Whose Interests Should Be the Paramount Concern of Government Trade Policy – the Interests of Producers (the Business and the Employees) or of the Consumers?
Vol. 3, No. 9
International Journal of Business and Management
The Analysis of Trade Policy Formulation From the Benefit of Producer and Consumer
Yue Zhao School of Management, Southwestern University of Finance and Economics Wenjiang Distrcit, Chengdu 611130, China E-mail: zhaoyueyy@gmail.com Abstract The implementation of a trade policy will have different effects on the different interest groups. The benefits of producer and consumer are often opposite. In order to look out an appropriate trade policy, we should balance the benefits of producer and consumer when we formulate trade policy. Keywords: Trade Policy, Producer, Consumer, Benefit Whether the government takes up the freedom trade policy or the protective trade policy, it will affect two interest groups: one is the native produce corporation; The other one is the native consumers. Generally speaking, the free trade policy is better to the consumers, but this will bring big challenge to the native producers. However, if the government implements protective trade policy to prohibit the foreign goods from coming into the native country, this will short down the supply of foreign goods and the consumers’ choices. This kind of policy makes the consumers have to spend more money on the import goods. Every coin has two sides, so is the foreign trade policy. The enterprises’ and the consumers’ benefits are controversial, so the government should balance them, when the government sets up the foreign trade policy. 1. The introduction of the problem The foreign trade policy can’t protect the producers’ and the consumers’ benefits at the same time, so when we set up the foreign trade policy, we should obey this principle: Maximize one’s benefit at the condition that the other one’s lest loss, in order to get overall benefit. To an enterprise with low level of productive, it may hope to stand stable in the native market; however, to an enterprise with high level of productive, it may hope to get a large space in
International Journal of Business and Management
The Analysis of Trade Policy Formulation From the Benefit of Producer and Consumer
Yue Zhao School of Management, Southwestern University of Finance and Economics Wenjiang Distrcit, Chengdu 611130, China E-mail: zhaoyueyy@gmail.com Abstract The implementation of a trade policy will have different effects on the different interest groups. The benefits of producer and consumer are often opposite. In order to look out an appropriate trade policy, we should balance the benefits of producer and consumer when we formulate trade policy. Keywords: Trade Policy, Producer, Consumer, Benefit Whether the government takes up the freedom trade policy or the protective trade policy, it will affect two interest groups: one is the native produce corporation; The other one is the native consumers. Generally speaking, the free trade policy is better to the consumers, but this will bring big challenge to the native producers. However, if the government implements protective trade policy to prohibit the foreign goods from coming into the native country, this will short down the supply of foreign goods and the consumers’ choices. This kind of policy makes the consumers have to spend more money on the import goods. Every coin has two sides, so is the foreign trade policy. The enterprises’ and the consumers’ benefits are controversial, so the government should balance them, when the government sets up the foreign trade policy. 1. The introduction of the problem The foreign trade policy can’t protect the producers’ and the consumers’ benefits at the same time, so when we set up the foreign trade policy, we should obey this principle: Maximize one’s benefit at the condition that the other one’s lest loss, in order to get overall benefit. To an enterprise with low level of productive, it may hope to stand stable in the native market; however, to an enterprise with high level of productive, it may hope to get a large space in
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