What is protectionism?

Protectionism is an economic policy to benefit from domestic manufacturers of goods and services. In a nation with protectionist policies, domestic manufacturers are isolated from competition against foreign companies by a number of obstacles into import. It can also be supported by the government directly by subsidies. The opposite of protectionism is free trade in which the goods are freely allowed to cross the boundaries. Many nations support free trade and would rather see that protectionistic economic policies have completely banned. For example, the signatories of the General Agreement on Tarifts and Trade (GATT) and members of the World Trade Organization (WTO) are usually proponents of free trade. By placing hard imports and quotas, the government can theoretically increase the domestic goods market by basically closing the market for foreign manufacturers. This is again designed to benefit the domestic economy.

If import limits are accompanied by government dotaCemi for domestic companies and government subsidies for exports to promote domestic products, protectionism aims to benefit domestic companies. But this is not always. Thanks to the lack of competition, companies may be less interested in developing innovative new products and stick to old inventions and technologies. They can also face export barriers because foreign countries often respond to protectionism through their own protectionist policies.

Individual citizens may also suffer under protectionism, as they can find that the prices of aslužby goods are inflated. Without low -cost foreign competition, companies can afford to charge what they like for their goods and services, and this means that consumers can pay prices that are much higher than prices paid by people in other regions of the world. They can also cause lack of innovation or lobby for greater freedom to choose between products.

supporters of protectionism claim that it can help emerging industry by being an isolateIt is from the open market until they are strong enough to function separately. Protectionism also theoretically protects homework by encouraging companies to hire it on the domestic market, and can be used to support life wages and better benefits for employees. Proponents point out that protectionism can also be used to pressure on foreign nations to improve the conditions for their workers.