Topic Category Business
Protectionism refers to the economic policy of prohibiting trade between countries through effecting high tariffs on imported goods, restraining quotas and government rules on foreign imports and foreign possession of domestic properties, as well as anti dumping laws intended to protect domestic industry from foreign competition.
Globalization process refers to the worldwide incorporation of economic, cultural, political as well as religious and social arrangements. There are other definitions with the IMF referring it as the growing economic interdependence of nations globally through improving quantity and range of inter-country trade, free international capital flows and extensive widespread of technological knowledge.
The United States economic policy over the past years has shifted the direction towards protectionism in a number of industries. The shift partly blamed on the various factors like war on terror and special interest groups as well as the public failure to realize the benefits of the free trade, but only focus on the harmful effects of industries relocation or closure as a result of foreign competition. Though many people favor globalizations and investment liberalizations, however they insist on compensation through established government programs when they incur losses due to industry relocation or closure. In spite of these findings, the existing government programs are ineffective and non-beneficial to workers. Hence, there is need for the government to initiate programs that are more effective.
Topic Category Business
Despite the benefits of the free trade being known to many Americans, the protectionism is further being effected. However, there is need to encourage free trade across the borders, to avoid the harmful effects of the protectionism policies. This include economic in equality as it benefits a few privileged people, decreased earnings due to few market opportunities and a slower economy resulting from lack of foreign exchange. Similarly, there is close link between loss making industries and workers in that industry who tend to support protectionism, as they fear the stiff competition arising from free trade.
In addition, many nations are currently inclined towards devastating climate changes causing environmental rules and regulations being implemented. This makes environmentalism as a protectionism policy as industries perceived to cause climate deterioration will be affected.
These include Kyoto protocol and global warming issues seem the main arguments for protecting certain industries while discriminating others. For instance, industries are required to refine their wastes before dumping them, these tend to increase the production cost and minimize earnings. Though, non tariff barriers to trade tend to avoid free trade regulations such as those of European Union (EU), World trade organization (WTO) etc. that restrict imposition of tariffs such as anti dumping regulations and counterfeit goods measures, but among the member countries, hence non member countries are excluded.
Economic theories argue that tariffs are unnecessary disruption of consumers’ sovereignty and the rule of free market. They argue that it is unjust to the consumers and generally unfavorable for a nation to protect a non-performing industry, it is healthier to let it collapse and give way a new efficient one to grow in its position. However, with increased globalization many nations rely on cultural nationalism to manipulate public policy in favor of protectionism rather than relying on sound economic persuasion. For instance, many Americans are made to accept commodities from their produced locally, while shunning foreign goods. This arises because many believe their culture is the best, similarly, these tend to affect the formulation of economic policies to suit their culture rather than their needs.
In spite of many people, believe that the world is increasingly becoming globalized, and turning to one borderless nation where issues are incorporated. However, many industries face protectionist legislation in their endeavors to expand to the outside world. Hence, the world is not significantly globalized, as each nation tries to obtain a balanced budget and a significant economic growth.
Topic Category Business
Satterlee, B. (2006), Essentials of International Business: Core principles, Concepts, and Strategies, Synergistics Publishing, Roanoke.
Scheve, K., & Slaughter, M (2007) A New Deal for Globalization, Foreign Affairs, Retrieved November 8, 2007, from Business Source Premier Database. http://search.ebscohost.com.ezp roxy.liberty.edu:2048/login.aspx?direct=true&db=buh&AN=25610509&site=eho st-live
Summer (2007), Will Environmentalism Become the New Protectionism? International Economy, Retrieved November 8, 2007, from Business Source Premier Database. http://searc h.ebscohost.com.ezproxy.liberty.edu:2048/login.aspx?direct=true&db=buh&AN=262 96752&site=ehost-live
Jones, E. (2007), cultural nationalism: the last resort of scoundrels; Policy, Retrieved November 8, 2007, from Business Source Premier Database. http://search.ebscohost.com.ezproxy.libert y.edu:2048/login.aspx?direct=true&db=buh&AN=25818236&site=ehost-live
Ghemawat, P. (2007), why the world is not flat: Foreign Policy, Retrieved November 8, 2007, from Business Source Premier Database. http://search.ebscohost.com.ezproxy.liberty.edu:20 48/login.aspx?direct=true&db=buh&AN=24176631&site=ehost-live
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