essay writing- question why is trade protection bad

Trade is important for an economy because 

• its worth a lot of money and creates many jobs and GDP
• without trade economics cannot grow and this makes it a major economic objective 
• its an injection into the circular flow and a major source of economic growth
• trade creates jobs and imports help bring better standard of living and more jobs 

Australia is a nation dependent on trade because 

• trade makes up 60% of the GDP and is worth $5b 
• Australia is a nation with large land resources and is a major commodities exporter 
• trade creates more jobs and without our mining boom we would be much poorer 
• the injection of exports creates net exports of a multiplier effect and boosts the current account deficit 

Trade protection is defined as 

• any measure used to protect the economy and ensure we can sell more exports 
• the intervention by the government to control and manage external balance and social equity 
• the use of tariffs and subsidies to give domestic firms an advantage against overseas imports 
• anything that make imports more expensive and less attractive to domestic consumers 

historically Australia has relied heavily of trade protection because 

• as  a small nation we were isolated and needed to build up our own industry to become more competitive 
• the role of trade protection was essential insensuriung external balance and price stability 
• we were stopping our infant industries being overwhelmed by bigger Asian economies 
• the small size of the market and the lack of industry  needed protection to get established  using subsidies and tariffs 

an example of this was the subsidies and barriers put into protecting the australian car industry when it was established 

• it helped make sure that holders were better than valiant and chrysler cars 
• it provided up to 5000% subsidies to ensure the infant industry was able to get up and be more competitive 
• it put embargoes on all european cars because these were the best and local producers couldn't compete even with cheaper prices 
• because the government was a direct benefit of car industry and took a share of the profits in return for the subsidies they ploughed into establishing the infant industry 

The use of trade protection in the 1950's helped  

• Australia win the war against communism and cheap imports from Asian economies like japan
• establish a manufacturing industry and created steel works, car and white goods industry 
• make goods cheaper for australians and improve our standard of living 
• achieve external balance so the country ran a current account surplus unlike today 

an example of trade protection which makes foreign imports more expensive and allows domestic producers a greater share of the market is 

• a tariff on the world supply curve 
• a subsidy on the world supply curve 
• a tariff on the domestic supply curve 
• a subsidy on the world curve 

another type of trade protection which can be used is 

• a subsidy which helps domestic producers by giving them new ideas and the government planning their production 
• a subsidy to consumers so that goods are cheaper and they wont choose to but more expensive imports 
• a consumption subsidy to make imports less competitive 
• a production subsidy which allows government payments to offset higher production costs 

some trade protection is less obvious and includes 

• bans on some imports so that there is less competition 
• bureaucratic restrictions which must be met before imports can be brought into  a country like health and safety standards
• hidden subsidies on exports  so that other countries don't know they are being competed against 
• keeping wages and working conditions lower to make them more competitive 

the government will often choose to implement trade protection for economic and political reasons - the most important of these is 

• the protection of domestic jobs because voters will often reject governments who do not protect domestic industry 
• the support of powerful multinationals who can support the government with funding 
• to make a statement against countries who have lower wages than their owen country because its not fair 
• its a requirement of the external balance objective - that trade protection is the best way to achieve - stable exchange rate and lower levels of foreign debt