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Politics and International Business TTIP/TPP & the Challenge for Democracy

Contemporary US Business Society

The rise of democracy in the world after the collapse of Soviet Union that was championing for communism/socialism allowed interest groups and trade unions to demand better service in all social, political, and economic sectors. Countries are struggling to grow their economies by exporting some of their surplus products/services to other nations. Free trade policies facilitate business growth, but some countries impose protectionist policies in an attempt to protect their domestic markets from foreign competitors (Baldwin, 1989: 119). In the contemporary society, every country needs the other in one way or another, and thus, free trade policies are necessary. Interest groups champion for protectionism policies with the objective of getting rent from the producers and broader public advances such as quality improvement (Rönnbäck, 2015:281). However, they not only work to advance protectionism as such but they prefer a quota system that applies to some products.

In the globalized world, protectionism is not the best way to protect domestic industries. Manufacturers can advance their business by producing high-quality goods and services that are capable of competing at the world stage. In fact, countries can expand their market and cooperation with others by subsidizing domestic industries instead of introducing protectionism policies. In so doing, states must consider advice from economic experts and the concerns of the interest groups (Baldwin, 1989: 120). Through free trade policies, countries can specialize in manufacturing or service production in a field that it has the comparative advantage over others. Free trade policies encourage production of high standard products, the expansion of the market to foreign countries that in the end benefits the manufacturers as well as the consumers. However, preferential treatment ought to be given to the developing economies to enable them catch-up with the industrialized countries.


Baldwin, R. E. 1989. The political economy of trade policy. The Journal of Economic Perspectives, pp. 119-135.

Rönnbäck, K. 2015. Interest-group lobbying for free trade: An empirical case study of international trade policy formation. The Journal of International Trade & Economic Development, 24(2), pp. 281-293.

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