ECO610 Discussion 1 Week 3 Controversies in Trade Policies

Because doing so would have made these sectors less competitive, there should not be a policy to promote them because it should be avoided. Injecting expenses while protecting these enterprises would diminish their capacity for creative and competitive development, making this strategy an unattractive choice for government investment. Because of this, it is reasonable to assume that doing so would diminish their capabilities of conducting business effectively because they would be funded without having the necessary edge since the government guarantees their existence.

 This can be assumed because of the following: Strategic trade strategy amplifies the impact of government policies on a specific sector, reducing the industry’s overall performance. On the other side, it fosters laxity since enterprises are protected. Consequently, they may not create cost-efficient technology s and innovations to lower costs hence being a lousy alternative for capital allocation. Last but not least, this approach inhibits foreign investments since investments in global markets may be made from any nation.