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Question 3 Briefly discuss 3 major arguments in support of protectionism (arguments against trade). Question 4 Explain whats
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1.

The three major arguments in favor of protectionism are:

  • Infant industries argument (since new and infant industries are unable to stand international competition and need protection in order to encourage domestic entrepreneural talent)
  • Strategic industry argument (protectionism is also needed to protect employment in strategic and important industries for eg. Food and defence equipment)
  • Protection against dumping (in order to protect domestic industries from dumping activities of foreign countries where in they sell their products at prices below cost of production)

These are the major 3 arguments for which countries fight for protectionism.

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