The Role Of Infant Industries In International Trade

There has been overwhelming evidence to support that international trade has been a pivotal economic advancement within our country, “Today, the $12 trillion U.S. economy is bolstered by free Trade, a pillar of America's vitality” (Markheim). US international trade is mainly composed of the theory of comparative advantage, where a country is specializing in producing a specific good more efficiently than another country at a lower opportunity cost (Fontinelle). Using the theory of comparative advantage, international trade has proven its economic success in the US. However, there are still many opponents to such policies, many of which are in our current, and soon to be, Electoral College. With the upcoming presidential election of 2016 and
Candidates like Bernie Sanders and Joe Biden are adamant that startup companies and/or industries will not have a chance at succeeding when international competition is so immense. It is argued that these international corporations are preventing these “infant” industries from infiltrating the free trade market and competing with the already established power houses benefiting from international trade, giving the underdogs little to no chance of advancement. Economic markets are naturally competitive, and newer economies are highly defenseless to their more developed counterparts in other countries. Fortunately, there are useful policies that work well in protecting infant industries in international trade. Essentially, the infant industry argument states that new industries need protection until they have become efficient enough to take part in the world market. While protectionism may seem as though it would be enough to solve the problem at hand, the opposition still has its doubts, arguing that while protectionism policies protect infant industries, they do not speed up development of technologies, hindering these industries from prospering in the international market. The opposition also argues industry dependency on tariffs as well as losses incurred by start-up industries. All of which are arguments that can be
Increased tariffs help provide a domestic market for the new firms. This gives new industries a chance to get established. Over time, the new industries will become more efficient and benefit from economies of scale (Fletcher). Once this has been accomplished, the tariffs can then be reduced, all in order to help infant industries to succeed.
Suppositionally, it is normal for start-up industries to incur losses during the start-up phase if the long-term gains are considerable enough. Once developed, given their appropriate protectionism and increased tariffs, it can compete with mature industries around the world, and it will begin to make profits. As a result of this, protecting infant industries can benefit the nation employing them in the long-run. Therefore it is important to note, that competition as well as protectionism and tariffs strengthens infant industries as well as the global and domestic economy.
“Free Trade is taking domestic