Is Protectionism Ever Preferable to Free Trade?

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Introduction  Protectionism refers to the act of imposing economic policies aimed at restricting trade between countries, designed primarily to protect domestic producers and workers from foreign competition  Since trade generally leads to a higher standard of living, following the arguments from part (a), protectionism can be seen as contravening the arguments from the earlier part  The essay thus aims to discuss the arguments for and against protectionism before justifying whether there could be instances where protectionism is indeed justifiable. Thesis: arguments for protectionism  Infant-industry o In standard trade theory, factor endowments are assumed to be given but in reality, the quantity and quality of factors can be acquired over time. Hence a country can actually develop a comparative advantage in producing a good o An infant industry refers to a promising new industry that has potential comparative advantage if it were given the time and room to develop o By protecting such industries from foreign competition, this gives time for the industry to mature and eventually become internationally competitive  Unfair competition o Dumping occurs when imports are sold below costs as foreign firms aim to drive out domestic firms to gain market power. Anti-dumping duties raise the prices of such imports, hence enabling local producers to compete more easily. o Another argument is that firms in developing countries keep costs down by paying their workers depressed wages and by subjecting them to inhumane work environments. Hence limiting the imports of such goods discourages such exploitation.  Employment protection o Engagement in international trade often results in structural unemployment as workers in the contracting sectors may lack the skills to transit to the expanding sectors o Temporary protectionist measures allow such

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