International Trade Debate

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Firstly, you will need to decide if you're for or against international trade. This question does not have a "right" answer. You just need to be able to support whatever position you take with some facts and details. You will find this easier if it is what you really believe, of course.

Trade restrictions can take the form of a tariff, with taxes imports, or a quota, which limits the amount of the imported good. Tariffs are a form of taxation which benefits domestic manufacturers at the expense of the consumer. They pay a higher price than would have been the case had no duty been imposed on the importer. Another consumer group is the one which buys an American product at a high price which is protected by the tariff. Were there no tariff, the domestic firms would either be forced to lower their prices or shift to some line of production in which they could compete successfully. Then there is the non-consumer group which would have entered the market had the lower prices been in effect; their form of the "tax" is simply the inability to enjoy the use of products which might have been available to them had the State not intervened in international trade. A quota benefits domestic producers in the same way a tariff does, but the additional money expended on foreign goods goes to the foreign producers, not the domestic government.

Some argue that a high level of international trade protectionism is needed if developing countries are going to be able to industrialize and develop their own domestic industries in the face of foreign competition. This "infant industry" argument for tariff protection has actually been implemented successfully. Both the US and Germany used tariffs to protect their fledgling industries during the Industrial Revolution from their more efficient competitors in Britain. Once the industries were established, the tariffs were removed.

The primary argument against this policy is that comparative advantage dictates that free trade is always in the best interest of everyone. Tariffs prevent resources from being allocated efficiently. This argument doesn't take into account the long term interests of nations however. In fact if a country wants to industrialize, it isn't going to want to be efficient in the short run. It needs to be inefficient for long enough to get its industries off the ground. A better argument is that tariffs are an inefficient means of accomplishing this goal. Direct production incentives will do more to stimulate new industries. This means ...