Chapter Outline

33.1 Free Trade or Protection?

33.2 Methods of Protection

33.3 Current Trade Policy

AFTER STUDYING THIS CHAPTER YOU WILL BE ABLE TO

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 Learning Objectives (LO)

1. describe the various situations in which a country may rationally

choose to protect some industries.

2. discuss the most common invalid arguments in favour of

protection.

3. explain the effects of tariffs and quotas on the domestic economy.

4. understand why trade-remedy laws are sometimes just thinly

disguised protection.

5. distinguish between trade creation and trade diversion.