human
Write a summary relating to protectionist trade policy that is advantageous in that it encourages and facilitates the growth of new industries by protecting them from foreign competition, creates jobs for domestic workers, and stimulates country-level economic growth in the short-term period.
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The protectionist trade policy is advantageous in that it encourages and facilitates the growth of new industries by protecting them from foreign competition, creates jobs for domestic workers, and stimulates country-level economic growth in the short-term period. The free trade system is advantageous in that it (1) prevents market imperfections by reducing or eliminating tariffs, quotas, subsidies, and regulations (2) reduces consumer prices, (3) fosters economic growth by rewarding risk-taking behavior through enhanced sales.
human
Give me essay based on the summary above.
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#Protectionism and Free Trade System Essay
The available literature on global trade policies demonstrates that protectionism is the practice of countries to safeguard local industries and their labor force through the use of tariffs, quotas, subsidies, and other forms of administered protection intended to block or slow down the economic adjustments that otherwise would have to be made to deal with competing foreign products. This trade policy is different from the free trade system, which basically aims to achieve optimal production and consumption possibilities for citizens of all nations by dropping import barriers and tariffs, hence allowing foreign products and services to compete on a level playing ground with local products.
The protectionist trade policy is advantageous in that it encourages and facilitates the growth of new industries by protecting them from foreign competition, creates jobs for domestic workers, and stimulates country-level economic growth in the short-term period. On the other hand, the free trade system is advantageous in that it (1) prevents market imperfections by reducing or eliminating tariffs, quotas, subsidies, and regulations (2) reduces consumer prices, (3) fosters economic growth by rewarding risk-taking behavior through enhanced sales, profit margins and market share, (4) promotes innovation and competition, and (5) disseminates democratic values by ensuring that companies engaging in international trade abide by the terms of their contracts and other international obligations as suggested in the norms and values governing trade.
Lastly, the adoption of the free trade system is the best strategy for trade policy as it guarantees immense benefits for countries engaging in international trade. Specifically, this system provides a level playing ground for local products and services to compete with foreign products, hence not only availing customers with a broad range of choices but also ensuring that companies adopt innovative and efficient practices to remain competitive in the international arena. Additionally, unlike the protectionist system, the free trade system encourages economic freedom and fosters support for the rule of law.