Justification of Intervention in International Trade

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Intervening in International Trade: Political Arguments

Despite the fact that free trade is highly encouraged among countries, several nations still find the need for intervening in trade citing political arguments for their actions. In most cases, these political actions are justifiable as they are meant to ensure that the said country is placed in a profitable position when engaging in trade with other countries. However, there is some political basis of intervention that is meant to sustain a country’s benefits in international trade while others are used to undermine the weaker party in the country. In most cases, countries form blocks via which they set certain operations patterns to ensure that all the parties involved gain substantively by engaging in trade with other countries. All in all, intervening in international trade is fundamental for all governments so as to ensure that the country is not short-changed by other countries seeking to benefit from the trade by misusing others. Some of the key political arguments that countries use to intervene in international trade include to protect jobs, preserve national security, protecting their citizens supporting foreign policy objectives gain influence as well as respond to unfair trade. Depending on the arguments surrounding these political reasons, one can determine whether they are justifiable means of intervening with free international trade.

Protecting Jobs

One of the key political arguments that different countries have cited for intervening in trade is to protect jobs. In most cases, developed countries feel that they are bound to lose jobs and industries to developing countries especially since the developing countries are able to provide low priced labor. As a result, a political argument that seeks to retain the jobs in the home country can be justifiable given that it is the role of the government to ensure that it creates and maintains jobs for its citizens. For example, in its attempt to protect the steel industry and its workers in 2002, the U.S. president, George Bush, introduced a tariff on steel imports which made imported steel more expensive compared to locally produced steel thus encouraging customers in the country to buy from local producers (York, 2018, p. 1). At the same time, the government was able to protect the local industry from foreign dumping after free trade had exposed the country to cheap steal which was to kill the local industry. One can argue that the motivations of the U.S. were justified given that it resulted in the creation of jobs among steel producers as well as an increase in their sales volume. However, given that the price of steel rose by up to 50 percent as a result of the tariff, one could also argue out that the consumer lost as he had to pay more for similar products from a local producer (York, 2018, p. 1). However, the government could argue that the losses to steel consumers were outweighed by the gains and therefore at the end of the day, jobs were protected at a cost. While citing job protection as a reason for intervention, it is therefore important to consider the efficiency of the move so as to ensure that one party does not end up suffering while the other wins.

Preserving National Security

Another key political argument that countries cite for intervening in trade is to preserve their national security. Each nation is bound to protect some of its industries as a way of guarding its national security. For instance, countries guard strategic minerals, for example, exotic ores used in jet aircraft, weapons, advanced electronics, aerospace, and semiconductors (Lake, 2018, p. 63). Countries protect this kind of industries to ensure that there are available at specific times to enhance their national security. Some countries even stockpile such resources at times when there is peace as they do not want to fuel a state of instability in other parts of the world. As a reason for intervening with trade, preserving national security is a justifiable course of action although most people can argue that as different countries engage in the same form of intervention, they will hold their own tools of maintaining national security which means that none of the players will win. Protagonists of this move argue that nations must be self-reliant and ready to pay for inefficiency in a case that relates to national security. In the recent times, the Pentagon has pushed for development of flat-panel industry despite the fact that such a move stands to bring much cheaper from Asian countries as it understands that in today’s world, there is no country that can term itself as being fully-reliant (Barfield, 2014, p. 22). All in all, the fact that a flat-panel industry will improve the national security of the U.S. means that it is a justifiable cause of action when it comes to intervening in trade.

Supporting Foreign Policy Objectives

Countries also cite the support of their foreign policy objectives as a political argument for intervening in trade. In such situations, governments grant preferential trade terms to other nations that they intend to create strong relations with while isolating or punishing other nations with which they have poor relations with. For example, given Cuba communistic stance, the U.S. government has continually imposed sanctions against the government of Cuba as it looks to increase economic hardship in Cuba in an effort to force a fall in the government (Renwick, Lee, and McBride, 2016, P. 7). While Cuba has been relentless and has always had support from countries from the Eastern Block, the foreign policy efforts by the U.S. have unsuccessful. At times, the developed countries come together to instil trade sanctions against a rebellious country as they look to push it to agree to certain foreign policy objectives. The U.S. government has also imposed sanctions to the Iranian government as it hopes that these sanctions will dent the production of nuclear weapons in the country (Renwick, Lee, and McBride, 2016, P. 11). The issue of nuclear weapons has been rampant in the last two decades, and the developed countries have come up with ways of ensuring that they can maintain the world peace by placing trade sanctions against countries like Iran. In such a case one can argue that the move is justifiable since it helps in enhancing the common good of people in the country as well as everybody in the whole universe. It is the role of the government to create the best way of protecting both its people’s peace as well as the peace of its close associates. Competitiveness in the global markets is key to every country taking part in the trade and therefore any factor that played a role in countering competition, for example, increased warfare and instability will no doubt gain full attention from the policymakers. Based on this argument, a factor like the ongoing crisis in Syria requires full attention among the key players in the global market (Seeberg, 2015, p. 21). By placing sanctions on exports of chemicals and other important factors going into Syria, a body like the European Union will eventually influence the Syrian government and force it to be corporate with the rest of the world for it to survive (Seeberg, 2015, p. 23). Such a scenario shows how intervention can be key in achieving foreign policy objectives and therefore it is justifiable as the world seek to maintain a peaceful global community.

Responding to Unfair Trade

Countries also cite dealing with unfair trade and competition as a key reason for their intervening actions as they look to force other countries to ‘play by the rules.’ Some countries may decide to take advantage of other players in the market for profits gains by engaging in unfair trade activities that may end up costing other players in the same market. For example, there was a time that China exported replica products to different markets including the U.S. and Europe, and as a result, it denied the real creators of the products such as Microsoft and Apple, the revenue they would have gotten from the sales (Lake, 2018, p. 42). While China sold the products at low prices, the U.S. argued that it had broken the copyright and patent laws by failing to regulate the production of replica products among its industries and therefore it threatened to put sanctions against China to ensure that the latter country played by the rules. As a result, China enforced the U.S. intellectual property laws as it would have lost more from the imposition of the sanctions in terms of revenues from the products it exports to the U.S (Lake, 2018, p. 49). While the move is clearly justifiable, it is important to note that China would also have imposed trade barriers of its own as a counter move which means that both nations would have ended up enduring losses. It is important to consider different players when imposing sanctions as such a move may end up hurting more than helping. All in all, irrespective of whether such a move is successful, one can argue that it was ultimately valid as it ended up protecting domestic firms from unfair trade or competition championed by another country. Companies invest a lot in coming up with original ideas for creating goods and therefore by unfairly copying such ideas, a legal form of intervention must be effected to protect the original owner of the idea from lost revenues as its market might end up being confiscated. One can also argue that intervention in the shape of retaliation comes in handy in creating a better, competitive and fair global economy (Lake, 2018, p. 72).

Protecting Consumers

A country may also intervene in trade as a way of protecting its consumers from exploitation by foreign producers. There are times when the imported products are substandard or unfit for human consumption forcing the government to put the necessary measures to ensure that such activities are prohibited. An example is the 2013 horse meat scandal in France where some products labelled as containing beef were found to be containing horse meat thus risking the lives of the consumers in the country who bought the products believing that they were actually buying beef and ended up consuming horse meat (Brooks et al., 2017, p.5). As a result, the French government threatened to impose sanctions on imports from China and labelled the behavior unacceptable and dangerous to consumers in the country. The South Korea government also banned the importation of beef products from America after the discovery of a Mad Cow disease as it looked to protect consumers in the country from being exposed to dangerous meat (Lee, 2018, p. 41). Such a move can be termed as justifiable as the government has the liberty of placing the necessary actions to ensure that its citizens are not exposed to dangerous products that could have a negative effect on them once they are consumed (Lake, 2018, p. 42). A government can also make such a move to calm its people irrespective of whether such an issue is bound to occur again or not and to ensure that it is on the lookout to protect their lives using every means possible. Before making an intervention, a country must ensure that it has a strong basis for the intervention by reviewing all the necessary implications of such a move both in the long run and in the short run.

As seen above, some of the key political arguments that a government can put across for intervening in trade include protecting jobs, preserving national security, protecting their citizens and consumers, supporting foreign policy objectives to gain influence as well as responding to unfair trade. However, every time that a government is putting a certain intervention in place, it has to ensure that the intervention is justifiable and that it serves the intended purpose without coming back to hurt it or the people. At the same time, some governments tend to intervene to ensure that they get political longevity as opposed to ensuring the best outcomes to the stakeholders who should not be the intention of an intervention. Governments are elected for the sole purpose of protecting their people, and in case the people are at risk due to trade factors, it is important that any necessary measure that will improve the situation and benefit the people is considered within a short time.

References

Barfield, C., 2014. Flat panel displays A second look — issues in Science and Technology, 11(2), pp.21-25.

Brooks, S., Elliott, C.T., Spence, M., Walsh, C. and Dean, M., 2017. Four years post-horsegate: an update of measures and actions put in place following the horsemeat incident of 2013. npj Science of Food, 1(1), p.5.

Lake, D.A., 2018. Power, protection, and free trade: International sources of US commercial strategy, 1887–1939. Cornell University Press.

Lee, S.W., 2018. Mad Cow Madness: The US Beef Protests in South Korea in 2008. Hemispheres, 41.

Renwick, D., Lee, B. and McBride, J., 2016. US-Cuba Relations. Council on Foreign Affairs, 7.

Seeberg, P., 2015. The EU and the Syrian Crisis: The Use of Sanctions and the Regime's Strategy for Survival. Mediterranean Politics, 20(1), pp.18-35.

York, E. 2018. Lessons from the 2002 Bush Steel Tariffs. Tax Foundation. Retrieved from https://taxfoundation.org/lessons-2002-bush-steel-tariffs/

October 24, 2023
Category:

Business Economics

Subcategory:

Industry

Subject area:

Trade International Trade

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