National Defense, Declining Industries and Infant Industry Arguments for Protecting a Domestic Industry from International Competition

Trade barriers lower the possible goods quantity which can be produced and consumed in an economy. Trade restriction protects the national defense and ensures sovereignty of a country. No country should depend on foreign producers to manufacture its defense products even if that they can manage to do this at a cheaper price. In this regard, restriction is highly required. In addition, restriction assists in protecting infant industries. Start-up industries in a nation might not be in a position to compete effectively against foreign goods from well established companies due to their size and low level of growth. In this regard restriction should be enforced to protect these industries from unhealthy competition from other foreign companies that are very experienced. When domestic companies attain a moderately advantage as compared to foreign firms, then based on economies of scale, this transitory protection will assist to attain improved economic efficiency (Wright, n.d.).

Declining companies are normally at almost the same fate as the infant industries, when subjected to stiff competition from foreign companies, these companies are highly likely to flop due to lack of strong financial ground to compete. In this regard, a country has a responsibility of protecting its own companies and industries by restricting international trade. By so doing, the declining companies will be able to continue being important to the market of a country and they will eventually manage recover. However, with the stiff competition, the company may never be able to overcome the market challenges to be able to reconstruct. In this regard, restriction is one of the measures a government can take to protect its young industries, declining companies and the national defense (Beggs, 2015).

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