Topic > Political arguments and motivations behind trade...

The following essay aims to highlight and analyze the main political arguments in favor of trade intervention and the rationale behind it. Firstly, what should be noted here is that international trade has provided several benefits for businesses as they can expand into several new markets and increase productivity by adopting different approaches. As today's market is more dynamic and characterized by an interdependent economy, the volume of international trade has grown significantly in recent years, reducing barriers to international trade. However, after experiencing the 2008 economic crisis, many countries took a different approach in terms of trade barriers, introducing higher tariffs to protect domestic businesses from foreign competition (Hill). Second, to better understand the implications of pro-trade policy arguments it is essential to highlight the main trade policy instruments (see Appendix 1). Political arguments for trade intervention are primarily about protecting the interests of some groups at the expense of other groups. In most cases, domestic businesses benefit, while customers suffer the consequences. One of the most cited arguments in favor of intervention is to protect jobs and industries from unfair foreign competition (Hill). While industries such as aerospace are protected given their importance to national security, labor protection appears to be the result of unions and industries exerting political pressure given the threat of more efficient foreign firms (Hill). Many countries achieve this by increasing tariffs on imports of foreign products. What really happens when a certain sector is... in the center of the paper... national trade: new models of trade, production and investment. ,2nd ed., London: Routledge;Hill, Charles WL (2011) International Business: Competing in the Global Marketplace, 9E, McGraw-Hill Irwin.Krugman, Paul R. and Maurice Obstfeld (2003), International Economics: Theory and Policy, Addison Wesley. Micik Mia (1998). International trade. London: Macmillan Press LTD;Pomfret R. (1991). International Trade: An Introduction to Theory and Policy. , Massachusetts: Blackwell Powell, J. (1990). Political Analysis: Why Trade Retaliation Closes Markets and Impoverishes People, Cato Political Analysis no. 143. [Online], available at: http://www.cato.org/pubs/pas/pa-143.html, last accessed 5.12.2013. Salvatore D. (2011). International Economy Trade and Finance. 10th edition. John Wiley&Sons Pte Ltd.Sodersten B., Reed G. (1994) International Economics, 3rd edition, London: Macmillan