Trade protection and economic integration

Learning objectives

Analyse tariffs using diagrams, showing the effects on domestic producers, consumers, government revenue, foreign producers and welfare, and (HL) calculate these effects from data

Analyse import quotas, production subsidies and administrative barriers using diagrams and compare their effects on stakeholders

Explain the arguments for trade protection: infant industries, national security, health and safety standards, anti-dumping, protecting jobs, government revenue and correcting a current account deficit

Explain the arguments against trade protection: misallocation of resources, retaliation, higher prices and costs, less choice, reduced export competitiveness and weaker incentives for efficiency

Distinguish bilateral, regional and multilateral preferential trade agreements, compare free trade areas, customs unions, common markets and monetary unions, and outline the objectives and functions of the WTO

Evaluate the advantages and disadvantages of joining a trading bloc and (HL) explain trade creation and trade diversion

(HL) Evaluate the advantages and disadvantages of monetary union, weighing lower transaction costs, exchange rate certainty and price transparency against the loss of independent monetary and exchange rate policy and the fiscal constraints of membership