"International Business: Session 6" protectionist policies; economic development programs (export promotion strategy, import substitution strategy); industrial policy (key domestic industries chosen, protected, and promoted); regional agreements. | International Business Session 6 National Trade Policies Protectionist Policies Economic Development Programs Export promotion strategy Import substitution strategy Industrial Policy Key domestic industries chosen, protected, and promoted Regional Agreements 2 Trade Intervention Should a national government intervene to protect the country’s domestic firms by taxing foreign goods entering the domestic market or constructing other barriers against imports? Should a national government directly help the country’s domestic firms increase their foreign sales through export subsidies, government-to-government negotiations, and guaranteed loan programs? 3 Two Types of Rationale for Protectionism Defensive barriers safeguard industries, workers, special interest groups, protect infant industries and to promote national security (export controls). Offensive barriers pursue a strategic or public policy objective, such as increasing employment or generating taxes. International Business: Strategy, Management, and the New Realities 4 National Defense Argument Country must be self-sufficient in critical raw materials, machinery, and technology or else be vulnerable to foreign threats Appeals to general public Protects steel, electronics, and machine tools industries, and merchant marines 5 Infant Industry Argument Imposition of tariffs to give . firms temporary protection from foreign competition until firms are fully established Powerful economic development strategy Which industries should be protected? For how long? 6 Maintenance of Existing Jobs Jobs in high-wage countries threatened by imports from low-wage countries Forms of assistance Tariffs Quotas 7 Protection of the National Economy advanced economies cannot compete with those in developing countries that employ low-cost labor, thus governments should impose trade barriers to block imports Preserving National Culture and Identity Governments seek to protect certain occupations, industries, and public assets . | International Business Session 6 National Trade Policies Protectionist Policies Economic Development Programs Export promotion strategy Import substitution strategy Industrial Policy Key domestic industries chosen, protected, and promoted Regional Agreements 2 Trade Intervention Should a national government intervene to protect the country’s domestic firms by taxing foreign goods entering the domestic market or constructing other barriers against imports? Should a national government directly help the country’s domestic firms increase their foreign sales through export subsidies, government-to-government negotiations, and guaranteed loan programs? 3 Two Types of Rationale for Protectionism Defensive barriers safeguard industries, workers, special interest groups, protect infant industries and to promote national security (export controls). Offensive barriers pursue a strategic or public policy objective, such as increasing employment or generating taxes. International Business: .
