Importance of Protectionism in Domestic Market

This report discusses the policies of protectionism and their importance in the domestic market. It highlights the impact of liberalization, technology, transportation, and information on international trade. The report explores the benefits and drawbacks of tariffs and non-tariff barriers and their impact on the economy. It also discusses the pros and cons of protectionism and its role in regulating product standards and enacting government policies.

Protectionism in Trade

Table of Contents
INTRODUCTION ..........................................................................................................................4
TASK...............................................................................................................................................4
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Protection is defined as the policies that applies by local industries against foreign
competition in the form of tariffs, imports and subsidies and there are other restrictions that
implemented on the imports in the country by foreign competitors. It is implemented by
government and organisations in the context of improving economic activity. These policies are
implemented by many countries to redress competition and to protect the localised economy.
Protectionism also promotes domestic trade and provide protection to the goods and services in
the market. It results in continuous growth in terms of promoting local goods in the market. By
restricting market actions it affects many industries but also benefits local industries(Gregori,
2021). he aim of this report is to highlight the importance of protectionism in the domestic
market.
TASK
Liberalization allows policies that make an economy open to do trade and investments in
the other parts of the world. Opening up the economies of countries to other global economies
enables countries to make competitive benefits in building many products. Liberalization freeing
trade regularly and that gives an advantage to the countries to grow in terms of international
trades. It eliminates trade barriers in merchandise and the main benefits of this would come in
the field of agricultural markets. Trade is always been shaped by the changing technology, rapid
development in the technology in the current times builds potential to transform international
trade. The most important impact that technology has made in the trade is that it reduces the
trade cost(Kerr, 2020). It composed the trades by enhancing the service component, fostering
trade of the good which are time sensitive products and reduces complexities with increment in
the length in global chain. It is concluding that expansion in the technology is likely to
considerate benefits to international cooperation which helps and ensures that digital trade grow
continuously for inclusive economic growth. Transport services and information plays an
important role in the growth of international trade. It provides connections within the economies

and connects domestic economy to the international economy (Liang and Liang, 2021).
Transportation connects the production sector which includes agriculture, agri-food and tourism
of the domestic economy with the international markets. Information strengthen the efficient
transportation with a motive to provide goods and services to the consumer in a cost effective
way with minimum time. Transportation builds a well known connection and facilitation of
national development in the context of international trade.
Imposing protectionism contains three main factors which are tariffs, import quotas and
non tariff barriers. These forms of protectionism improves economic activity with the safety and
quality . They are treated as the primary policy tools that a government can use in maintaining
protectionist policies. A tariff is a tax that is added to the cost bear by the customer on imported
goods,it is paid to the custom authority of the country who is imposing it. Tariff benefits
domestic sectors as it raising the relative prices of imported products. There is chances of
increased competition from imported goods which became barriers and threaten to domestic
industries. So by implementation of the tariff barriers can save localised markets and provide
them market to sale their products with low costs(Rahman, 2021). Tariff also provide
protectionism to the customer as there are such products that are endanger to the population.
Protection can be provided to the markets by implementing non-tariff barriers to trade such as
provide licenses to the organisations that allows them to import certain type of goods into the
country, by import quotas a government can restrict the amount of a goods that can be imported
in the domestic country, voluntary export restraints is a voluntary exporting that allows
businesses to export rather than importing, Increment in the local content requirement, it places
quota on the no. of goods that has to made domestically rather than put quotas on import. These
barriers provide many benefits as by applying them a government can generate revenue and in
the context of domestic markets it reduces the competition,since import prices are inflated. The
effects of tariff and non tariff barriers changes over the time as increment in the prices of the
imported goods helps domestic markets to expand but it also reduces the efficiency of the
domestic markets by providing them environment which is less competitive.
Protectionism is the most important practice which outlines all the trade policies and the
protectionist in it. This generally focus on allowing all the trade policy and the promotion of the
domestic producers to expands their serves and goods in international level. It is expanded by
the trade and the non-trade barriers and the ways in which the imposition of tariffs on the foreign

goods in effective market place is categorized. There are majorly the tariffs and the non-tariffs
barriers which is addressed. All the Tariff complies of the taxes and the general duties that are
increased and applied on the general imported goods in the home country or the domestic market
region. Other thebe this the non-tariffs barriers involves all the quotas, licenses and the general
standardization that avail and manage the limited supply. It fogy on managing there relative
pricing with which the relative imposition of goods and the imported products and their
relatively increase in the prices can be calculated (Rahmati, Ebrahimian and Madanizadeh,
2020). All such protectionism applies to all the specific are and restriction with which the benefit
of the international economy can be attained and the improvisation in the economic activity can
be applied. This helps in regulating the product standard and also the enacting policies for the
government with which the subsidies are being undertaken. All the neon tariff barriers are
mainly being applied in order to manage the imported goods to be supplied in the specified time
and also to maintain the marginal effect.
Protectionism generally helps in managing the control over the government intervention
some of the main area through which they help in maintaining the stability in the environment
ibn the global areas. So the main pros of the protectionism are like, National Security which
ensures nations protectionism and also the foreign manufacturing with the adequate implied
terms, protectionism also helps the consumers to advocate all the goods and the government
product and safety, it also helps all the infant industries to gain the maximum growth and
advancement by adverting the features and also the short term mechanism with which they
attempt to maintain the diversification of the economy. Through this the protection is also being
gained in delivering any kind of harmful products and services their provided that they keep
regular access and control on the working and also accumulate to manage the fair trade practices
with in the global region. It helps in accumulating the effective weapon through which all the
nationwide policies are being opted and this regulates to manage the growth and the adherence
(Selen, 2020). this enhance the self-sufficiency and also incorporates the protection of the
infant’s industry and the methods to rely on the contribution for the supply chain resilience and
also the accumulating the harmful products and regions. So the protectionism somehow manages
the accelerated growth and also tries to remove all the unfair trade activities that can eventually
gain the image of the company and also make the other global expansion to be weakened. This
helps to contribute for success and growth,

CONCLUSION
It is concluded from the above report that protectionism are the policies that are applied
by the government to protect the local market form the foreign market. And to boost
international trade liberalization, technology, transportation and information plays very
important role as they provide exposure to the markets to grow. It also helps in providing goods
and services in reliable cost. Protectionism can be provided on two basis tariffs and non-tariffs. It
also helps in raising government revenue, balance payments, protect new industries and many
more. Protectionism provides economic growth in the country but it have some negative effects
also it increases production cost , reduces efficiencies of the companies.

REFERENCES
Books and Journals
Gregori, T., 2021. Protectionism and international trade: A long-run view. International
Economics, 165, pp.1-13.
Kerr, W.A., 2020. The COVID‐19 pandemic and agriculture: Short‐and long‐run implications
for international trade relations. Canadian Journal of Agricultural Economics/Revue
canadienne d'agroeconomie, 68(2), pp.225-229.
Liang, K.S. and Liang, C.I.H., 2019. Trade, Technology Transfers, and Risks of Protectionism:
The Experience of the Republic of China. In The Emerging Pacific Community (pp.
145-159). Routledge.
Rahman, M.M., 2021. The dynamic nexus of energy consumption, international trade and
economic growth in BRICS and ASEAN countries: A panel causality test. Energy, 229,
p.120679.
Rahmati, M.H., Ebrahimian, M. and Madanizadeh, S.A., 2021. Dynamic effects of trade barriers
with speculation on foreign currency: The case of Iran. International Economics, 167,
pp.151-173.
Selen, U., 2020. Why do countries use temporary trade barriers?. Applied Economics
Letters, 27(6), pp.437-440.