Analyse the impact of protectionist policies on the domestic and global economies

Free Trade occurs when there are no artificial barriers between nations imposed by governments in order to restrict trade. When barriers such as protectionist policies exist, free trade becomes restricted. Protection is essentially defined as any action by national governments that will give an artificial competitive advantage to domestic producers over foreign producers. National governments will aim to protect or shelter their nation from the disadvantages of free trade, through protectionist policies in the form …

…to buy goods and services from them, they may as a result, suffer unemployment. With the adoption of preferential trading agreements, countries have increased barriers to trade with other countries. For non-member countries, this is a disadvantage as it may result in low incomes and a loss of demand for their exports. Member countries by contrast, gain access to foreign demand markets while restricting competition from non-member countries, hence also resulting in increased global in