Trade protectionism (Noneconomic rationales for government intervention ,…
Noneconomic rationales for government intervention
Preserving national culture
Maintaining or extending spheres of influence
Promoting acceptable practices abroad
Maintaining essential industries : Government often apply trade restrictions to protect them
Economic rationales for governmental intervention
Economic relationships with other countries
Restriction as a Bargaining tool
Comparable acces to foreign market that foreign companies have to theirs.
Balance of trade adjustments
Trade deficit creates issues for nations. So, gouvernments often uses 2 options than can affect positivly it competitive position broadly :
Depreciating or devaluing its currency
Relying on fiscal and monetary law in order to have lower prices than others countries
Developing an industrial base
Import Substitution and export-Led Development
Growth in Manufactured goods
Protecting "Infant industries"
Government have an interest to protect/develop strategic economies
Different stackholders :
Legislation (Free trade argreement ...)
What tools for trade control ?
Quantity controls : Quota (Most commun), "Buy local Legislation", Label & standards, Requirements, administrative delays, reciprocal requirements ...
Direct price influences : Subsidies for example have a big influence on the price.
Tariffs (Duty) : This is the most commun type of control, the goal is to affect the price in order to impact the quantity sold/purchassed
Case : Doing Business in Singapore
Some companies presents in Singapore : Siemens, Rolls-Royce, Procter and Gamble, Unilever ...
1st place to make business accordint to the world bank
Question : Should government impose trade sanctions ?
No : Lost of revenues for companies, sanctions are not really working (Vietnam example) ...
Yes : Because due to globalization actions in one country can spill over and affect people from others countries.
1st case : Vietnam/USA Catfish's production
Commun reaction : USA regulate the flow of fish by taxes.