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Sun 27 Nov, 2005 09:14 pm
i am confused about protectionism. the question is do you think developing countries have a greater preference for protectionism than developed countries, and if so, why? i got news that US poised to ratchet up textile protectionism. and now i want to know protectionism that is to protect developed countries or developing countries, or that is balance between hedger.
It depends entirely on the industry and the country.
Protectionism is a method of warping the market by artificially rising prices to make a home produced product or service cheaper than an imported one.
There are situations where where developing and developed nations would apply it (for political expedience, geopolitical strategic advantage, nationalism or national security, to name a few). I don't think one or the other has a greater preference overall.
It's a double edged sword, artificially rising prices raises the cost of living, in effect it's a tax used to subsidise a 'less efficient' industry.
I think their justified as a transition measure while a workforce is eased out of one industry into others (assuming there are others that you have a competitive advantage in). I'm into compassionate capitalism.
Prodectionism is just another "Ism" that Americans have applied to countries that are looking out for their own economic self interest. The term is usually applied to the developing countries when the condition is bad for the US. It can be argued that the US is the worlds largest protectionist.
I think there are a few nations/blocs that qualify for the title protectionist. Without wanting to ignite the debate it seems to me that yes, the US can wear it but so can the EU. That's one that comes readily to mind. Japan I believe protects its farmers with high import duties on certain items in the same way as the EU. And I think it's accurate to suggest that China indulges in a form of protectionism in not floating the Yuan, although they may be ready to change that policy.
Government subsidies are protectionism as well
Source:
http://news.bbc.co.uk/1/hi/business/3102266.stm
FARM SUBSIDY PER COW/year
EU: $803
USA: $1,057
JAPAN: $2,555
But I'm still not dismissive of protectionism wholesale, it has it's place. I can't help wondering how much Amazon rainforest we would have left if brazillian beef could compete in the above markets...
i appreciate your help. thanks again.