e protections given them, many of these industries remain inefficient because they have no incentive to change; 2) the main beneficiaries of such a system are the foreign firms that can locate with tariff protection and tax advantages; 3) most important substitution has been made possible by the heavy and often government-subsidized importation of capital goods, meaning first that capital-intensive industries are created, and second that the balance of payments problem is exacerbated and not relieved; and 4) these strategies have a detrimental effect on traditional primary-product exports.
Those who see protectionism as an option, of course, see it as necessary to protect the domestic industry and to create a level playing field--if the foreign steelmaker is getting a subsidy, the domestic steelmaker requires some form of subsidy, perhaps in the fo
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