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How Protectionism has been used as a major economic tool by both developed and developing countries.
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| Submitted: Sat Apr 03 2004
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This Nine-Page Graduate paper discusses how Protectionism has been used as a major economic tool by both developed and developing countries. The paper highlights the usual forms of protectionism employed and the consequent influence on the domestic manufacturing sector. Protectionism. Protectionism is defined as the policy of protecting domestic industries from foreign competition by means of various barriers to trade, these include tariffs, quotas, subsidies, Voluntary Export Restrictions, stringent quality requirements and boycott or sanctions. We will look at each of these later in the paper. Economic theory strongly disapproves of protectionism; the central argument in favour of free trade devoid of restrictions is the Theory of Comparative Advantage. This proposes that each country should produce that good which its particular combination of factors of production are most suited to, for example a country with surplus labour and shortage of capital should produce labour intensive goods and similarly a country with a surplus...
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