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PROTECTIONISM - Coggle Diagram
PROTECTIONISM
ADVANTAGES
local firms are protected from foreign competition
it creates employment for the country
reducing imports improves the balance of trade
it protects against dumping
it defends key industries important to the country
The government gives aid to new industries to be competitive with others
DISADVANTAGES
increased trade opens new markets for businesses to sell their products
foreign governments may retaliate
it protects inefficent domestic industries from competition
:companies are not stimulated to be innovative and improve their products or services
consumers have less choice and pay more for products and that may be inferior
it creates high unemployment among workers who owe their job to exports
Some
protectionist measures
are:
economic aid to domestic industries=
SUBSIDIES
restrictions on particular imports/exports=
EMBARGOES
a tariff on foreign imports which are priced below fair market value=
ANTI-DUMPING DUTIES
taxes on imported goods=
TARIFFS
official limits on amount of imports=
QUOTAS
is an
economic policy
by
taxing
or
restricting
against overseas competition
that aims to
protect the economic activities
of a country
Dumping
is the export of goods at much lower prices than those charged on the domestic market
Restriction
based on health and safety regulations, are aimed at
protecting consumers
from dangerous goods