I want to comment the blog of Melissa Wu. She talks about the new law that set by French government on websites like Amazon to protect domestic sellers and producers. The law is expected to pass at the end of the year.

In her opinion, the multinational company like Amazon should respect the country’s rules when entering the market. Global barriers to entry make it more difficult for companies to expand to foreign countries.

I agree with the writer that the trade barriers set by the government is reasonable because the barriers can effectively protect local bookstores from foreign giants which can enjoy economies of scale. It will be a tough time for the domestic book industry to survive without government protection because of higher price.

In my perspective, another way for the government to protect domestic book industry is to impose tax on books purchased from foreign producers. Tax revenue gained from the foreign producers can be used to develop domestic book industry such as providing subsidies to producers. However, it is complicated to manage this policy because many problems may come with the policy like magnitude of tax and how to supervise the authority which charges the tax.

https://blogs.ubc.ca/melissawu/

Original Source: http://www.nytimes.com/2013/10/04/business/France-Takes-Aim-at-Amazon-to-Protect-Local-Bookshops.html?ref=international