Critique the Argument That Trade Protection Is Needed to Protect

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The Answer is There are several problems with using trade protection to "save Canadian jobs." First, imports may eliminate some jobs, but they create others in those industries that import products.Second, there is a fallacy of composition.The imports of one nation are the exports of another nation.Using trade policy to protect domestic jobs in Canada will weaken our trading partners.The reason for this weakness is that the trading partners will export less and thus have less income with which to buy imports from Canada.Third, there is the possibility of retaliation from trading partners that make all nations worse off.This problem occurred in the 1930s when high tariffs were imposed by most nations.Fourth, there are long run feedback effects from an excess of exports over imports.This policy leads to less income for other nations to buy our goods.Workers in Canada's export industries are thus hurt and resources are reallocated to protected industries.The inefficient resource allocation results in a great cost to the nation.

Critique the Argument That Trade Protection Is Needed to Protect

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Critique the Argument That Trade Protection Is Needed to Protect

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Correct Answer:VerifiedShow Answer

Correct Answer:
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