Within the past year we have seen a great battle between Globalization and Domes

Question

Within the past year we have seen a great battle between Globalization and Domestic Protectionism throughout the world. The United Kingdom, the United States, Austria, Greece, Poland and Italy have moved to elect candidates and systems that promote the establishment of barriers to trade, immigration and capital via weakening trade systems and proposing new tariffs and using the tax code to protect the domestic economy. What problems can this cause within the US, Austrian, UK, Polish, Greek and Italian economies? Who can benefit from this process? Who may get hurt from this process? Should we have protectionism? What should the tools be in overcoming protectionism? What can be done in overcoming the problems associated with workers losing their jobs due to outsourcing?

Explanation / Answer

Promotion of protectionism in the economies of the United Knigdom, the United States, Austria, Greece, Poland and Italy can lead to fall in international trade of the economy which can reduce the growth rate of Gross Domestic Product of the nation.Thus, overall growth rate of the economy can fall when protectionism is promoted in the economy. The gainers from this policy will be domestic producers who will increase their sales and market size as competition from foreign firm's imported goods falls. The domestic consumers will get hurt from this process as price of the product rises and consumer surplus falls as competition in the economy falls.

Protectionsim should be only used initially to protect domestic producers in the short run for a specified period, and after this time period, protectionism should not be used as in the long run protectionsim leads to inefficiency in the production process of the firms. To overcome protectionsim , the domestic firms should be made more efficient by investing in technological development of the firms. To overcome the problems associated with workers losing their jobs due to outsourcing, the companies can fix the specified quota of jobs which will be given to the workers of the country to which the country belongs and rest of the jobs will be given to host country's workers. This can fix the problem of unemployment due to out sourcing.

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.