Why do China buy 80% of luxury goods abroad? http://www.wsj.com/articles/chinese-open-luxury-wallets-for-europe-1442261511

Why do countries protect? Protect infant industries Protect strategic industries e.g. EUs Common Agricultural Policy is to create food security for Europe by protecting its agricultural sector. Protect non-renewable resources Deter unfair competition Save jobs Help the environment Limit over-specialisation

Impact of protectionist policies Consumers Workers Producers Equality Governments Living standards

Protectionist Measures a) Tariffs b) Import quotas c) Other trade barriers: government legislation domestic subsidies

Tariffs Tariffs are a tax placed by the government on imports. They raise price for consumers, lead to a decline in imports, and can lead to retaliation by other countries.

Quotas A physical limit on the quantity of the good imported. Increases the share of the market available for domestic producers. But it does cause welfare loss…. http://www.japantoday.com/category/business/view/hope-fades-tpp-pact-could-end-japans-butter-shortage

Government Legislation Legislation can be used to stop firms from selling dangerous products

Subsidies Can be used to increase exports and reduce imports. Export subsidies to increase exports and support industries Subsidies to reduce imports – subsidising firms that compete with imports.

Discussion/Debate Is protectionism ever justified? Support your answer with the articles below and your own research into current political opinion. What are the necessary conditions for free trade? Margaret Thatcher’s view of protectionism. Is this still a valid political argument today? What are Donald Trump’s views? https://www.youtube.com/watch?v=2bljR7PFtw4 http://www.bbc.co.uk/news/election-us-2016-35836102 http://www.bbc.co.uk/news/business-18104024 https://www.youtube.com/watch?v=sLoL99lIJzU Does it depend on the economic climate?