In addition, the US government also put a 100% import tariff on various European goods, ranging from cashmere sweaters to electric tea and coffee makers (Lightner, OMara, n/d). After many twists and turns, the December 2009 agreement required the EU to reduce its tariffs on imported bananas from 176 euros ($224; 140) per tonne to 114 euros per tonne within eight years. (BBC, 2012)
The banana wars are known to be one of the bright examples of trade protectionism. Fouda (2012) defines protectionism as an economic policy of restraining trade between nations, through such methods as tariffs on imported goods, restrictive quotas, and a variety of other restrictive government regulations designed to discourage imports and prevent foreign take-over of local markets and companies.
Fouda (2012) states that free trade opposes such government-imposed restrictions as in the above example of banana wars. However, supporters of the trade protectionism underline that such policies protect home or also known as infant industries.
Would you agree that advantages such as protecting domestic markets and producers outweigh the disadvantages of trade protectionism?
Please support and justify your answer.
You should consider the question from the following perspectives:
Comparative and competitive advantage
International institutions and world trade
Barriers to trade and protectionist policies
By the end of the discussion, you should:
Understand the concept of free trade and how this manifests itself in the world today
Appreciate the influence that international institutions have on international business
Understand the practical limitations of classical trade theories
The learning outcomes for this discussion are:
Critically evaluate the motives for, and barriers to, internationalisation.
Demonstrate understanding of current levels and trends of global trade and business.
Guidelines for discussion responses:
Your initial posting must respond to the question above in full and be at least 200 – 300 words long
Currently 1 writers are viewing this order