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Terms of trade argument |
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Terms of trade argumentSame as the optimal tariff argument, which works by restricting the quantity of trade in order to improve the terms of trade.Similar MatchesCultural argument for protectionCultural argument for protectionThe view that imports undermine a country's culture and identity -- for example by changing consumption patterns to ones more similar to those abroad, or by reducing demands for domestically produced art and music -- and therefore that imports should be restricted. Income redistribution argument for a tariffIncome redistribution argument for a tariffThe argument that tariffs should be used in order to redistribute income towards the poor. In a rich country, where unskilled labor is the scarce factor, this can make sense as explained in the Stolper-Samuelson Theorem, but it is a second-best argument. Fairness argument for protectionFairness argument for protectionThe view that it is unfair to force domestic firms to compete with foreign firms that have an advantage, either in terms of low wages or due to foreign government policies. This misinterprets economic activity as a game, the purpose of which is to win, rather than as a means of using limited resources to satisfy human needs. See level playing field. Optimal tariff argumentOptimal tariff argumentAn argument in favor of levying a tariff in order to improve the terms of trade. The argument is valid only in a large country, and then only if other countries do not retaliate by raising tariffs themselves. Even then, this is a beggar thy neighbor policy, since it lowers welfare abroad. See Johnson (1954). Second-best argument for protectionSecond-best argument for protection1. Any argument for protection that can be countered by pointing to a different and less distortionary policy that would achieve the same desired result at lower economic cost. 2. An argument for protection to partially correct an existing distortion in the economy when the first-best policy for that purpose is not available. For example, if domestic production generates a positive externality and a production subsidy to internalize it is not available, then a tariff may be second-best optimal. Further SuggestionsLabor standards argument for protectionEmployment argument for protection Sunset industry argument Foreign investment argument for protection Labor standards argument for protection Infant industry argument Pauper labor argument Externalities argument for protection Domestic distortions argument for protection Infant industry argument Self-sufficiency argument for protection Noneconomic objectives argument for protection Balance of payments argument for protection Strategic trade policy argument for a tariff Environmental protection argument for a trade intervention National defense argument for protection Revenue argument for a tariff Patriotism argument for protection Monopoly argument |
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