Overig/Old exam

4 important questions on Overig/Old exam

Compared to an import quota, an (equivalent) tariff may provide a less certain protection for domestic producers since

Foreign firms may absorb the tariff offering by offering exports at lower prices

The infant industry argument was an important theoretical basis for

import-substituting industrialization.

A problem encountered when implementing the infant industry argument for protection is that

The industry may never mature, Most industries also require tariff protection after they have matured and The infant industry protection may worsen the current account balance.
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Labor standars in trade are typically opposed by most developing countries, who believe that they will be used

as a protectionist tool by import-competing producers in industrial countries.

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