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Protecting Domestic Industries from Foreign Competition
Discuss whether or not a government should protect its country’s industries from foreign competition.
International Trade and Exchange Rates
1. Understand the question and the structure of the essay: Before starting to write, make sure you understand the question and the structure of the essay. The essay should have an introduction, body, and conclusion. The body should be divided into sections that discuss the reasons for and against protecting industries from foreign competition, and an analysis of the impact of such protection.
2. Use evidence to support your arguments: When discussing the reasons for and against protecting industries from foreign competition, use evidence to support your arguments. For example, when discussing the positive impact of protecting infant industries, provide examples of countries that have successfully protected their infant industries and the benefits they have reaped. Similarly, when discussing the negative impact of protecting industries, provide evidence of countries that have suffered as a result of protectionism.
3. Consider the long-term implications: When making recommendations in the conclusion, consider the long-term implications of protecting industries from foreign competition. While protectionism may provide short-term benefits, it may have negative long-term consequences. Therefore, it is important to weigh the costs and benefits carefully and make recommendations that promote the long-term health of the economy as a whole.
STEPS TO WRITE ESSAY 💡MAIN POINTS💡OVERVIEW
A. Definition of protecting industries from foreign competition
B. Importance of the topic
C. Thesis statement
II. Reasons for protecting industries from foreign competition
A. Infant industries
B. Declining industries
D. Reducing current account deficit
E. Encouraging economic growth and creating jobs
III. Reasons against protecting industries from foreign competition
A. Increased prices of imported products
B. Increased costs of production and inflation
C. Reduced competition for domestic firms
D. Possibility of retaliation from other countries
E. Opportunity cost
IV. Analysis of the impact of protecting industries from foreign competition
A. Positive impact
B. Negative impact
C. Comparison of the two impacts
A. Restate thesis statement
B. Summary of main points
C. Final thoughts and recommendations.
The question of whether or not a government should protect its country's industries from foreign competition is a contentious one, with arguments for and against.
On the one hand, it could be argued that protecting industries is necessary, especially if they are infant or declining industries. Infant industries may not be able to compete on price, especially if they have not had the chance to take advantage of economies of scale. By providing them with protection, the government can give them time to grow and become more efficient, which could benefit the economy in the long run.
➡️ Declining industries
Similarly, if industries are declining, protecting them could help to prevent widespread unemployment, as the workers in those industries may struggle to find jobs in other areas.
Additionally, if foreign producers are dumping products onto the market at below cost price, it may be necessary for the government to step in and protect domestic industries from being forced out of business.
➡️Reduce current account deficit
Furthermore, protecting industries may be seen as necessary to reduce a current account deficit, which occurs when imports exceed exports. Protecting domestic industries can encourage economic growth and create more jobs, which could help to increase exports and reduce the deficit.
On the other hand, protecting industries may have negative consequences.
For example, it could push up the price of imported products if tariffs are used, which could cause inflation and reduce consumers' purchasing power.
➡️ Reduced competition
Protecting domestic industries could also reduce competition, which could reduce efficiency, raise prices, and reduce quality. Moreover, other countries may retaliate, reducing exports and damaging international trade relations.
Additionally, protecting industries could come at an opportunity cost. Resources that are used to protect industries could be used for other purposes, such as supporting education, healthcare, and infrastructure. Finally, free trade could result in lower prices and greater variety for consumers, which could be a benefit to the economy as a whole.
In conclusion, whether or not a government should protect its country's industries from foreign competition is a complex issue, with valid arguments for both sides. Ultimately, the decision should be based on a careful analysis of the costs and benefits involved, with a view to promoting the long-term health of the economy as a whole.