Import Protection (International Trade) – GCSE Business Studies Revision

Income Differences

  • The world’s income isn’t distributed evenly – some countries have much higher incomes than others
  • Developed countries are those with high incomes
  • Low to middle-income countries are called developing countries
  • Developing countries often have no minimum wage
  • Businesses from developed countries take advantage of this and see developing countries as a source of cheap imports

Import Protection and Export Subsidy

  • Governments in developing countries want to decrease imports and increase exports, to help the national economy
  • An export subsidy is paid by the government to a business when it makes a successful export
  • This is designed to encourage businesses to export more, and make it cheap to do so
  • Import protection laws are designed to stop countries importing too much
  • Customs duties and tariffs are taxes businesses have to pay when importing goods
  • Quotas are limits on the amount of items that can be imported from one country
  • An example of a quota is “only 7000 baguettes can be imported to the UK from France, per month”
  • You can get around quotas by sending the goods via another country – shipping the baguettes from France to Ireland, then to the UK… (BUT you don’t have to, because France and the UK are both in the European Union, so there are no trade restrictions – revise the EU)
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About Matt

I like writing, filmmaking, programming and gaming, and prefer creating media to consuming it. On the topic of consumption, I'm also a big fan of eating.
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