Ecuadorian Proteccionism

Páginas: 3 (516 palabras) Publicado: 3 de octubre de 2011
INTERNATIONAL TRADE.
Name: Jenny Triviño Macías.
Teacher: Econ. Vicente Maldonado.

Ecuadorian proteccionism 
In my point of view, the application of protectionist policies by the government iswrongly used to be more disadvantages than advantages in the national economy. 
It is true that a free market economy can affect the local production, generates unemployment because they cannotcompete with the quality and variety of imported products and a world market price does not cover the costs of most of the domestic industry. But an economy can be quite protective even more harmful thanfull access to the free market.
Application of additional tariffs may increase the smuggling of products, mainly for essentials like a cell phone which demand has increased in recent years, or asfootwear and textiles. 
Higher unemployment means more crime, because while supporting local production through protectionist measures like tariffs, there is often mutual productive inefficiency incombination with lower demand for high prices. Companies do not produce more cheaply because short-term is impossible, and increased employment is not guaranteed to be possible to hire the same employeesfor overtime. Anyway the costs of products whose tariffs will be higher, making it impossible for many consumers to buy those goods. 
Increased crime and higher tariffs mean less foreign investment,and allowed to consume over the Production Possibilities Frontier. 
In addition, you must also take into account opportunity costs and externalities among which are crime and pollution by reducing theimport of hybrid cars due to higher tariffs. 
In short, the figures tell us everything. If there is no crime so there would be no poverty, and in contrast we see that it has even increased becausepeople either do not have jobs or wages cannot afford to survive. 
It needs to maintain a balance between protectionism and free trade, and also develops the international competitiveness instead of...
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