Protectionism 贸易保护主义

By the end of this lesson, you will be able to extract information to address a financial problem.

ENTREPRENEUR: A sandwich is the perfect thing when you're hungry and its pretty cheap ... there was a time in the early part of the 19th Century when many people in Britain couldn't afford even this staple food and ended up getting poorer and left hungrier. In 1815 the British Government introduced the Corn Laws. They introduced these laws as a way to prevent import of cheap foreign grain from bringing the price of British grain down and risking British farmers and their incomes. Until 1815, Britain freely traded with neighboring countries ... the poor people of Britain relied on cheap imported grain rather than the more expensive domestically produced grain. In the end, many couldn't afford to buy any grain and went hungry.

ENTREPRENEUR1: Simply put, when given the choice, consumers bought the cheaper, imported goods, and the national industry suffered, as a consequence. It couldn't compete. The government's decision to increase taxes on imports from other countries, in order to protect the goods and products made in its own country, had a seriously negative effect on Britain. However, the main reason countries still sometimes turn to Protectionism, at the expense of Free Trade, is to safeguard the livelihoods of their people. But in the case of Britain, The Corn Laws were eventually overturned.

ENTREPRENEUR2: Britain went back to a Free Trade economy, where they traded without restrictions. Mind you, Protectionism needn't always have negative consequences. An interesting example of positive Protectionism was in Japan ... The Japanese manufacture and export cars around the world. When exporting to the US, the Japanese government decided to do something very interesting. They decided to limit the number of cars they exported to the US.

ENTREPRENEUR3: Thus, instead of the US protecting their car industry by imposing high tariffs on Japanese cars, Japan made a key decision. Rather than flooding the US market with Japanese cars, Japan decided to control the number of cars they were going to export to the States. Japan not only avoided higher tariffs, but, due to the relatively small numbers of Japanese cars in the US, they were able to raise the price of the product resulting from higher demand. This example of Protectionism did not hurt the Japanese government's own people; in fact, it made their country money! It seems that discussions to have Free Trade or Protectionism will always rage.

ENTREPRENEUR4: Before a recession, some economists call for Protectionism, some plead for freer trade. After a recession, governments consider Protectionism to improve national production and raise the price of their commodities. But in between, Free Trade still dominates the world market. Protectionism versus Free Trade, it's food for thought!

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