Protectionism of Trade Business:

Trade protectionism is basically a rules and regulations of a government to maintain or to make a

limitation on the import of goods and services to protect/promote domestic product and also to

create new jobs. Basically Protectionism is the economic policy of government to save our

domestic product and industry by imposing tariffs on imported goods, restrictive quotas, and also

variety of other government regulations to prevent foreign product not to take -over of

domestic markets Here the government gives an instructions and objectives on which product

can be imported in the country and which products cannot be imported from the other part of the

nations. Domestic products mean the products, which is made in own industries. These are the

industries face tremendous pressure to maintain competitive market prices of their products with

foreign goods. That is why government uses trade protectionism to develop the domestic

products and also helps the domestic product industries to compete in global market.

Protectionism of Bangladeshi Trade Business:

Bangladesh is a developing country and it is also known as a “third world country”. Bangladesh

is been participating in the global trade business for a long time. After the independence in 1971,

Bangladesh gets involved in the global business. That means Bangladesh have the capability of

import and exporting goods to the other nation of the world. In the field of export and import,

Bangladesh had been dealing with various nations on export and importing goods and services

for a long time. After a long research and analysis on “Bangladesh export processing zone” and

other export import foreign dealer, we had figured out that the Trade Protectionism will increase

the country’s job facilities and also save the companies. It also raises our economic condition. As

Bangladesh is a poor country, the trade protectionism is very much important to us. The

government in Bangladesh cannot provide enough foods and other resources to the people. That

is why; the country has to import food to the other country every year. For this reason our

economy condition is in a very bad shape. Even we have to owe money from the other nations to

fulfill our crisis. Because our industry is not developed for the lack of technology and skilled

manpower, we also cannot decrease our country’s debts. That is why, day by day the country’s

importing product rate is been increasing in a massive way. If the trade protectionism can be

applied in our export import system, then this import rate will be decrease soon. If the trade

protectionism theory is applied by the government, our domestic products may survive and also

later on they will have the capability to compete in the global market. If the government raises

the imported product expense or tariff then the country’s people will be dependent on the

domestic products and later on people will lose interest on the foreign products. This process is

known as “charging a tariff”. The main role of protectionism is to increase the export rate rather

than the import rate. In this process, the country’s own industries will be developed because if

the foreign products are being reduced from the country, the domestic products are on the top

priority. That is why; the home industries will take a lot initiative to expand the domestic product

and services. For fulfilling the need of the customer, these industries will create newer and newer

forms of products and services with advanced technology and skilled manpower. The home

industries will increase rapidly in the country and so the employment facilities will be expanded.

The people will be very skilled because of the industrial advancement and taking initiative of

making newer and newer forms of products and services. In this way we can fulfill our country’s

needs and also can export goods and services to the other nations to raise our economic

condition. Bangladesh’s debt to the other country is very high, so to reduce such condition the

trade protectionism is the best way to solve such kind of situation. Bangladesh needs to increase

the export process with the products and goods on which the country is good at producing. For

example Bangladesh is an agricultural country. That is why Bangladesh now gains a lot of profit

in exporting potatoes, onion and other agricultural products. In this way, we need to find out

more ways to increase the exporting system rather than importing. There is an example of our

soap industry. Our country is very much developed in soap industry. Though we are very good

and advance in this field, still the foreign countries soaps are imported in our country which is

totaling unnecessary. These industries are succeeded to fulfill the need of the people. But still,

for some reason, foreign soaps are imported in our country.

Trade Dimention:

Bangladesh launched a deep and wide-ranging trade reform strategy in the early 1990s. This

included substantial reduction and rationalization of tariffs, removal of quantitative restrictions,

move from multiple to a unified exchange rate system, convertible current account and an overall

outward orientation of trade policy regime. As a result, the country’s trade integration, measured

by the trade-GDP ratio, rose from 18% in 1990 to 43% in 2008.

Despite apprehensions that Bangladesh might lose out to exporters from China and India

following the phase-out of the MFA quotas, its share in global apparel and textile exports has

remained stable and export volumes have continued their robust growth. The country’s main

markets are the EU and the United States and its imports are dominated in general by machinery

and textiles, with China and India being the most important sources of imports. Bangladesh also

has substantial unrecorded trade with its neighbor India. Labor exports are also important, with

remittance inflows at about 9% of GDP.

The role of private sector driven export growth and diversification has been emphasized in

Bangladesh’s PRSP, making export-led growth a key thrust of its poverty reduction and growth

strategies.

Advantage of Trade Protectionism:

Trade protectionism enables countries to specialize in the production of those

commodities in which they have a comparative advancement.

Trade protectionism improves the efficiency of resource allocation.

Increased competition promotes innovative production methods

The increased competition ensures goods and services, as well as inputs, is supplied at the

lowest prices.

The use of new technology, marketing and distribution methods.

employment facility will increase in the country

Country’s manpower will be skilled.

Productivity grows when countries produce goods and services.

Inflation does not hamper economic growth.

Firms stay competitively challenged.

Trade protectionism can protect the development of their industry.

Reduce the unemployment rate.

It protects infant industries; restrict damping of useful commodities, source of foreign

currency.

Trade Protectionism protect the importation of harmful commodities

Disadvantage of Trade Protectionism:

The customers are not able to get the competitive prices. Instead they would have to buy

what the home industry is producing.

Quality of products suffers as there is no competition.

Home industry gets extremely non-competitive.

Trade protectionism is a great barrier for companies that are willing to expand to other

countries and are stopped due to these barriers.

Higher raw material costs for domestic firms

Threats of retaliation in the form of Trade Embargoes or other Tariffs.

home country’s technology may be stole by the other nations

Domestic workers may lose their jobs for increased imports pr shifts.

Workers in high wage countries may be forced to accept pay cuts.

Domestic countries may lose their competitive advantage.

Limits the market.

The consumers will be denied an easy access to high quality products.

Threats of retaliation in the form of Trade Embargoes or other Tariffs.

Higher raw material costs for domestic firms

Smuggling and other unfair means tend to get boost as people like smuggled better

quality products

Trade protectionism is a great barrier for companies that are willing to expand to other

countries and are stopped due to these barriers.

Quality of products suffers as there is no competition.

Conclusion:

Here what the government can do is to increase the tariff or the tax on this product and utilize the

tariff by giving a package loan to other domestic industries. By doing is on every sector of

business our country will be self established if the government use the theory of trade

protectionism. Because in this system, it says to be self dependent of what the country is good in

producing goods and services and increase the currency rate of a country by exporting the

products and goods all over the world. So in our opinion, to develop the country’s economy and

to expand the global business, we must say that trade protectionism is the only way to save the

Bangladeshi jobs, the home companies and to decrease the debts in our country

Reference:

http://www.blurtit.com/q876266.html

http://seekingalpha.com/article/161564-trade-protectionism-benefits-no-one

http://useconomy.about.com/od/glossary/g/Trade-Protectionism.htm

http://online.wsj.com/news/articles/SB1000142412788732476700457849086173669547

http://archive.thedailystar.net/newDesign/news-details.php?nid=82343

http://www.oecd.org/trade/protectionism-thecaseagainst.htm