Arguments for Protectionism

There will always be industries that are in decline (sunset industries) because they are unable to compete with foreign competition. This may lead to structural unemployment and the government may want to intervene to avoid this. However goverment intervention will only prolong this process, and it may be better to move resources from the declining industry into emerging industries, regardless of the short-run social costs.

Domestic firms may not be able to compete with foreign firms who pay their workers much lower wage rates. This affects mainly manufacturing industries in developed countries. This goes against the concept of comparative advantage however, as countries with high wages will not be producing as efficiently as countries with lower wages.  

New industries may not have the economies of scale advantages as they have not had enough time to reach an efficient level, and so will not be able to compete with foreign firms yet. However, in most developed coutries industries have access to large amounts of financial capital, and can set up at a relatively efficient size right off the bat. In developing countries this concern is more valid, however it is unlikely that developing countries will have the political power necessary to impose protectionist policies without backlash from developed countries.

If a country becomes too dependent on the exports of a few products, then any change in the global markets for these products will have a large effect on that county's economy. Many developing countries are forced to specialize in primary products, and are disproportionately affected. This is not so much an argument for protectionism as a warning against over-specialization. 

Certain domestic industries may need to be protected in case of shortages during wartimes when importing goods such as steal or food may be impossible. However this is often an exaggeration, as it is unlikely that a country will go to war with all countries from which it imports these products.

Dumping can harm domestic producers, and so if a country can prove that dumping has occured it is permitted to impose anti-dumping measures. However, it can be difficult to prove that dumping has occurred, and to an extent even subsidizing exported goods may be considered dumping as the market price is lower than the costs of production for the firm. 

A government may ban imports of a good which it believes may be harmful in terms of health, safety, or environment sustainability. This is usually a valid argument, but sometimes the risks are simply an excuse for protectionism. Also, it is expensive to meet the standards and to obtain approval and documentation, which disadvantages developing countries. The Standards and Trade Development Facility is designed to help developing countries improve their capacity to analyse and implement international standards.

Tariffs are an important source of government revenue for developing countries in particular, as they have more trouble collecting taxes. Tariffs are actually a tax on the domestic consumers. 

Protectionist measures may be used to decrease imports when there is more money being spent on imports than is being brought in by exports. This is a band-aid fix as it doesn't really deal with the problem causing the deficit, and it may bring on reliatory measures from other countries.