The protection of consumers is…
The protection of consumers is another key reason for government intervention. Governments can also use trade policies to improve human rights with other countries. The protections offer to firms that contest on a stage of price over quality, the incorrect sense of security that it builds and the denial of easy access to certain products for consumers.
At the core of protectionism are tariffs, duties, quotas and any other measures designed to restrict the import of foreign goods in interest of protecting domestic companies from foreign taking over. Consumers pay more with protectionism. Without a system of competitive pricing, domestic companies are free to raise their prices without raising the quality of their goods. When a business has no competition then the consumer is left without options. Singapore government (Agri-Food and Veterinary Authority) has taken steps to ensure more options on shelves and availability of the infant formula is easily reached by consumers (Tay, 2017). The government also strengthen restrictions on labelling and advertising of infant milk powder, including prohibiting the use of nutrition and health claims and images for infant formula milk. In this way, consumer protections are achieved, and the entry barriers of competitors is also in control.
This in turn will protect the domestic manufacturers.The supply chain in China is affected by cost pressures causing quality fade, multiple levels of outsourcing often involving small producers, Chinese cleverness at evading detection, and poor product safety surveillance by both the Chinese and U.S. governments (Berman, Swani, 2010). An example of this is the China lead paint disaster with children’s toys.In 2007, Mattel was forced to recall roughly seven million toys, including hundreds of thousands of die-cast toys, for containing excessive levels of lead. The china factory had outsourced the production to another firm, which had then used an unauthorised type of paint.
To protect the consumers, the European came up with a new force Consumer Product Safety Improvement Act to protect the consumers, that enforced only limited the use of only 8 heavy metals during the manufacturing of the toys, this thus affect the cost of production for the Chinese factories and sales on the retail outlets (Moore, 2011). Consumers will would be extra cautious of not purchasing the toys that have history of tainted paint cases. This not only impact on the retail outlets as well as the manufacturers and companies representing the brands must deal with crisis management of the brand. Businesses suffer from protectionism too. Hence government support is essential to aid building corporate contentment to protect the business in the event of strong foreign competition as these businesses might not have the resources necessary to survive on their own. Singapore have Intellectual property law to protect the business against competitors on the company’s patented design.