Economic Growth and Public Policy of the Uk: Does the Protectionism Help?
Economic Growth and Public Policy of the UK: Does the protectionism help?
Introduction The effects of globalization have touched all the aspects of life and business today. One aspect is the trading policies between countries. Since the late nineteenth century, the collision started between domestic and foreign industries, which ask governments for measures that could protect local industries, without discouraging the country’s trade relations. The term ‘Protectionism’ was thus introduced in the language of global trade and economy (Rowley, 2002). Protectionism is an economic policy applied in the trading system, to restrict the quantity of imported items, and to flourish country’s exports. The objective of this is policy is to maintain the competition between foreign and the domestic industries. In most of the countries, free trade is not followed and various tariffs and duty charges are applied on the import goods. These taxes allow the government to generate a fair bit of revenue, without utilizing their resources. Moreover, it also helps in the sustainability of the domestic industries. The prices of the imported goods are kept higher by adding these taxes so that the local customers, looking for cheaper options, have to buy the domestic items. In parallel to this, the protectionism policy allows domestic industries to raise the prices of their products, without raising the quality of their products (Ethier & Fischer, 1987, pp.1-2). Another aspect of protectionism is the allegation of quota in the trading system. Many countries use quota in trade, as an exchange of goods policy. This enforces countries to import some items from the same country, where they wish to export their goods. For an example, countries rich in technology, often lack in hand made and items, which involves more labor work than machinery. Therefore, they import such handmade items like, rugs and handicrafts, in exchange of their hi-tech technology. With this policy,
Introduction The effects of globalization have touched all the aspects of life and business today. One aspect is the trading policies between countries. Since the late nineteenth century, the collision started between domestic and foreign industries, which ask governments for measures that could protect local industries, without discouraging the country’s trade relations. The term ‘Protectionism’ was thus introduced in the language of global trade and economy (Rowley, 2002). Protectionism is an economic policy applied in the trading system, to restrict the quantity of imported items, and to flourish country’s exports. The objective of this is policy is to maintain the competition between foreign and the domestic industries. In most of the countries, free trade is not followed and various tariffs and duty charges are applied on the import goods. These taxes allow the government to generate a fair bit of revenue, without utilizing their resources. Moreover, it also helps in the sustainability of the domestic industries. The prices of the imported goods are kept higher by adding these taxes so that the local customers, looking for cheaper options, have to buy the domestic items. In parallel to this, the protectionism policy allows domestic industries to raise the prices of their products, without raising the quality of their products (Ethier & Fischer, 1987, pp.1-2). Another aspect of protectionism is the allegation of quota in the trading system. Many countries use quota in trade, as an exchange of goods policy. This enforces countries to import some items from the same country, where they wish to export their goods. For an example, countries rich in technology, often lack in hand made and items, which involves more labor work than machinery. Therefore, they import such handmade items like, rugs and handicrafts, in exchange of their hi-tech technology. With this policy,