A small business owner in the Philippines gave testimony to a parliamentary committee on trade policy: 'My family has manufactured bamboo furniture for thre...

Part (a) [2 marks]

This part tests your ability to distinguish between personal, firsthand evidence and a broader generalisation drawn from it.

• Personal evidence: The business owner states that the family workforce was reduced from 45 to 12 after foreign competition increased. This is a specific, verifiable detail from the owner's direct experience. [1]
• Broader claim: 'Globalisation has destroyed livelihoods in communities like mine.' Here, the owner moves beyond personal experience and asserts a wider pattern affecting other communities, without providing supporting data for those other cases. [1]

The skill being tested is recognising that personal anecdotes carry emotional weight but differ in nature from sweeping claims that would require systematic evidence to substantiate.

Part (b) [4 marks]

This part asks you to consider both sides of a policy intervention - tariffs on imported furniture.

• Positive consequence: Tariffs would raise the price of imported furniture, making locally produced items relatively more competitive. This could allow businesses like the one described to maintain or even expand employment, protecting livelihoods in communities that depend on traditional manufacturing. [1+1]
• Negative consequence: Higher import prices mean consumers pay more for furniture overall. This burden falls disproportionately on lower-income households, who tend to rely on affordable mass-produced goods. The policy therefore protects producers at the expense of consumers, creating a trade-off between economic protection and consumer welfare. [1+1]

Part (c) [4 marks]

This part assesses your understanding of the strengths and limitations of personal testimony as a type of evidence in policy-making.

• Advantage: Personal testimony provides a concrete, human-scale account of how trade policies affect real individuals and communities. It makes abstract economic arguments tangible for legislators, helping them understand the practical consequences of decisions that might otherwise appear purely statistical. [1+1]
• Drawback: One person's experience may not be representative of the broader industry or country. Other furniture producers might have adapted successfully to foreign competition, for example by targeting premium or niche markets. Sound policy should draw on systematic, wide-ranging data rather than a single case, because personal testimony risks creating an unbalanced picture. [1+1]

Part (d) [2 marks]

This part requires you to propose a realistic alternative policy and briefly explain its mechanism. Any well-reasoned suggestion is acceptable. Examples include:

• Government subsidies or grants to help local producers invest in modern equipment and marketing. This would allow them to reduce production costs and compete on efficiency while preserving the handmade quality that can command a premium in certain market segments. [1+1]
• Quality certification or geographical indication schemes that help consumers distinguish local handmade products from mass-produced imports, effectively creating a separate market niche where price is not the only factor. [1+1]
• Skills training programmes to help displaced workers transition into related industries such as interior design or eco-tourism, reducing dependency on a single sector. [1+1]

Only one alternative is required for full marks. The key is that the policy should address the competitive disadvantage without resorting to trade barriers.