Nowadays, in the modern world, most countries have allowed the free trade to reduce barriers for trading across international borders. However, I think that if governments want boosting economic growth, they should protect their domestic industries and employments, both views will be elaborated on here.
On the one hand, tariffs are commonly used to protect early stage domestic companies and industries from international competition. It means that there are economies of small scale, and they cannot compete with those of large scale production especially from developed countries. For example, the Free Trade Agreement between United States and Colombia in 2011 brought negative effects on Colombia, especially for small farmers. The minister of agriculture said that “if agricultural producers had the required technology, they could become internationally competitive”.
On the other hand, taxes on imported goods and services help to save domestic employment opportunities. For example, if Colombia had not imposed tariffs on US potato, Colombian potato producers might be at a competitive price disadvantage. Labor costs in the US potato market are far less than the Colombian ones. Therefore, charges helped to eliminate their price advantage over Colombian food. Moreover, this made that thousands of famers and employees could not be laid off.
To sum up, tariffs on imported markets might benefit small scale producers if the governments protect the new and growing industries, particularly in less developed countries. It encourages consumption of domestic goods and discourages consumption of imports due to the fact they will have high prices.
Nowadays, in the modern world, most countries have
allowed
the free trade to
reduce
barriers for trading across international borders.
However
, I
think
that if
governments
want
boosting
economic growth, they should protect their
domestic
industries and employments, both views will
be elaborated
on here.
On the one hand, tariffs are
commonly
used
to protect early stage
domestic
companies
and industries from international competition. It means that there are economies of
small
scale, and they cannot compete with those of large scale production
especially
from
developed countries
.
For example
, the Free Trade Agreement
between United States
and Colombia in 2011 brought
negative
effects on Colombia,
especially
for
small
farmers. The minister of agriculture said that “if agricultural producers had the required technology, they could become
internationally
competitive”.
On the other hand
, taxes on imported
goods
and services
help
to save
domestic
employment opportunities.
For example
, if Colombia had not imposed tariffs on US potato, Colombian potato producers might be at a competitive price disadvantage. Labor costs in the US potato market are far less than the Colombian ones.
Therefore
, charges
helped
to eliminate their price advantage over Colombian food.
Moreover
, this made that thousands of
famers
and employees could not
be laid
off.
To sum up, tariffs on imported markets might benefit
small
scale producers if the
governments
protect the new and growing industries,
particularly
in less
developed countries
. It encourages consumption of
domestic
goods
and discourages consumption of imports due to the fact they will have high prices.