International Investment And Trade Foreign Policy Goals...

In regards to international investment and trade, a government’s political proposals are deeply in conflict with its economic arguments (Heuet, 2015) despite both being implemented with the focal objective to improve a country’s market efficiency and competitiveness. Despite the concern and view that government intervention results in protecting the interests’ of producers at the expense of consumer interests, it is imperative to recognise that imposed trade barriers, such as tariffs, taxes and quotas, occur to simply benefit the whole of a nation. While it may appear at times that consumer interests are being overlooked, without governments enforcing these protectionist policies, developed countries would not have acquired today’s†¦show more content†¦In terms of national security, governments impose restrictions when defence-related industries, for example weapons and aerospace, are involved as one of their aims is to guard their respective nati ons. Furthering foreign policy objectives is also a key political reason. This refers to preferential treatment granted to those countries that a government wants strong relations to be built with while enabling the punishment of those who misbehave. For example, during the Afghan war, Pakistan was rewarded when it provided its airbase to the US whereas the likes of Iran and North Korea were listed by USA as unfavourable nations (Dawn, 2012). Lastly, given that governments have a duty to protect its consumers, many have prohibited the importation of harmful and unsafe products, such as marijuana and children’s toys. In addition to political reasons, governments also intervene in investment and trade to maintain or enhance their economic positions. Countries’ leaders find it essential and rightly so, to offer protection to new and emerging industries, referred to as infant industries, from stern competition until they possess a comparative advantage to be capable of competing efficiently in international markets. The other economic reason for intervention is based on the strategic trade policy, which states that a government should assist domestic firms to attain first-mover advantages and also