Trading of commodities and services across international borders arises out of necessity .This is due to such as reason as countries producing differentiated products and services. Natural resources can be available in some countries and lack in others thus the raw materials required by the various industries may be only available in different countries (Grunzel 17). The means of production also differs among different nations therefore in some countries products and services are better and cheaper than others. Countries trade across border in order to create more foreign exchange. Cross border trading is also conducted in order to increase their market size. It may also be a source of unavailable technology therefore nations trade with other countries to acquire technology and locally unavailable skills. Cross border trading therefore besides being necessary can result in domestic commodities and services competing with international products and services locally.
To shield local producers against the kind of competition countries impose to other competing nations different protectionist policies .These policies are imposed in order to give locally produced products and services a competitive advantages over other international products and services. Protection policies can therefore be described as all government policies that are geared towards restricting or regulating international trade. They are imposed to ensure that the domestic goods and services are shielded or protected from competing importations. Protection policies range from quotas, tariffs to other trade barriers that regulate the entry of goods and services from international trade. Establishing trade barriers is therefore done in order to protect domestic producers.Want an expert to write a paper for you Talk to an operator now
Import quotas is one of the method that can be used to regulate international trade .import quotas are used to set the levels of goods and services that can be imported from a given nation. These quotas are set the maximum products that can be imported into a country in a given time period. The other method is the used of import substitution this is done by the government subsidizing domestic producers in order to make their products and services cheaper that the imported ones and therefore making the imports more expensive that the domestic products and services. Tariffs are taxes that are imposed on imported products and services. By imposing tariffs a government can protect its domestic producers since tariffs are generally used to make imports more expensive than the domestic products and services.
Administrative barriers these are regulations that are set by the government with the aim restricting certain products and services from entering the domestic markets .These regulations includes such regulations as environmental standards. By setting environmental standards that imported products are supposed to meet before being allowed into the domestic market. The restrictions are set in such a way that the importers are locked out on technicalities and therefore imports are regulated. Food safety regulations also like the environmental standards regulations are designed to restrict food imports and therefore shield domestic producers. Therefore importers who products do not meet the set regulations are locked out of the domestic market shielding the local producers.
Anti-dumping-laws are also usually set with the aim of restricting importations .these are laws that are passed in order to ensure that cheaper produced products are not allowed into the domestic market. The laws are used to protect the domestic industries. Intellectual property rights can also be used as trade barriers .this is where a government uses the Intellectual property rights to restrict importation of certain products that would compete with those in the domestic market such as movies.
Most of the protectionist policies however generally deny local consumers cheaper products .However one can argue that by protecting domestic producers, the governments ensure that there are no job losses in the domestic market as a result of domestic producers closing their industries .Trade barriers can therefore be used to raise the living standards of a nations population. In that by ensuring that they are employed citizens can therefore afford most of their need through the wages that they receive from their employers (Starbird, DeBoer & Pettit 21). However there is no denying that the trade barriers result in the domestic consumers paying more for products and services that they can get cheaply if the barriers are removed. The barriers therefore can be said to encourage inefficient productions.
Trade barriers are also always reciprocated by the restricted countries. They can therefore produce the opposite of what they are meant to accrue to a country. In that if a nation was to introduce barriers to a country that provides them with most of their raw materials then if such a country were to reciprocate then raw materials o the domestic industries would certainly rise and therefore the cost of the products can only increase .if such increases were to rise to levels that would force the domestic industry to close then the effect of the trade barriers can be said to have been the opposite of their intentions (Trebilcock & Howse 16). Therefore the protectionist policies meant to shield the domestic producer end up hurting them. In such a case we can therefore argue that protectionist policies are not always productive (Carbaugh 9). Trade barriers are also seen to anti globalization in that they introduce barriers in international trade and therefore restrict free trade which is one of the driving forces of globalization.
Protectionist policies are used in order to give locally produced products and services competitive advantages over other international products and services. However protection policies are not always effective since they can be reciprocated they can therefore end up hurting the domestic producers that there are designed to protect (MacLean 47).