In the above example, we saw that the US Government gives massive sums of money to farmers for production

Q.:- In the above example, we saw that the US Government gives massive sums of money to farmers for production. At times, governments also give support to promote production of certain types of goods, such as those which are environmentally friendly. Discuss whether these are fair or not.

 

Answer:-

These support measures are not justified when they cover those goods which enter international market. With each support measure, different goods acquire unmerited competitive strength which has a ruinous impact on producers of these commodities in the countries which import these goods, irrespective of whether they are environmentally friendly or not. Developing countries would be justified in raising trade barriers against such measure that hurt their market.