Table of ContentsIntroductionTrade Protection and Improving Economic WelfareConclusionIntroductionThe purpose of trade protection is to protect domestic businesses from foreign competition, allowing thus enabling these companies to gain efficiency and effectiveness in their production processes. Protection is more vital in developing countries where nascent/new businesses are allowed to grow and expand their economic scale adequately to meet foreign competition when trade barriers are removed (Baumol, 2012). Policies are set by governments that favor internal businesses and are restrictive for foreign markets. The benefits of trade protection are based on improving the economic well-being of the state. For example, through the protection of internal trade, the security of agricultural products is enhanced, which positively improves the economic well-being of a nation. However, unprotected trade leads to the creation of wealth for societies, beyond the fact that it helps to lift masses of the population out of poverty (Brewer, 1993). This essay examines why governments protect their domestic businesses, the essence of trade protection, and covers the effects of trade protection on the economic well-being of the state. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get the original essay Trade Protection and Enhancement of Economic Welfare The element of domestic business protection is more essential in developing countries. These state governments can protect their domestic businesses to stimulate one-time efficiency gains for fledgling businesses. Development and trade researchers argue that protecting domestic firms stimulates dynamic gains in efficiency and effectiveness. This goal is achieved when companies achieve productivity gains and strive to learn directly about efficiency (Carbaugh, 2014). Although business leaders understand in theory how to achieve high efficiency, they fail to take the big step toward this goal. On the contrary, managers “learn by doing” because they focus a lot on inefficiencies and then eliminate them. To protect these companies, governments impose trade protection so that their domestic companies have the time to learn by doing, in order to correct inefficiencies. These governments believe that by protecting domestic firms, their growth can be enormous since the practical experience of domestic firms may be compromised by other sources of efficiency such as external economies of scale (Dreyfuss, 2011). In line with competitive pressures, the combination of international trade and foreign direct investment (FDI) is capable of reducing the profitability of domestic firms. This effect is more worrying in developing countries. This prevents domestic companies from investing in capital and cost-saving technologies (Sussangkarn, 2011). The remedy may be to seek loans for investments. However, the capital markets of these developing countries may not be able to provide the required loans, forcing domestic companies to rely on retained earnings to finance their investments. To facilitate this, governments protect domestic companies in order to raise their pricesand their profitability, and facilitate their investments in capital and technologies (Hill, 2013). Therefore, protection allows businesses to reap the benefits of cost-reducing technologies and achieve efficiency. When these governments remove trade barriers, these companies are already ready to face international competition (Dreyfuss, 2011). It is worth noting the effects of trade protection on the economic well-being of countries that adopt trade protection practices. For example, the growth of productive capacities is seen as ideally fostered in an environment in which the population is free to pursue its interests. In this scenario, trade protection through laissez-faire government policies would be ideal for creating an atmosphere conducive to increasing state wealth, allowing domestic businesses to flourish and, therefore, improving the economic well-being of the state. Laissez-faire is a policy that allows people to continue their activities within the limits of public order and respect for property rights (Porter, 1990). An aspect of trade protection is essential to reduce problems caused by import and export processes. Trade protection allows nascent domestic businesses to grow and achieve economies of scale strong enough to withstand competition from international markets. The protection of internal trade does not imply that commercial activities take place across national borders (Falck, 2011). Thus, the problems encountered during import and export of products are minimized. For example, crises such as the requirement to conclude transactions only in foreign languages, foreign laws, customs and regulations free domestic companies from these traumas. Additionally, it may be difficult to obtain the information needed for foreign trade from specific companies. The many cultural diversifications of exporting states that may be necessary when conducting foreign trade all explain the problems associated with import and export trade (Herrmann, 2015). These complications require governments to encourage and therefore support domestic businesses. Since domestic companies do not export, the state uses its resources to the maximum, thereby improving its economic well-being. Agriculture is the backbone of many nations. It is rare to find a country that does not adopt some form of agriculture. A state that does not practice agriculture, although it owns large areas of land, is less likely to compete in terms of resource accumulation with countries that are largely engaged in agriculture. Agriculture is therefore directly linked to economic well-being. Biosecurity is considered in food and agriculture because it assesses and monitors the possible negative impacts of competitive gene flow and the impacts of the transition of agricultural products across international borders on animals and agricultural plants (Carbaugh, 2014). Governments' decisions to protect trade play a critical role in improving the biosecurity and sustainability of agriculture and food security. For example, the movement of foodborne pathogens from one international market to another is reduced. BSE, avian flu, and swine flu are among the diseases that are highly transmissible under unprotected/free trade where products freely enter the state (Falck, 2011). Through the protection of internal trade, the safety of agricultural products..