An analysis of the impact of protectionism on domestic and global economies

In recent years, protectionism has manifested itself through popular anti-globalisation and anti-immigration movements in certain sections of the world. In conclusion, it is my hope that the protectionism policy that is being proposed is going to be a temporary measure to give local manufacturing industry some breathing space and sigh of relief.

Increasing production, which can now be sold to more people, thereby maximising profits.

Analysis Impact of Protectionism on Domestic and Global Economies

In the long run protectionism is counter balancing to the spirit of free trade, comparative advantage, economic growth and globalisation.

In such a situation, protectionist policies are implemented and duties are imposed on dumped goods to prevent the short-term dislocation.

The Impact of protectionism on economic growth

It is when that level of import substitution has been reached that protectionism can achieve the intended purpose. To fill that gap, there would always be an influx of cheap imports until a certain level of import substitution has been reached in the domestic market and economy.

The Act is meant to address factors that are making the economy uncompetitive by coming up with the National Competitive Act which will work as a guideline for the National Competitiveness Commission NCC which will be set up to spearhead improvement of doing business and support local manufacturers and ensure that smooth flow of doing business in Zimbabwe.

The intended purpose of increased domestic competitiveness as a result of the effect of tariffs that make domestic products more price competitive is relative to the foreign products in the home market.

Trade protectionism

Read more Trade protectionism Trade protection is the deliberate attempt to limit imports or promote exports by putting up barriers to trade.

Therefore even if protection does exist, global economies will still gain access to a wider variety of commodities imported from other countries in the long term as well as technology, thereby raising competition between products, and potentially increasing living standards in the future. The policy of protectionism contrasts with the policy of free trade, where Governments reduce as much as possible the barriers to trade within and across nations.

Protectionist policies also aim to prevent dumping which refers to selling a product in a foreign market at a price below its cost of production. If the policy was successful, the rise in domestic incomes should encourage more imports of complementary and subsequently competitive goods.

Domestic economies maintain employment, but at the cost of redirecting resources away from more efficient industries. Overseas and take further advantage of economies of scale ie. They believe that without this protection, infant industries will die before they reach a size and age where economies of scale, industrial infrastructure, and skill in manufacturing have progressed sufficiently to allow the industry to compete in the global market.

Analysis Impact of Protectionism on Domestic and Global Economies

This is evident when, in some cases the protection becomes permanent and is seen in the domestic Textiles and Footwear industries. The tax cut however has the implication of resulting in a loss of revenue for the domestic government, but will result in an injection that will show up in the current account in the Balance of Payments.

The Act is meant to address factors that are making the economy uncompetitive by coming up with the National Competitive Act which will work as a guideline for the National Competitiveness Commission NCC which will be set up to spearhead improvement of doing business and support local manufacturers and ensure that smooth flow of doing business in Zimbabwe.

This may result in some overseas industries closing down, or other governments retaliating with their own form of protectionist policy. Otherwise if we really want to see our economy growing, we should be freeing our local market more to potential outside investors as well.

However if these industries do grow up, and protection is successfully removed, those industries are able to provide more goods and services in an increasingly competitive environment meaning those firms will be forced to reduce prices and adopt more efficient work practices.

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Increasing production, which can now be sold to more people, thereby maximising profits. The question is, does our local manufacturing industry have that capacity at the moment to stomach the inevitable.

The infant industry argument outlines the need for protection in order to establish industries that can form a comparative advantage in the future, if sheltered from competition for a little while. This is because more foreign firms that are more competitive will lose business due to local firms being protected and more able to reduce their prices.

The Impact of protectionism on economic growth

As a result, domestic production would be expected to be at levels that would be able to meet the domestic consumption demand, of which I believe we are still way off.

In the long run protectionism is counter balancing to the spirit of free trade, comparative advantage, economic growth and globalisation.

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the impact of protectionist policies on the domestic and global economies. The benefits of globalisation, the increased integration of domestic economies into one global economy, cannot be fully materialised if protectionist policies are implemented.

Analysis Impact of Protectionism on Domestic and Global Economies Essay add:/ Views: Analyze the impact of protectionist policies on the domestic and global economies.

Since then, global capital flows fell from $11 trillion in to a third of that figure in While some of that may be cyclical in nature, many countries implemented tariffs and other forms of protectionism designed to contain risk in their financial systems and make crises less damaging, although this comes at the cost of forgoing the benefits we’ve seen.

An analysis of the impact of protectionism on domestic and global economies
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