4.3.1.4 PROTECTIONISM

What is protectionism.

Protectionism is when a country takes action to protect its own industries by restricting trade with other countries.

Why do countries employ protectionism?

• Protect Infant industries

• Dumping (when developed countries js dump excess products into undeveloped nations, threatening domestic producers)

• Domestic employment

• Externalities (blocking drugs/weapons, alcohol in Qatar’s case)

• Balance of payments (can reduce BOPOCA deficit)

Protectionist Measures

• Tariffs (+: domestic goods protected, -: higher price for consumers)

• Import Quotas

• Legislation

• Domestic subsidies

• Embargoes

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