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Protectionism methods including: tariffs, subsidies, quotas, local contents rules and export incentives

Would would be the effects of a reduction of these methods, not complete free trade.

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    $\begingroup$ Would you be interested in an answer of the form "what would a once percent reduction in tariffs be expected to do to Australian GDP?" $\endgroup$
    – BKay
    Jan 26, 2015 at 14:26

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Normally protectionism is never the answer as it doesn´t help in anyway. If for example the subsidies for exportation were to be reduced you would see a drop in the price of items that are exported from autralia , i would place your question more in micro-economics then in macro. Not sure if that answered your question.

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    $\begingroup$ This is simplistic opinion, not a useful answer. To analyse this kind of problem properly the entire economy needs to be looked at carefully, and especially what is protected, and why. For example, the Opium Wars originated from trading protectionism by the Chinese, trying to stop the English importing opium. Other forms of protectionism can occur when dumping is occurring (products being deliberately sold at below market price to effect long term results). Whether it is good or bad depends very much on context, and not infrequently point of view. $\endgroup$
    – Lumi
    Jan 25, 2015 at 16:30
  • $\begingroup$ I can not think of a situation where protectionism is a plus for the society , if it's subsidies or tarifs in both cases the local price of the product is going up , the answer would be to taxe the production of a certain product. Correct me if I'm wrong I am not 100% sure of this. $\endgroup$ Jan 26, 2015 at 14:05
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    $\begingroup$ @Amroelaswar: While the empirical evidence is not strong, look into the concept of "immiserizing growth" in which freer trade can in theory make a country worse off. People have also argued that pollution and other negative externalities are taxed in country A but not B, cutting tariffs on imports from B can be welfare reducing. $\endgroup$
    – BKay
    Jan 26, 2015 at 14:24
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    $\begingroup$ Downvoted after reading the first sentence: Normally (...) never (...) as it doesn't help anyways. Sounds like arguments brought by a pundit on FOX, not a real economist. Furthermore the answer cites no paper or empirical evidence to bring forward the evidence. This is not how science works. $\endgroup$
    – FooBar
    Jan 26, 2015 at 20:29
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    $\begingroup$ There are so many situations in which pivot taxation is welfare improving I can't believe someone dares to answer this. $\endgroup$
    – FooBar
    Jan 26, 2015 at 20:30

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