B ut in fact national production of the country often needs support because of the lack of effectiveness. Protectionalism limits the competition thus keeps the situation stable. B esides there are more effective ways in this situation as subsidies, reducing taxes for national manufacturers.
A nother argument is protection of young industries, which also can be presented as positive and negative effect. T his type of protection is considered to be temporal measure for supporting upcoming sectors which still have got high level of costs so they could solidify their positions. T hough this protection significantly decrease the level of stimulation of young industries suppressing their effectiveness, and transfer temporality of such protection into uncertain period of time. In addition subsidies and other benefits can stimulate young industries in more rapid time and can give better results. One more controversial argument highlights federal budget income increase. I.
n many cases state conducts protectionalism policy because of the need in additional income for deficiency payments. T his stands to be a popular argument in those countries where the normal tax system is in the colostrum stage and tax collection creates difficulties. I t is easier to collect custom duties then income tax.
H owever income payments to the budget depend on the elasticity of the import market and prices so in case of high elasticity federal incomes will increase under conditions of weakened protectionalism policy. Moreover protectionalism policies of different countries can lead to serious interstate contradictions and as a result negative consequences for all parties. F or example such market wars were a common practice for Japan and the USA and nowadays Japanese vehicles and electronics are cheaper and better quality then American. ConclusionAll presented arguments can be made for and against protectionalism but in general not a single one of them is convincing enough to support this policy without deep analysis. S ome countries still see their future implementing this policy and for some this is an element of previous decades in economy, but nowadays it is mostly agreed that free trade is an instrument for the new developments and an effective way to avoid economic wars led by restrictive tariffs, quotas, barriers. In conclusion despite all the problems that RTAs are facing in the modern world their number and impact are rising clearly. it is mostly believed that RTAs roles in reducing trade barriers changed living standards to a better extent, it continuously stimulates market situation and increase world output.
RTA s provide specific solutions to selected countries members in trade liberalization and other issues. T hey represent our changing economic world. R eferences1. G.
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