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Unformatted text preview: 1. Political Economy of Protection: Political interactions that rule protection of certain party from being hurt economically. Politicians are often lobbied by local producers to apply protection on domestic production. Protection mainly benefits local producers; with protection, local producers will receive large gains while hurting local consumers. From the customer point of view, the impact is relatively small to nearly negligible and it doesnt worth their time and resources to fight for something that is nearly negligible. Protection proposals are frequently approved by politicians due to high demand and little opposition. Certain industries are being hurt by international trade due to their incompetent competition at international market. If these struggling industries are given a form of protection, it means giving them enough time and resources to get back on the competition....
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- Spring '07