Protectionism Against International Competition

Protectionism is a policy adopted by some countries to protect domestic industries from global competitors by imposing some restrictions on trade of goods and services between countries. In this policy government of that particular country increases tariffs (import taxes), Quotas, Embargoes (a complete ban on imported goods), import licensing, subsidies, exchange controls etc to increase prices of imported products which make them expensive and less attractive. Countries using protectionism when they feel that their industries are getting damage from unfair global competition. In short-term, it work like a defensive measure but if it remains for long-term may ruin the industries trying to protect as less competitive on global marketplace.

Protectionism

Short-term protection allows the infant industry to progress its advantage at which point protection could be relaxed, leaving an industry to trade more freely on the international market.The protection of jobs in home-based industries and an upgrading in a state’s balance of payments.The one policy which has been debated to no ends and which has the greatest impact on our industrial global competitiveness is ‘Protectionism’ that protects domestic industries against foreign competition by means of tariffs, subsidies, import quotas and other restrictions. Protection is universal and found even in most developed regions of the world. Over the years Pakistan has moved on a right track, from a high of 65% duties in the mid-90 down to 25% today, on final

On one end it protects local industry from foreign competition, but on the other end it makes the local industry satisfied and ineffective. Usually any local industry that flourishes under protectionist policies is not capable to compete in the larger international market as it has no influential need to reduce cost, enhance efficiency or drive automation projects; company is protected by the government against foreign competition. Even in Pakistan auto manufacturers are holding their breath yet to be declared ‘automotive industry development policy phase-II’, which is in its final stages. With a new government on board, there are hopes that this policy would probably come up with different policy interventions relative to the auto policy 2009. The reason being the present government somewhat having an industrial background, has given release to auto manufacturers (at least to some), involving that this new policy would provide to their demands and