In general, the paper "Political and Economic Motive of Governments Intervention in Trade" is a good example of business coursework. The absence of government in trade creates conditions for free trade. However, governments since time immemorial have been known to impose trade barriers (Neary, 1991). The basic question arises as to why governments intervene in trade and what are the motives behind governments’ interventions in trade? There are three basic reasons as to why governments intervene in trade among them political, cultural and economic motives or the collective combination of the three motives.
However, among the most important of the reasons for governments’ intervention in trade is when a government intervenes when the economy of a country is experiencing harsh economic times (Brander & Spencer, 1987). The political motive of Government Intervention in Trade Governments all over the world have a record of making decisions in trade which are based on political and personal motives of the government. This is primarily because the survival of key politicians and governments in a country’ s politics largely depends on the politicians making decisions that are pleasing to the voters in seeking election or re – election in office (Brander & Spencer, 1985). National security Governments intervene in trade to ensure that there is national security through the protection of industries that are deemed vital to the security of the country, for instance, industries that deal with the defence of a county.
Taking a closer example, South Africa has a defence industry which was built with the aim of avoiding impositions of embargoes by other countries (Paul, 1999). South Africa, therefore become an exporter of arms to other countries. In addition, governments must have full control of the imports and exports of commodities that are considered vital to the security of the country.
For instance, a government that exports arms like South Africa to other countries must have full knowledge of the activities of the importation and exportation of the commodity in such a way that in case of a war emergency, the government is aware of its supplies of arms. Not only arms are considered vital in protecting national security, but other governments may also consider agricultural products for food security purposes as commodities vital to national security and hence seek to protect these commodities (Holcombe, 2005). Governments can also ban the importation and exportation of defence commodities from and to other countries for security purposes.
For instance, some technologies are deemed as security threats to be imported or exported to other countries. Response to Unfairness in Trade Unless trading partners come to trade concessions regarding fair trade, governments will always seek to respond to unfair trade practices by a nation. For instance, if a nation has imposed trade tariffs on another, the other nation may decide not to allow free trade between the nations in order to be at par with the country which is playing unfairly.
In so doing, a government that responds to unfair trade through imposing of trade tariffs to another country is said to retaliate through the use of trade barriers to make or gain better deals of trade with that country.
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