balance of payments argument for protection

Definition

Economics

  • A common reason for restricting imports, especially under fixed exchange rates, when a country is losing international reserves due to a trade deficit. It can be said that this is a second best argument, since adevaluation could solve the problem without distorting the economy and therefore at smaller economic cost.
http://www.dictionarycentral.com/definition/balance-of-payments-argument-for-protection.html