Problem
1. Explain why a government's commitment to income distribution issues can cause policy to be protectionist. Is such policy inevitable if income distribution is a key target?
2.
(a) Why might an economist see virtue in the concept of trade adjustment assistance (TAA)? What difficulties might be encountered in practice in the implementation of TAA?
(b) Some economists think that TAA is discriminatory because special assistance is given to workers displaced by imports while workers displaced by domestic competition receive no such special favors. Do you think this observation rules out TAA as a desirable policy? Why or why not?