Exporting Unemployment

Exporting unemployment in Global Commerce Policy

In this regard, a definition of this issue is as follows: the woolly idea that domestic economic activity can be raised, and employment thereby increased, if the flow of imports is stemmed in some way. The entries on trade policy are here. In other words, proponents of this idea hold that it is possible to transfer the unemployment burden to some other country and protect and increase employment at home through keeping imports at bay. Generally, the more acceptable term of import substitution is used for this practice. Such policies may work in the short term, but only at the expense of lower competitiveness of the domestic industry. Factors to consider in the imposition of import substitution policies are that many imported products are inputs into the production process. Raising their prices raises the costs of domestic producers. The entries on trade policy are here. Increased costs are a disincentive to purchasers, and this may lead to a dampening of economic activity. The aim of exporting unemployment can therefore lead to increased unemployment. See also beggar-thy-neighbour policies, local content rules and optimal-tariff argument.[1]

Exporting unemploymentin the wold Encyclopedia

For an introductory overview on international trade policy, see this entry.

Resources

Notes and References

1. Dictionary of Trade Policy, “Exporting unemployment” entry (OAS)

See Also