Economics

Protectionism is an economic policy which the government uses to regulate imports to a country. The methods used in protectionism are tariffs, restrictive quotas and other mechanisms. The main aim of protectionism is to protect the domestic market from foreign competition. Free trade is discouraged by many countries since it creates intense competition to the domestic markets.

Gains from Trade are the benefits that nations derive from engaging in international trade. Trade between two or more countries is beneficial and countries have adopted the system of international trade to benefit from the global trade. Countries can produce commodities according to the comparative advantage. This has led to specialization by many countries. Prices in the international trade are regulated by forces of supply and demand. The competition in the international trade forces the firms to offer quality commodities in the market and prevents monopoly of some firms.

Globalization has been brought about by the issue of international trade. International markets create specialization of countries and provides a variety of commodities in the market for customers to buy .

Balance of trade deficits occur when the value of imports exceeds that of the exports. The country pays more for the imports than it receives for the exports. Balance of trade surpluses occur when the value of exports exceeds the value of imports. The country gains from trade since it receives more money from selling its products abroad than the cost of importing commodities from other countries .

Conclusion
International trade benefits countries and promotes globalization. Countries need to practice some amount of protectionism to hinder competition from international companies. For a country to benefit from trade, the exports should exceed the imports bay value.