Welcome To Our Presentationon

protectionism for the deve lop ing countr y PREPARED FOR

Nahid FerdousiLecturer

Course Code: ECN-201Course Title: Introduction to Development Economies

Department of Business Administration

PREPARED BY

Imran Hossen (Id No. 11102065) Md. Shams Akhter (Id No.11102075) Kaniz Fatema Kona (Id No. 111020480)Kallal Kumar Mondal (Id No.11102069) Ayesha Akter Shimu (Id No.11102055)

Economic has two trade situation 1. Free trade situation2. Trade with tariffs Free TradeFree trade lifts barriers to allow for the free flow

of trade between two or more nations.Free trade opens markets and economic opportunities.

Graphically show the free trade and trade with tariffs

Tariffs increase the prices of imported goods. Because of this, domestic producers are not forced to reduce their prices from increased competition, and domestic consumers are left paying higher prices as a result

Figure 1 illustrates the effects of world trade without the presence of a tariff.

When a tariff or other price-increasing policy is put in place, the effect is to increase prices and limit the volume of imports. In Figure 2, price increases from the non-tariff P* to P'. Because price has increased, more domestic companies are willing to produce the good, so Qd moves right. This also shifts Qw left. The overall effect is a reduction in imports, increased domestic production and higher consumer prices.

Advantages of Free Trade1.Increased Production and Efficiency:. Countries that specialize in creating commodities where they have the comparative advantage will increase their production, instead of focusing on products or industries in which other countries have the comparative advantage.

2.Consumer Satisfaction: Free trade leads to a global market, consumers benefit from the competition and variety brought to the market. When other countries produce some items cheaper, the consumer purchases products for less price

3.Employment and Economic Growth: Although free trade may cause jobs in one particular industry to wind up overseas, jobs in the exporting and importing sides will increase. When productivity increases in importing and exporting, wages also tend to rise.

4.Foreign Exchange Gains and Decreased Poverty: When a country purchases a product from another country with money, they essentially send the exporting country non-interest IOUs in exchange for real goods. The exporting country, though, must use the money within the country that imported the products

5. Increased Export The country with the restrictions also limits its own ability to

export. When a country removes their trade restrictions, other countries are more willing to accept the export

6. Reducing Tariff barriers leads to trade creation: Trade creation occurs when consumption switches from high cost producers to low cost producers.

, The Disadvantages of Free Trade1.Increased Competition When countries open their international borders to member nations

in the same free may come from other nations in the same free trade zone. All countries within the zone would be competing with one another for the same consumers.

 2.Increased Unemployment local consumer would benefit from the lower price of imports and they

purchased greater commodity, while domestic producers and the employees would suffer as they loss business to lower cost. So they decrease their production and create unemployment in this economy.

3.Corporate Restructuring:Companies in free trade zones are always in competition with one

another. This competition can al Increased National Security

The advantages of trade barriers

1.Increased National SecurityOne advantage to trade restrictions is that it can encourage economic

independence---a policy known as "autarky2.Protection of Growing IndustriesWithout trade restrictions, their domestic electronics industry might be crushed

by competition from abroad; trade barriers can help keep the industry safe until it can compete on its own

3.Protection Against Other CountriesTrade barriers can also protect a country against other, nations. "Dumping"

occurs when one nation sells large amounts of its product in another country below cost, allowing them to starve out possible competition.

4.Economic UnderdevelopmentFree trade regions may also impact some regions more than others in terms of the level of economic development. Some areas of the region may attract a greater level of economic development than others, resulting in the economic underdevelopment

Promotion of Domestic Jobs

The most frequently cited advantage of trade barriers is that they help to promote domestic employment by keeping companies from "off shoring," or transferring domestic jobs abroad. These trade barriers do help to preserve current employment, which can be seen as a key advantage.

4.Promotion of Domestic Jobs The most frequently cited advantage of trade barriers is that

they help to promote domestic employment by keeping companies from "off shoring," or transferring domestic jobs abroad. These trade barriers do help to preserve current employment, which can be seen as a key advantage.

Disadvantage of protectionism1.price increase : Consumers pay more with protectionism too.

Without a system of competitive pricing, domestic companies are free to raise their prices without raising the quality of their goods.

2.Import decreases: trade protectionism limits consumer access to foreign goods and non-domestic companies that offer unique products and services are also subject to the aforementioned restrictions

3.foreign business communication decreases: . Businesses face unfair restrictions while their domestic competitors are offered financial boons, and consumers end up paying higher prices for a limited variety of products that aren't always worth their cost

Protectionism and Free Trade Protectionism is the government practice of restricting imports and

exports between one country and another. Tariffs are sometimes placed on imports or exports, raising the price for doing such things. In contrast, free trade removes such restrictions.

2(i) Protectionism Benefits The aims of protectionism are to preserve jobs. By increasing the cost of

importing, businesses are encouraged to produce products within the country where the products will be sold.

2(ii) Free Trade Benefits Free trade allows businesses to trade more frequently, resulting in a

greater exchange of goods and services. Businesses also can save money by finding cheaper labor.

3(i) Protectionism Consequences Free trade advocates argue that protectionism leads to higher prices

because workers at home are not necessarily willing to work for lower wages.

3(ii) Free Trade Consequences Free trade often leads to a loss of jobs through outsourcing. Also,

businesses often attempt to influence the leaders of foreign countries in order to behave in the best interests of international businesses, which cause foreign leaders to focus less on the best interests of their own people.

 

   

The Difference Between Free Trade and Protectionism

ProtectionismTariff: Tariff is a tax on imports and is used to restrict

imports and raise revenue for the government. Quotas: A quota is a limitation in value or in physical

terms, imposed on import and export of certain goods for a certain period of time. This category includes global quotas in respect to specific countries, seasonal quotas, and so-called "voluntary" export restraints.

LicensesA license is granted to a business by the government, and allows the business to import a certain type of good into the country. For example, there could be a restriction on imported cheese, and licenses would be granted to certain companies allowing them to act as importers. This creates a restriction on competition, and increases prices faced by consumers

Non-tariff barriersNon-tariff barriers to trade (NTBs) are trade barriers that

restrict imports but are not in the usual form of a tariff. Some common examples of NTB's are anti-dumping measures and countervailing duties, which, although called non-tariff barriers, have the effect of tariffs once they are enacted

Bangladesh - tariff rateTariff rate, most favored nation, weighted mean, primary products

(%) in Bangladesh was 8.79 as of 2008. Its highest value over the past 19 years was 55.48 in 1994, while its lowest value was 7.40 in 2007.

Source: World Bank staff estimates using the World Integrated Trade Solution system, based on data from United Nations Conference on Trade and Development's Trade Analysis and Information System (TRAINS) database and the World Trade Organization’s (WTO) Integrated Data Base (IDB) and Consolidated Tariff Schedules (CTS) database.

Why trade and tariff benefited for Bangladesh?

The benefits of tariffs are uneven. Because a tariff is a tax, the government will see increased revenue as imports enter the domestic market. Domestic industries also benefit from a reduction in competition, since import prices are artificially inflated. If the price of steel is inflated due to tariffs, individual consumers pay more for products using steel, and businesses pay more for steel that they use to make goods. In short, tariffs and trade barriers tend to be pro-producer and anti-consumer.

In the short run, higher prices for goods can reduce consumption by individual consumers and by businesses. During this time period, businesses will profit and the government will see an increase in revenue from duties. In the long term, businesses may see a decline in efficiency due to a lack of competition, and may also see a reduction in profits due to the emergence of substitutes for their products. For the government, the long-term effect of subsidies is an increase in the demand for public services, since increased prices, especially in foodstuffs, leave less disposable income.

Conclusion

we support the tariff Because Tariff is beneficiaries in developing country like Bangladesh. When we impose tariff then the price increase foreign product .local people do not purchase huge foreign product and also local product demand increases .developing country industry expand and unemployment reduce in the country Government is benefited for the tariff and developing country competition with developed country

THANK YOU

EVERY ONE