The paper 'Government Trade Intervention" is a perfect example of marketing coursework. The government has several roles which it playa in the market. One of the roles it plays in the market includes the protection of the rights and freedoms of consumers. It also seeks the ensuring of the adherence to the law by the individuals and the parties to the trade. The government intervenes in the trade-off in the country for several reasons. The reasons for the intervention may be political, social or economic. Intervention in the trade is for three main purposes (Beard, 2003).
The first purpose is to continue improving the performance of the economy of a country. Another purpose for this is to eliminate market failure. This is through putting in place of such strategies to reduce the chances of market failure and assure development is achieved. Another reason for intervention in the market is to achieve equitable distribution of income and wealth among the citizens and other players in the market. The government has vast resources to its advantage. The use of such resources in the trade may turn out to be very beneficial to the government in the undertaking of its mandate to the citizens.
The government has power and oversees all trade activities that exist within its boundaries. As such, it may put in place strategies that may help reduce and eliminate the bad traits that maybe there in the market. This can be through putting in place restrictive measures or its entry in the market as a competitor. One of the reasons for intervention in trade is for national security reasons. This is especially so in the industries which deal with the manufacture of defence weapons.
The government does not feel secure for the defence input to be produced by other parties rather than itself (Peláez and Peláez, 2008). This is usually in order to prevent the chances of such weapons falling in the wrong hands. Through this, the government will be able to produce and use weapons safely. The benefit of reduction of the chances of such falling into the hands of criminals is that it increases national security. Since security is the mandate of the central government, it is able to undertake this role effectively. Another reason for government intervention in trade is the protection of infant industries.
The government protects them from excessive competition from other firms and international firms. Through this, it enters the markets through several means. First, it can offer subsidies to the firm that it is incubating. This will help increase its ability to survive in the market. It can also put in place such things as increasing the regulations for other firms to limit their presence in their country.
The governments often support infant industries if they see that there is potential for the infant industries to excel in their operations. This is where they foresee large external benefits from the growth of the infant industry. There may also be the prospect of better non-economic benefits that arise from the growth of the infant industry. This has the disadvantage in that it can result in prices of the goods and services rendered being high. This is due to the absence of competition. It creates fewer incentives for the improvement of the quality of the goods or services that are rendered.
The prices also due to the lack of competition are placed at a high level to the extent of consumer exploitation. Another disadvantage is that the government may make errors in the distinguishing of which industries to protect and which ones not to. This can make it to use resources of which returns will not be made.
Beard, G2003, Government intervention in trade, Manchester, Heywood Ltd.
Peláez, M& Peláez, A2008, Government intervention in globalization: Regulation, trade and devaluation wars, Basingstoke, England, Palgrave MacMillan
CTV Television Network, 1994, Trade barriers, Toronto, CTV Program & Archive Sales
Michalos, A2008, Trade barriers to the public good: Free trade and environmental protection, Montreal, McGill-Queen's University Press
Trebilcock, J& Eliason, A2013, The regulation of international trade, Abingdon, Oxon, Routledge.
Thies, A2013, International trade disputes and EU liability, London, Rutle