Question

Economics

Give five detailed reasons for European return to protectionism.

Answer 1

Anti -Globalisation movement is gaining currency in developed countries. Globalisation has led to the jobless growth and few countries are gaining at expense of others. Hence, now European countries are moving towards the protectionism. Following reasons:

• Protection employments:  Employments are being killed in developed countries due to excessive import of cheaper goods and inflow of cheaper labor. Hence, it is popular demand to create new employment opportunities in countries. Thus, there countries are adopting protectionist policies.
• Infant industry argument: European countries also extending arguments of infant industries where their few firms at infancy would not be able to compete against the firms from elsewhere.
• Correcting Balance of payments: These countries are facing rise in trade deficit. Import is larger than export. Thus, it is becoming problem for these countries.
• Generating revenue: Debt is also rising in European countries, it can be solved with imposing tariffs on import so that enough revenue can be generated.
• Global Trend: going against globalisation is becoming trend in many developed countries. US is foremost example of it. Thus other countries are also following same. US has waged trade war against the China.