High income countries have tariff policies that generally have
A. equal tariff rates and quotas for all imported items.
B. higher tariff and quota protection on high technology products that compete with domestic firms.
C. lower tariff and quota protection on products in agriculture, and clothing and textiles.
D. higher tariff and quota protection on products in agriculture, and clothing and textiles.
The correct answer and explanation is:
The correct answer is D. higher tariff and quota protection on products in agriculture, and clothing and textiles.
Explanation:
High-income countries often impose higher tariff and quota protections on agricultural products, clothing, and textiles. This is primarily due to several factors related to domestic economic interests and political considerations.
In the case of agriculture, many high-income countries have highly subsidized agricultural industries. These countries, such as those in the European Union or the United States, provide significant financial support to their farmers, which helps keep domestic food production prices low. To prevent foreign products from flooding their markets and undermining these subsidies, these countries often impose tariffs or quotas on agricultural imports. These tariffs or quotas make it more expensive for foreign producers to sell their products in high-income markets, giving domestic farmers a competitive advantage. Additionally, protecting the agricultural sector is often seen as a way to ensure national food security.
Similarly, clothing and textiles are typically subject to higher tariffs and quotas in high-income countries. The textile and garment industries are labor-intensive, and many high-income countries, such as the United States, have a strong interest in protecting domestic manufacturers from competition with low-cost labor markets in developing countries. Additionally, these sectors often face political pressure from labor unions, which advocate for protecting jobs in these industries. High tariffs and quotas on imported textiles and garments can shield domestic manufacturers from such competition, allowing them to maintain market share and keep production jobs in the country.
Thus, tariff and quota protection in these areas help safeguard the interests of domestic industries, ensuring their profitability and preventing market disruptions from international competition.