Social Science (087) — AI-generated practice question

Trade barriers (like taxes/tariffs on imports) restrict foreign goods to protect domestic producers and workers from foreign competition.

Flexible labour laws allow companies to hire/fire workers easily, reducing costs — this attracts MNCs seeking cheap production locations.

The tension: To attract foreign investment, governments ease labour laws, which can weaken workers' job security and rights. But to protect citizens, governments enforce labour laws strictly. Similarly, using trade barriers protects domestic industries but contradicts the open-market conditions MNCs prefer. Thus, a government is pulled between protecting its people and appeasing foreign investors.

Source: Liberalisation of foreign trade and foreign investment policy; The Struggle for a Fair Globalisation, Chapter 4

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• The examiner expects you to define both tools clearly (1 mark), then explain the tension/contradiction between them (2 marks).
• Key phrase from the textbook: government must protect interests of all people, not just the rich/powerful — use this to anchor your answer.
• Avoid writing a long essay; the conflict between worker protection and investor attraction is the core point to hit.
• "Flexibility in labour laws helps companies" is directly from the Chapter 4 exercises — examiners will look for this linkage.