Question

Arguments in Favor of Trade Restrictions (Barriers)

Read the news article packet about different arguments in favor of trade restrictions (barriers) and pp. 139-145 in the Carbaugh 16th ed. textbook.

1. What is meant by the term, "infant industry"?

2. Based on the news articles/political cartoons and the textbook, list examples of specific countries and industries considered to be an "infant industry" in a particular country.

3. Based on the news articles/political cartoons and the textbook, list examples of situations which have generated discussion of the need/desire to protect worker wages and/or jobs.

4. What is meant by the phrase, "level playing field" in the context of international trade?

5. Based on the news articles/political cartoons and the textbook, list examples of specific countries and industries concerned about an unlevel playing field in the context of international trade.

6. Why did the U.S. impose a trade embargo against Cuba? How does the data posted by the U.S. Census Bureau corroborate that there was an effective trade embargo? How does the EU apparently view Cuba now?

7. Why have trade sanctions been imposed on North Korea and Iran?

8. Pick one of the political cartoons. Knowing you're taking this course, pretend your mom asks you to explain it to her. Briefly discuss.

Answer 1

1. Infant industry refers to those industries that are new to the market and are in the early stages of experience and work and are absolutely incapable of competing with established industry competitors located abroad.

2. India- Steel, Chemical, electrical machinary and general engineering were considered to be infant industries when they first came up.

Malayasia's Proton cars or in general the Malaysian automobile indusry was a infant industry.

Mnay of the African countries still continue the infant industry tag with major industries in mining an cotton spinning.

In Brazil, computer production industry was considered an infant inustry with the Brazilian government enforcing strict controls on the import of these goods.

3. In USA, the increasing outsourcing of work to the Asian countries in search of cheaper and skilled labour has raised the concerns in USA over the fall in the employment rates. With the migration of educated workers to USA, the major American companies are also hiring the outsiders over the original habitants rising a demand for protecting the workers jobs in USA.

With Brexit, the british national employed in other European countries have raised a cry to protect their jobs following the deal between England and the EU. This will also take away the chance of people to cross border in EU in search of work.

4. A level playing field in the global trade means that all the countries and their firms that compete with each other in the global level, should be able to offer their customers in various parts of the world, the widest chocies and the best value of money. It basically means that the countries shoul get done with the tariffs and other regulations of trade of commodities.

5. Countries and industries that are concerned about the unlevel playing field.

1. China - On almost all the goods that it exports to USA are subjected to high tariffs.

2. India- on pharmaceutical industry.

3. USA- tariff on Harley Davidson bikes in India.

4. India- High tariff on products from China especially toys.

6. USA imposed a trade embargo on Cuba because of the proximity of Castro regime to the Soviet Union with whom US was on a cold war. EU has been committed to help Cuba to develop its economy even though USA has hiked its sanctions on the island. EU has recognised the importance of the Cuban medical system and has called in them to provide a helping hand during the corona outbreak.

7. Sanctions were imposed against Iran on the suspicion that they had nuclear bombs and it was imposed to force iran to suspend the enrichment related activites regarding the nuclear power. USA wanted Iran to cooperate with IAEA. The sanctions were aimed at banning the supply of nuclear related marterial to Iran, which USA thought would be used against it and the sanctions also froze the assets of individuals who were thought to be related to the nuclear program.

USA has imposed sanctions on North Korea for also developing weapon systems mainly nuclear powers that could pose risk to the world and mainly USA and its ally South Korea. Also, North korea and USA never had a good relation ever since the Korea war and North Korea is the greatest ally of China which USA considers a threat in the future.