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Chapter 21: Q. 31 (page 522)

What is the national interest argument for protectionism with regard to certain products?

Short Answer

Expert verified

Products of national interest must have lesser reliance on imports.

Step by step solution

01

Step1. Introduction

With the increased globalization, protectionist policies are necessary. Protectionism essentially means the reduction in the volume of foreign trade and putting a cap and check on it.

02

Step2. Explanation

National interest arguments with respect to certain products states that for products like defense equipment, oil, technology, a country must not be too dependent on other countries. It is so because the trading country can comprise in terms of quality, pricing, etc and then the dependent country shall suffer.

It is hence important to let the domestic industry develop through protectionist policies. This is the argument put forward under national interest argument for protectionism.

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Most popular questions from this chapter

Explain how a tariff reduction causes an increase in the equilibrium quantity of imports and a decrease in the equilibrium price. Hint: Consider the Work It Out "Effects of Trade Barriers."

Explain how trade barriers save jobs in protected industries, but only by costing jobs in other industries.

Is international trade likely to have roughly the

same effect on the number of jobs in each individual

industry?

Why might the unsafe consumer products argument be a more effective strategy (from the perspective of the importing country) than using tariffs or quotas to restrict imports?

What are some examples of innovative products

that have disrupted their industries for the better?
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