Protecilasim

Consequences of Protectionism

The high tariff imposed by government to protect the local industry will push up the price of the products and Insulate inefficient sectors from competition. It often the higher price caused by the tariffs will have most serious impact to the lower income peoples, because the tariffs fall on necessity goods, which they spend most of their income into its category. Thus the import protection will caused the inequalities in the distribution in the distribution of income making the allocation of scare resources less equitable. Besides the firms that are protected from competition , they have less incentive to improved their technology and enhanced the product quality, because even their quality is not worth for the price they still can sell in large volume and make lot of profit because they able to sell at low prices than other similar products and have subsidiary and protectionism of the government . For example "National autos", those produced by Malaysian producers such as Proton and Perodua, benefit from preferential treatment compared to "non-national" autos. Although government protection is good for the domestic market, but on the other hand it’s not good for the domestic consumers because we cannot have the oppounity to consume the quality commoditys with lower price like the imported automobiles such as Toyota and Honda because of the high levying on the tariffs and forced to choose the inferior autos such as proton. This is unfair for the Malaysian because the equality of the right the consume the quality goods with the reasonable prices is eliminated by the government , for example Toyota Vios is sold in Malaysia at between RM70,000 and RM90,000. In Thailand, it is sold for about RM50,000 to RM70,000. In China, is sold for about RM45,000 to RM60,000. Same goes for the Honda City. In Malaysia, it is sold for about RM90,000 but in China it is about RM50,000.

Another issue for the Protectionism for the national cars is...