Explain the pros and cons of the government of a county ✓ Solved

Share the link of a recorded presentation of maximum 10 minutes on the following topic: Explain the pros and cons of the government of a county of your choice, using the following trade barriers: 1. Tariffs 2. Subsidies 3. Quotas. Justify your answer for each trade barrier with actual data and evidence for specific industries.

The presentation must meet the following requirements:

  • 10 minutes Maximum presentation

  • PowerPoint presentation being shown in the recording together with your face or torso while you present

  • The PowerPoint has to be visually appealing, with just the key sentences or words.

  • The presenter cannot read the slides or a document. Must present in an engaging manner.

  • This is an individual piece of work; it is not a team exercise.

  • Harvard Referencing System must be used with a referencing section being required in the last slide of the PowerPoint presentation.

  • Submit the link of the recording in the Assessment section in week 7 on Moodle.

Paper For Above Instructions

The government plays a vital role in shaping the economic landscape of a country through the implementation of various trade barriers. This paper will explore the pros and cons of trade barriers, specifically tariffs, subsidies, and quotas, using Canada as a case study. Understanding these concepts is crucial as they reveal the rationale behind protectionist policies that aim to support domestic industries while managing international trade.

Tariffs

Tariffs are taxes imposed on imported goods, making them more expensive relative to domestic products. The primary advantage of tariffs is that they protect local industries from foreign competition. By raising prices on imports, tariffs encourage consumers to buy domestically produced goods, leading to increased sales and production in the local market. For example, in Canada, the imposition of tariffs on Canadian lumber imports from the United States aims to protect the domestic lumber industry from cheaper U.S. exports (Canadian Lumber Trade Alliance, 2021).

However, tariffs also have downsides. They can lead to retaliatory actions from trading partners, resulting in trade wars that might hurt exporters from both countries. For instance, in 2018, Canada's retaliatory tariffs on U.S. goods were a direct response to U.S. tariffs on steel and aluminum, which affected various sectors and led to increased prices for consumers (Government of Canada, 2021). Moreover, tariffs may result in inefficiency within domestic industries, as they can lead to complacency and diminish the incentive for firms to innovate and improve productivity.

Subsidies

Subsidies refer to financial assistance provided by the government to support specific industries, making their products cheaper than imported alternatives. In Canada, the dairy farmers receive substantial subsidies that help them maintain stable prices despite fluctuations in the global market (Agriculture and Agri-Food Canada, 2021). The main advantage of subsidies is that they ensure the viability of critical industries, particularly agriculture and technology, thereby securing jobs and maintaining economic stability.

Nonetheless, subsidies can encourage overproduction and misallocation of resources. They may also lead to trade distortions, as subsidized prices do not reflect the true market conditions. Such discrepancies can provoke disputes at international forums such as the World Trade Organization (WTO), with countries accusing each other of unfair trade practices (WTO, 2021). Additionally, over-reliance on government support can inhibit innovation and competitiveness in the long run, placing industries in a vulnerable position as global market dynamics shift.

Quotas

Trade quotas limit the quantity of a specific good that can be imported or exported during a given timeframe. For instance, Canada implements quotas on certain dairy products, allowing for a controlled amount of imports while protecting domestic production (Canadian Dairy Commission, 2021). The major advantages of quotas include stabilizing local markets and encouraging domestic production by limiting foreign competition.

However, the imposition of quotas can also lead to a number of adverse effects. There can be price increases for consumers due to limited supply and higher prices for the domestically produced goods. Furthermore, quotas can foster black markets and create corruption, as businesses may seek illicit ways to bypass restrictions. The availability of goods becomes unpredictable, leading to consumer dissatisfaction and potential shortages in the market (Hummels & Klenow, 2005).

Conclusion

In conclusion, while trade barriers like tariffs, subsidies, and quotas can provide significant benefits to a country by supporting local industries and ensuring market stability, they must be balanced with the potential negative impacts on consumers, international relations, and economic efficiency. Policymakers need to carefully consider the implications of these trade barriers and look for ways to nurture domestic industries without stifling competition and innovation. A comprehensive approach that includes revisiting the rationale behind existing protections is essential to adapt to a rapidly changing global economic environment.

References

  • Agriculture and Agri-Food Canada. (2021). Dairy Policy. Retrieved from [Link]

  • Canadian Dairy Commission. (2021). Regulations and Quota Policies. Retrieved from [Link]

  • Canadian Lumber Trade Alliance. (2021). Canadian Softwood Lumber Industry. Retrieved from [Link]

  • Government of Canada. (2021). Retaliatory Tariffs. Retrieved from [Link]

  • Hummels, D., & Klenow, P. (2005). The Variety of Goods and Trade. American Economic Review, 95(3), 704-718.

  • WTO. (2021). Trade and Subsidies. Retrieved from [Link]