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This is closely aligned with anti-globalization, and contrasts with free trade, where no artificial barriers to entry are instituted.
Theory vs. Facts: Side Effects
The theoretical case for trade protection rests on market failures that can be corrected by government intervention.
Examples;
- If learning-by-doing is the key for success, a firm may become internationally competitive only if it acquires extensive experience in production. However, this would mean that the firm would lose a great deal of money while trying to achieve the said level of experience. Thus, government help might be necessary to give the firm a start...
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