015. hlm 410

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