Free_Trade_or_Protectionism
合肥人事-小学周记300字
Article 1
Free Trade or Protectionism
The Case against Trade Restrictions
The Lure of Protectionism
The
argument for so-called ―protectionism‖ (called
―fair trade‖ by some) may at first sound
appealing. Supporters of ―protectionist‖ laws
claim that keeping out foreign goods will save
jobs,
giving ailing domestic industries a
chance to recover and prosper, and reduce the
trade deficits.
Are these claims valid?
有效的，有根据的
[əs'tju:tli]敏捷的
Protectionism: What It Costs
Classical Liberal philosopher John Stuart Mill
astutely observed in the last century that ―Trade
barriers are chiefly injurious to the
countries imposing them.‖ It is true today as it
was then, for the
following reasons:
Lost Jobs: Protectionist laws raise taxes
(tariffs) on imported goods and or impose limits
(quotas
①
) on the amount of goods
governments permit to enter into a country. They
are laws that
not only restrict the choice of
consumer good, but also contribute greatly both to
the cost of goods
and to the cost of doing
business. So under ―protectionism‖ you end up
poorer, with less money
for buying other
things you want and need. Moreover, protectionist
laws that reduce consumer
spending power
actually end up destroying jobs. In the USA, for
example, according to the US
Department of
Labor’s own statistics, ―protectionism‖ destroys
eight jobs in the general economy
for every
one saved in a protected industry.
Higher
Prices: Japanese consumers pay five times the
world price for rice because of import
restrictions protecting Japanese farmers.
European consumers pay dearly for EC restrictions
on
food imports and heavy taxes for domestic
farm subsidies. American consumers also suffer
from
the same double burden, paying six times
the world price for sugar because of trade
restrictions (to
give but one example). The US
Semiconductor Trade Pact, which pressured Japanese
producers to
cut back production of computer
memory chips, caused an acute worldwide shortage
of these
widely used parts. Prices quadrupled
and companies using these components in the
production of
electronic consumer goods, in
various countries around the world, were badly
hurt.
Higher Taxes: Protectionist
laws not only force you to pay more taxes on
imported goods,
①
生病的，
体衰的
](进口货物、移民人数等的)限额
An import quota is a type
of protectionist trade restriction that sets a
physical limit on the quantity of a good that
can be imported into a country in a given period
of time.
[1]
Quotas, like other trade
restrictions, are used to benefit the producers of
a good in a domestic economy
at the expense of
all consumers of the good in that economy.
but also raise your general taxes as
well. This is because governments invariably
expand their
Customs Department bureaucracies
to force compliance with their new rounds of trade
restrictions
(or in the case of
NAFTA
②
, Trade regulations). These
bureaucrats must be paid. There is also the
expense of more red tape and paperwork for
trading companies and more harassment of
individual
travelers passing through the
borders. ['hærəsmənt
n. 骚扰；烦恼
Protectionism: Who Gains?
In spite of evidence of damage caused by trade
restrictions, pressure for more ―protectionist‖
laws
persists. Who is behind this, and why?
Those who gain from ―protectionist‖ laws
are special-interest groups, such as some big
corporations, unions, and farmers’ groups? All
of whom would like to get away with charging
higher prices and getting higher wages than
they could expect in a free marketplace. These
special
interests have the money and political
clout for influencing politicians to pass laws
favorable to
them. Politicians in turn play on
the fears of uniformed voters to rally support for
these laws.
The Losers? YOU and
all other ordinary consumers. Your freedom is
being trampled into the
dust by these laws,
and you are literally being robbed, through taxes
and higher prices, in order to
line the
pockets of a few politically-privileged ―fat
cats.‖
“Protectionism is a misnomer. The
only people protected by tariffs, quotas and trade
restrictions are those engaged in uneconomic
and wasteful activity. Free trade is the
only
philosophy compatible with international peace and
prosperity.” 繁荣
Walter Block
Senior Economist, Fraser Institute (Canada)
Methods of Protection
Governments use a
variety of tools to manage their countries’
international trade positions.
Tariffs:
Tariffs are taxes on imports. Tariffs make the
item more expensive for consumers,
thereby
reducing the demand.
Tariffs
Suppose
there is a U.S company and a foreign company
producing widgets.
Cost to produce
U.S-made widget
$$1.00
Foreign-made widget $$ 0.75
The American widget factory will find it
difficult to stay competitive under this scenario.
Now, if the U.S. were to impose a tariff of 60
percent:
New cost to produce
②
北美自由贸易协定（North American Free Trade
Agreement） North American Free Trade Area
北美自
由贸易区
U.S-made widget
$$1.00
Foreign-made widget $$
1.20=[(0.75*60)+0.75]
If consumers base
their purchases only on price, the demand for the
foreign widget would fall
and the U.S. widget
industry would prosper.
If no tariff were
imposed, as under free trade, Americans would have
saved money by buying
the cheaper foreign
widget. The U.S. widget industry would either have
to become more
efficient in order to compete
with the less expensive imported products or face
extinction.
Tariffs need not push the price
of an import above the price of its domestic
counterpart. They
should be just high enough
to reduce the price differential between the
import and the
domestic good. Tariffs are
usually levied as a percentage of the value of the
import, although
sometimes a flat rate may be
charged.
ad valorem taxes: these are
protective tariffs that are based on the value of
imported products,
rather than on quantity
Specific duty tariffs: these are revenue
tariffs levied on imports at a stated amount per
unit
(such as per pair, per pound, per gallon,
per liter, and so on).
Compound Tax
Duties: a combination of specific duty
③
tariff and ad valorem taxes
Import
Quotas: Governments sometimes restrict the sale of
foreign goods by imposing
import quotas. These
limit the quantity of foreign goods that can be
imported and help
domestic producers by
limiting the share of the market that can be taken
by foreigners.
凭什么;靠那个，如何
Voluntary
Restrictions: Sometimes governments negotiate
agreements whereby a country
agrees to
voluntarily limit its export of a certain product.
Japan voluntarily limited its export
of cars
to the United States in 1992 to 1.65 million cars
per year. With tariffs, it is the
importing
country that stands to gain through increase in
the tax revenue. However, in case of
quantitative restraints, the exporting country
gains as the price of the imported good rises.
Both import quotas and voluntary
restraints thwart the functioning of the free
market. The
quantity of goods remains constant
while the price changes, instead of demand and
supply
determining both quantity and price.
Subsidies: Another way to achieve the
goals of protectionism is to make the domestic
industry more competitive. Subsidies, which
are grants by the government to an industry, can
accomplish this. Subsidies can be:
Direct---outright payments
Indirect
---special tax breaks or incentives, buying of
surplus goods, providing
low-interest loans or
guaranteeing private loans.
For
example, the United States subsidizes the sugar
and dairy industries, among
others.
③
以课税对象的重量、容积、面积、长度等计量单位为标准,按固定单位税额计征的各种税
Trade Ban: Sometimes governments
ban trade with certain countries for political
reasons—during times of war or political
crises. Governments also ban import of certain
products
to protect domestic industries.
Governments also ban import of certain products to
protect
domestic industries. For instance,
Japan bans importation of rice to protect its
domestic rice
industry. A complete prohibition
on imports of certain products or certain
countries is called
embargo.
Imposing
standards: Health, environmental and safety
standards often vary from country to
country.
These may act as a barrier to free trade and a
tool of protectionism. For example, the
European Union has very stringent health and
safety standard that goods have to meet in order
to
be imported.
Article 2
Protectionism, free market and global
regulator
Bharat Jhunjhunwala
EVEN as
the world strives to open up, economies continue
to practice protectionism in myriad
ways. One
strident voice against this form of protectionism
is that of Prof Raghuram Rajan,
International
Monetary Fund’s new Chief Economist, who opposes
the practice, especially by the
developed
countries in the field of information technology.
Such arguments as ―Indian software
workers
come and work 6070 hours at half the wages we earn
is unfair, and they should be kept
out,‖ he
says, is plain protectionism.
In an
interview to , Prof Rajan, who is from the Chicago
Business School, rejects the
contention that
globalization has resulted in workers of
developing countries getting poorer wages.
―If
you force them (the workers) to have the same pay,
it is a form of protectionism. You are
essentially shutting them out of the world
market. These workers in India and China, who
compete
in the world market, are able to
thereby achieve a much better standard of living,‖
he says.
At the same time, he says the
―traditional‖ laissez faire model of ―no
regulation‖ does not work.
The clout of
existing players can nip challengers in the bud.
Writing in his Web site
, he says: ―If there
were no supervisory authority and regulations
enforcing safety standards, people will be
very reluctant to fly fledgling airlines and stick
with
established ones. Having no safety
regulations in the airline industry will favor
established firms
and make entry impossible,
therefore, killing competition.‖
Breaking from the traditional view that any
government regulation hinders free market
development, Prof Rajan suggests that
competitive markets are not well served by the
laissez faire
approach. On the other hand,
over-regulation can be harmful. ―If regulation
required every airline
to have a proven five-
year track record of profitable flying before
being allowed to accept
['miriəd]
ad
passengers, new entry
still will be killed. How can new entrants have a
proven record?‖
The best policy,
according to him, is that of middle ground where
the market is regulated such that
the benefits
of competition can be obtained, but its (the
market’s) tyranny contained.
What is
true for business is also true for governments.
Prof Rajan believes that competition in the
global markets will force all governments to
establish best business practices.
In
his article, ―Unleashing the power of financial
markets to create wealth and spread
opportunity,‖ he writes: ―By forcing different
political regimes to compete on common economic
turf, open borders are one of the most
important forces preventing governments from
pandering to
their domestic elites and
ignoring the large public. If Malaysian
manufacturers have to compete
with Thai
manufacturers in selling to common markets, they
cannot afford archaic,
anti-competitive
regulations in the Malaysian financial system for
that will make Malaysian
production costs
higher and put them at a competitive
disadvantage…The Cambridge school
believes in
the power of the government. But the natural
question is what keeps the government
working
in the interest of the public… The answer is
competition between governments.‖
His
basic idea, as expressed in his Web site, is:
―Instead of enhancing the power of large
corporations and domestic elites, free markets
actually curb that power and channel activities
into
more productive pursuits.‖
That
said there are some problems too. For instance, if
a domestic airline market has to be
regulated
for good result then the global market has to be
regulated too. That will require a
globally
elected government. But Prof Rajan seeks only free
trade in goods and capital while
maintaining
national boundaries and national governments.
Now, a national government cannot
possibly regulate a global market. The US Justice
Department
can break Microsoft but not the
Government of India. The implication is that the
unregulated
global market will favor the
established players.
Just as the absence
of supervisory authority will make people
reluctant to fly fledgling airlines, so
also
the absence of global regulatory authority will
make people reluctant to buy goods from the
newly emerging developed countries. The result
is that the present dominance of the developed
countries will be preserved.
But
Prof Rajan refused to acknowledge this. On
opposition to globalization because of the MNC
clout, he says in the rediff. com interview:
―There are arguments made about multinationals
destroying countries and so on. There is
always a grain of truth in these arguments. But if
you play
them all out–what they are suggesting
is often complete nonsense.‖ That may not be so.
As he
says, the absence of regulation will
strengthen the existing companies. So, an
unregulated global
market does favor the
existing MNCs. In the result, Prof Rajan provided
the justification for
opening the borders
while strengthening the clout of the developed
countries.
Mr. James Whittington,
reporting for the BBC, says, ―In recent years, the
IMF has been embroiled
in a global debate
about how effective policies of free trade and
market economics have been.
Critics have
become increasing vocal in promoting the view that
the Washington-based institution
has been
pushing advice and loans which benefit rich
countries more than the poorer ones.
Meanwhile, its supporters argue that the Fund
is misunderstood and its advice not followed
properly.‖
Prof Rajan was appointed,
Mr. Whittington says, because he argued that the
world’s business elite
wants to rig so-called
free markets in its favor to make the rich richer
and the poor poorer. But if
we look beneath
the sheen the opposite conclusion emerges. Prof
Rajan’s theory of opening the
markets without
putting in place a global regulator will benefit
the developed countries.