International Trade & Globalisation · 4 question types
Past paper frequency (2018 to 2024)
This topic accounts for approximately 13% of your exam marks.
Comparative advantage, free trade benefits, and protectionist tools (tariff, quota, subsidy) appear regularly in Section B evaluate questions.
Most economists argue that the long-run costs of protectionism exceed the benefits.
Tariffs and quotas raise prices. Consumers pay more, and pay more for basic goods disproportionately; protectionism often hits low-income households hardest.
Quotas and embargoes physically limit what consumers can buy. Variety falls.
Shielded from competition, domestic firms have less incentive to control costs, innovate or improve quality. Productivity stagnates.
Protected industries draw capital, labour and entrepreneurship away from sectors where they would be more productive. The whole economy operates inside its production possibility frontier.
When one country imposes tariffs, trading partners often retaliate. Exports fall, jobs in export industries are lost. The original "protection" damages the very economy it was meant to help.
Free trade fuels growth through specialisation, scale, technology transfer, and competition. Protectionism slows all four.
Rich-country protectionism (especially on agriculture, textiles and basic manufacturing) hurts developing countries that rely on these exports. It blocks their main route out of poverty.