INTERNATIONAL TRADE

BLG20103

“ASSIGNMENT 2”

PREPARED BY:

VIRA BHADRESHVAR A/L RAMESPAPU

(012019090408)

PREPARED FOR:

MADAM ASMAHANI BINTI ASWADDALAI

SUBMISSION DATE:

10TH APRIL 2020

 Written Report Rubric
(BLG20103 – Assignment 2)
NAME : VIRA BHADRESHVAR A/L RAMESPAPU (012019090408)
SKILLS CRITERIA SC
4 (G00D) 3 2 (NEED (POOR) 1
(SATISFACTORY) IMPROVEMENT)
Organization Information is Information is Information is Details and
(Overall presented in effective logically ordered with scattered and needs examples are not
order, flow order. Excellent paragraphs and further organized, are
and structures of transitions development hard to follow
transitions) paragraphs and and understand
transitions enhances
readability and
understandability
Introduction Introductory paragraph Introductory Introductory Introductory
(thesis is clearly stated, has a paragraph is clearly paragraph is vague paragraph is not
statement) sharp, distinct focus stated with a focus apparent
and enhances the
impact of the report
Quality of Supporting details are Some details don’t Details are Unable to find
information specific to topic and support the report somewhat sketchy specific details
(supporting provide the necessary topic
details) information
Answers well explained been explained only been not been
mentioned mentioned
Conclusion Concluding paragraph Concluding paragraph Concluding Concluding
summarizes and draw a follows and paragraph is only paragraph is not
clear, effective summarizes report remotely related to apparent
conclusion and discussion, and draw the report topic
enhances the impact of a conclusion.
the report
Originality The answers presented Some original answer Some original The answer is not
are significantly with 20%- answer with 30-40% original (mainly
original, innovative, or 30% C&P C&P C&P)
creative aspect(s).

Format Report follows all the Report follows most Report follows few Report lacks
given guidelines of the given elements of the many elements of
guidelines given guidelines. the given
guidelines.
Neatness Very neat Neat Natural Bad
Total /
ASSIGNMENT INSTRUCTION:
Write an essay of approximately 250 words based on the following topic. You should use
your own ideas, knowledge and experience and support your arguments with examples and
relevant evidence. The essay must have a thesis statement, topic sentences, supporting
details and conclusion.

QUESTION:
Theories as well empirical evidence have proven that free trade give more benefits to
countries involved than trade with restrictions. However, many countries still impose
restrictions in the forms of tariff, quota or and other measures.
Discuss FIVE (5) arguments that are often used by countries who practice protectionism.

(50 marks)
 Protectionism, policy is to protect domestic industries from foreign competition by
tariffs, subsidies, quotas on imports, or other restrictions or limitation set on the imports of
foreign trade to benefit domestic industries. Protectionist policies are usually applied in order
to boost economic growth in the domestic sector, but it may also be enforced for defense or
protection issues. The practice of following protectionist trade policy allows a country's
government to encourage domestic producers and thus improve domestic production of
goods and services by enforcing tariffs or otherwise restricting the marketplace's
international goods and services. Arguments are used by countries who practice
protectionism. Countries that tend to impose limitation on the types of tariffs, quota or
some other steps should practice protectionism.

Governments use several arguments to justify their protectionist policies. First, the
argument of national security implies that it is important to secure those industries with a
tariff, in case of a conflict, to insure sustained domestic development.  For example,
Germany was largely alone in the war in this event, and therefore had very limited trade
partners Protectionism, may help maintain sufficient domestic supply of essential resources
in the event of conflict, including food, steel, military assets, and oil. For example, President
Donald Trump has announced his intention to bring strong demands on aluminum and steel.
The argument that free trade controls are essential for public safety has some realistic
qualifications in encouraging free trade. (Rushe, 8 Mar 2018)

Second argument is Infant industries argument It is incredibly challenging for

emerging entrants to compete with well established, highly funded, highly competitive
businesses in developed countries. Developing nation governments may implement policies
such as import taxes, tariffs, quotas and exchange rate limits to enable Infant industry can
enjoy the benefits of international exporters. For example, President Donald Trump has
announced tariff on foreign steel and aluminum to keep the import low and domestic steel
sector has become protected from external trade through restrictions and limitations that
have hold other steel producers out of the U.S. market. This allows the U.S. steel industry to
regulate its own domestic industry and perform efficiently on global markets. (Kiely, 29
August 2019)

Third argument is Unfair competition argument it happens when manufactured

products have considerably lower foreign-market costs than the country of origin normal
price. Antidumping measures secure domestic consumer values by ensuring that products
are not sold too low below manufacturing costs or have fair market rates. For example, the
U.S. has used antidumping policies and tariff to protect domestic industries from China's
cheap import. Free May allow dumping, particularly in countries that are not industrialized.
(AMADEO, 26 February 2020)

Fourth argument is Jobs argument is a political argument for trade protectionism

from the point of view that protecting the livelihood of workers and the industries and firms
which employ them are essential to the economic growth and well-being of a nation. For
example, the US which has a costly steel sector, could not survive against Brazil's
comparatively cheap steel industry. The US steel industry can lay off staff in these
circumstances in order to cut costs and stay competitive. The US steel industry could lay off
staff in these circumstances in order to cut costs and stay competitive and workers who are
dependent on industry would then fall into poverty. (US tariffs on derivative steel, aluminium
imports take effect, Feb 09, 2020)

Fifth argument is Cheap foreign labor argument a business can import labor
intensive goods from the nation where labor is cheaper than at home. Many countries have
comparatively cheap labor. Consequently, they manufacture goods at low price, leading to
lower prices in international market. These countries have the ability to create unequal
market rivalry. For example, a worker in the capital-intensive United States who uses his
machines to produce 500 "units" for $50 pay is far cheaper than an Asiatic worker with little
equipment who produces only 25 "units" for $5 pay. (Jeffrey, 2019)

In conclusion, international trade agreements are trade agreements across

international borders intention to reduce or eliminate trade barriers and promote economic
exchange. International trade encounters a variety of obstacles, some of them relate to the
protectionism identified in other elements that reduce trade incentives. This is usually done
through tariffs, quotas, taxes and other restrictions on trade. It is often helpful to establish
rules and regulations across different countries, in particular for issues like the protection of
intellectual property rights, which allows companies to work across boundaries.
References
AMADEO, K. (26 February 2020). US Trade Deficit With China and Why It's So High.

Jeffrey, T. P. (2019, MAY 15). Workers Making Apple iPhones Start at $3.15 Per Hour--in
China.

Kiely, L. R. (29 August 2019). Trump’s Steel Industry Claims.

Rushe, D. (8 Mar 2018). Donald Trump signs order for metals tariff plan, prompting fears of
trade war.

(Feb 09, 2020). US tariffs on derivative steel, aluminium imports take effect. America: The
Economic Times.