As a consumer , describe your benefits regarding the availability of a wide rang

Question

As a consumer, describe your benefits regarding the availability of a wide range of low-cost, high-quality goods and services which are produced in other countries, such as, cell phones and flat-screen televisions.

As a voter, describe your concerns regarding international trade, such as the politics of free trade versus protection. Do you think tariffs or quotas should be imposed on imported goods to provide U.S. producers an “even playing field”? Before you advocate for tariffs and quotas think how other countries will retaliate.

Finally, as an employee, describe your concerns regarding the loss of U.S. jobs, since international trade spurs job offshoring, and it also provides freer access to U.S. markets by foreign producers.

Explanation / Answer

As a consumer -

Benefits would be as follows -

1. First benefit would be the wider choice that would be available to us.

2. Low-cost availability wil enable us to purchase more and thus increase our consumption of goods which is sign of our rising standard of living.

3. Availability of high-quality goods at low cost wil increase our quantity demanded and thereby brings an increase in our consumer surplus. Increase in consumer surplus reflects the rise in well-being. So, cheap and quality imports will increase our well-being.

As a voter -

Concerns are as follows -

1. First concern would be the displacement of domestically produced goods and services from the market due to availability of cheap and quality imports.

2. Second concern would be the dumping as resorted by countries from which goods are being imported. Such tactics will drive away the domestic firm from their own home market. This will make our industrial sector weak and severly impact the growth prospects of our country.

3. Even though free trade had adverse impact on domestic economy, protectionist policies in terms of tariff and quota will hardly be the cure. This is because other countries will reataliate and this will negatively impact the exports of our country. This is also not good for domestic industry. So, government should devise ways that cost of imports can be raised automatically and domestic goods can be made competitive against them. This can be done by incorporating environmental cost in production. Many countries are able to produce at low-cost due to their balant disregard for environment. If environmental cost & living wage are incorporated in their production process, their cost will rise substantially. This will provide level playing field to domestic producers.

As an Employee -

Concerns are as follows -

1. Due to free trade, if foriegn firms on basis of their low-cost, good quality product become successful in captuirng the domestic market then in that case domestic firms will lose market and thus will curtail their production. As foriegn firms does not undertake domestic production and mostly imports, there would be job losses due to curtailed production by domestic firms. In such case, itis the employees like us who have to bear the brunt in terms of wage cuts or job losses. This will significantly lower our standard of living making it difficult for us to make ends meet.

2. Job-offshoring is also an cause of concern. This has accelerated with the rising international trade. Job-offshoring directly impact the domestic workforce who have to contend with reduced job opportunities, pressures to take wage cuts, job losses etc. This severly impacts living standard of domestic workers.

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