Protectionism.docx

1. Motion to set the agenda sir 2. To second the motion. 3.

Agenda- Balance of trade. Honorable Delegates, Respected Chairs Theres’s a very famous saying in germany, If you’re not going forward, you’re going backward. And Trade protectionism is the way back.

Germany, the Montana-sized country of 82 million people was the world’s #1 exporter until 2008, surpassing the United States even today and only surpassed by China in 2009. Germany, like the U.S., is nominally a freetrading country. However, Germany quietly follows a tradition that goes back to the 19th-century German economist Friedrich List. a huge key to its trading success is a vast and half-hidden thicket of de facto non-tariff trade barriers. Germany’s covert trade barriers—should perhaps better be called “trade balancing measures,” as it would be a mistake to confuse them with crude protectionism — that begins with careful control over Germany’s currency. Another key policy: Germany does not use the credit system to subsidize short-term consumption as the U.S. does. For example, Germany has remarkably few credit cards per person. This tends to direct lendable money into investment, not consumption. This tends to favor balanced trade because investment strengthens industrial competitiveness, while consuming more than one produces necessarily means sourcing from abroad. Honourable delegates of the house we need to come to concensus to solve this issue and prevent trade war.

Germany wishes to be a country that lends its contribution in the future to solve the problems of the world together, we think that shutting ourselves off and isolating ourselves will not lead us into a good future. Protectionism is not the proper answer,

Above all, Germany has a 19 percent value-added tax (VAT) and the US doesn’t. So American goods entering Germany pay a border-adjustment tax, but German goods entering America don’t, a fact perfectly legal under WTO rules.

Point of Information! Request to follow up 1. Any Developing nation- Less globalisation is more worrysome than no globalisation. 2. UAE- Will UN compensate for the poor. 3. India- The US president Donald Trump described India as the “the tarrif king”. The country’s obseesion with protetcionism is resulting in the fall in rupees. Justify! Right to reply- on the grounds that the soverignity of Germany has been infrinched upon. Motion topic- to propose a unmoderated/moderated cocus topic you’re honour. 10 mins with each sepeaker 1 minute. DR- motion to move into an open debate to this resolution sir.

The European Union’s largest economy, whose export-oriented vigor has kept the continent afloat for more than a decade, is cooling more rapidly than expected in which can be seen as an early fallout from protectionist moves by the U.S. After years of robust growth fueled by foreign demand for premium cars and engineering goods, Germany saw its annualized growth rate roughly fall by half in the first quarter of 2018. Exports have fallen in three of the first four months of the year, manufacturing orders are down and sentiment indicators are in free fall.

Oliver Rakau, a Frankfurt-based economist with Oxford Economics. - “It’s clear that concerns over protectionism and the more assertive foreign-policy stance of the U.S. have begun to have real economic implications,

Germany is so dependent on international trade, economists argue, the protectionist war cries coming from the White House are having a chilling effect even in the absence of a fully fledged trade war, damping both sentiment and actual economic activity. The global automotive industry is a highly complex network of flows of goods, and such discussions are poison to our business.” No other country in the world would suffer higher absolute losses from U.S. car tariffs than Germany,” Mr. Trump’s trade rants are also making German consumers uneasy. I plead all my fellow nations to come into a consesus to file a WTO challenge against the US protectionist measures and plea for rebalancing duties on American exports. Solutions:

Trade policy alone cannot ensure that the potential benefits of liberalisation are fully realised or widely distributed. Governments should pursue broader policies that strengthen the economy’s resilience and the workforce’s adaptability to changes taking place in the global economy, many of which are driven by new technologies. It can serve to lessen the disruptive impacts of change and create an environment that spreads the benefits of globalisation more widely. They include education and training policies that aim to build solid foundation skills and enable participation in further training and reskilling for displaced workers; workforce policies that influence how readily firms can adjust the size and composition of their workforce; and macroeconomic stability. Governments should better engage with the community around the case for free trade, and about policies aimed at managing the costs of adjustment and ensuring the benefits of liberalisation are shared more widely. This would help to build community confidence in trade and foreign investment policies. Resisting protectionism and continuing to work towards freer markets, while making trade work for all by minimising adjustment costs and ensuring the benefits are widely shared, is the best path forward. Higher living standards depend on it.

We think that shutting ourselves off, isolating ourselves, will not lead us into a good future. Protectionism is not the answer," She also said Europe should not complain when other countries, like the United States, overhaul their tax systems but instead respond with reforms of its own.

Protectionism refers to government actions and policies that restrict or restrain international trade, often with the intent of protecting local businesses and jobs from foreign competition. Why free trade? 1. all benefit from free trade as consumers, because without it many products would be far more expensive. Apart from this, free trade benefits the companies and their employees which hold a strong market position in global competition, either because they produce very cheaply, or because they have a market niche. The losers are the owners and employees of companies that cannot keep up in the global market. -

Clemens Fuest, President of the Ifo Institute for Economic Research

2. Open markets are very beneficial to Germany as a competitive industrial nation. That is why the export surpluses are often criticized. Justifiably so? When Germany exports more than it imports, it means that other countries increase their debt with us or that we acquire assets, such as real estate or shares in companies. Rising debt can lead to over-indebtedness crises, less so the direct acquisition of assets abroad. Many people abroad would like to see their companies being utilized better and their products selling better. Whenever German products are more successful in the markets, it can easily cause aggravation. In the long run, German surpluses abroad can actually encourage protectionism, that’s why Germany should lower corporate taxes, for instance, in order to boost domestic investments. German political and business leaders reacted with alarm to the United States government’s decision to impose tariffs on European steel and aluminum imports from midnight Thursday. “The United States decision is fundamentally wrong and extremely dangerous. We are at risk of a protectionist spiral,” said Joachim Pfeiffer, economic spokesperson for the Christian Democratic Union (CDU), Angela Merkel’s center-right party. Achim Post, a spokesperson for the center-left Social Democrats, the CDU’s coalition partner, called the US move a “body blow for free and fair trade

Trade war The U.S. government's latest tariff plan on Chinese imports has raised concerns of various quarters of German society that the trade protectionist move will lead to "multiple losses." U.S. President Donald Trump on signed a memorandum that could impose tariffs on up to 60 billion U.S. dollars of imports from China and restrictions on Chinese investment in the

United States.German Economic Minister Peter Altmaier said he also believed that free and fair global trade is in the interest of all parties.

Through the trade war, Trump will only learn the basic common sense of foreign trade: the high costs caused by tariffs will ultimately be paid by U.S. companies and consumers

Disadvantages In the long term, trade protectionism weakens the industry. Without competition, companies within the industry have no need to innovate. Eventually, the domestic product will decline in quality and be more expensive than what foreign competitors produce. Job outsourcing is a result of declining U.S. competitiveness. Competition has declined from decades of the United States not investing in education. This is particularly true for hightech, engineering, and science. Increased trade opens new markets for businesses to sell their products. The Peterson Institute for International Economics estimates that ending all trade barriers would increase U.S. income by $500 billion. Increasing U.S. protectionism will further slow economic growth. It would cause more layoffs, not fewer. If the United States closes its borders, other countries will do the same. This could cause layoffs among the 12 million U.S. workers who owe their jobs to exports.

List of the Cons of Protectionism 1. It often raises prices instead of lowering them. Competition is typically what keeps prices down for consumers. When tariffs are implemented, foreign goods cost more. Companies don’t pay for the added taxes – the consumers do. Domestic companies often raise their prices to match the price increase of foreign goods to boost their profits. For consumers, even if they experience wage increases, they don’t gain anything because those increases are wiped out by higher prices. . It limits customer choice.

When free trade policies are allowed to flourish, consumers are presented with a wide range of goods and services from which to choose. Protectionism limits these choices because international goods may not be supplied to the local market. If they are supplied, then tariffs may price those goods or services out of the reach of the average consumer. That means consumers must often use inferior products or have access to them during specific time periods each year. 3. It only creates short-term gains. When one country announces tariffs on products, this practice is quickly followed by other nations following suit. That means the gains experienced domestically through protectionism are short-term at-best. Many companies may even find the cost of business to be too high for them with tariffs in place. Jobs that rely on exports are often lost when escalating tariffs occur. When one country closes its borders, many others follow suit. 4. It exposes educational deficiencies. Protectionism can also limit immigration and visa approvals. When this occur, service gaps begin the form in the economy. In the United States, many high-skill jobs are filled by immigrants. There are domestic shortages in the U.S. right now in several different sectors, including science and engineering, because there aren’t enough people educated in those disciplines locally. 5. It can lower the quality or quantity of products for consumers. One way to get around the issue of tariffs is to change the export product or service being provided. Offering fewer of the same product or lowering its overall quality can keep pricing at acceptable levels for the consumer. That means the only losers in this scenario are the consumers, who must either make-do with fewer items or settle for an inferior product compared to what they used to enjoy. 6. It may inspire warfare between nations. When protectionism occurs, it is often referred to as a “trade war.” Real wars are more likely to start because of protectionism as well because

there are fewer opportunities for different nations to help each other find success. Countries are far less likely to go to war with one another when their economies are dependent, in some way, on the products and services that are provided because of free trade.