Formulation of National Trade Policies
41
Chapter 9 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall Chapter 9 - 1 Formulation of National Trade Policies
description
Formulation of National Trade Policies
Transcript of Formulation of National Trade Policies
Chapter 9 - 1
Chapter 9
Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
Formulation of National Trade
Policies
Chapter 9 - 2
Learning Objectives
• Review pros and cons of governmental intervention in international trade
• Identify advantages and disadvantages of adopting an industrial policy
• Analyze how domestic politics affect a country’s international trade policies
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Chapter 9 - 3
Learning Objectives
• Describe the major tools countries use to restrict trade
• Specify the techniques countries use to promote international trade
• Explain how countries defend against unfair trade practices
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Chapter 9 - 4
Rationale for Trade Intervention
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Chapter 9 - 5
Trade Policy Debate
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Free Trade
Fair Trade
Chapter 9 - 6
Industry Arguments
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National Defense
Infant Industries
Strategic TradeTheories
Maintenanceof Jobs
Chapter 9 - 7Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
National Defense
•Raw Materials•Machinery•Technology
Chapter 9 - 8Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
Government ProtectionComparativ
e Advantage
Infant Industries
Chapter 9 - 9
Maintenance of Jobs
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Existing Levels of Employment
Relief from Competition
Chapter 9 - 10
Strategic Trade Theory
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Oligopolistic Industries
Government Intervention
Requests for Protection
Chapter 9 - 11
Payoff Matrix: Profits from Developing a Nuclear Power Plant
Design (in billions of USD)
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Arev
a
Develop
Do NotDevelop
Develop Do Not DevelopToshiba
-1
-1 10
0
10
0
0
0
Chapter 9 - 12
Payoff Matrix: Profits Resulting from a $2 Billion Subsidy to Areva
(in billions of USD)
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Arev
a
Develop
Do NotDevelop
Develop Do Not DevelopToshiba
-1
-1 + 2 = +1 10 + 2 = 12
0
10
0
0
0
Chapter 9 - 13
Summary of Discussion
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Chapter 9 - 14
Advantages and Disadvantages of
Adopting an Industrial Policy
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Chapter 9 - 15Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
Economic Development
•Export Strategy•Import Strategy
Chapter 9 - 16
Industrial Policy
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Opportunities Challenges
Key Industries
Competitiveness
Politicians
Special Interests
Chapter 9 - 17Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
Public Choice Analysis
•Interest Groups•Elected Officials
Chapter 9 - 18
Summary of Discussion
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Chapter 9 - 19
Barriers to International Trade
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Chapter 9 - 20
Tariff Barriers
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•Export Tariffs
•Transit Tariffs
•Import Tariffs
Chapter 9 - 21Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
Three Import TariffsHeading/Subheading
Stat.Suffix Article Description
Units of Quantity Rates of Duty
2006.00 Fruit, nuts, fruit peel, other plant parts, preserved by sugar
2006.00.20 00 Cherries Kg 9.9¢/kg + 6.4%
2006.00.30 00 Ginger Root Kg 2.4%
2006.00.40 00 Pineapples Kg 2.1%
Other, including mixtures:
2006.00.50 00 Mixtures Kg 16%
2006.00.60 00 Citrus Fruit; Peel of citrus or other fruit kg 6¢/kg
2006.00.70 00 Other Fruit and Nuts Kg 8%
2006.00.90 00 Other kg 16%
Chapter 9 - 22
Impact of an Import Tariff on Demand for U.S. Made SUVs
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Gainers: Producers, suppliers, labor, dealers & communities associated with U.S. SUVs
Losers: Domestic consumers, workers, producers & dealers associated with Foreign SUVs
Chapter 9 - 23
Nontariff Barriers
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Numerical Quotas
Numerical Export Controls
Other Nontariff Barriers
Chapter 9 - 24
Numerical Quotas
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Tariff
rate
on
wid
gets
Number of widgets100,000
Imports above thresholdQuota threshold
0
TL
TH
Chapter 9 - 25
Numerical Export Controls
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Quantitative Trade Barriers
Voluntary Export Restraint
Embargos and Bans
Chapter 9 - 26
• Product and Testing Standards
• Restricted Distribution-Network Access
• Public-Sector Procurement Policies
• Local-Purchase Requirements
• Regulatory and Currency Controls
• Investment Controls
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Other Nontariff Barriers
Chapter 9 - 27
Summary of Discussion
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Chapter 9 - 28
Promotion of International Trade
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Chapter 9 - 29
Government Subsidies
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Opportunities Challenges
Export Markets
Foreign Imports
Trade Patterns
Efficient Producers
Chapter 9 - 30
Foreign Trade Zones
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Preferential Tariff Treatment
Economic Development
Customs Duties
Chapter 9 - 31
Export Financing Programs
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Government-Owned Agencies
Export-Import Bank of the U.S.
Overseas Private Investment Corp.
Chapter 9 - 32
Summary of Discussion
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Chapter 9 - 33
Controlling Unfair Trade Practices
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Chapter 9 - 34
Unfair Trade Practices
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International Trade
Administration(ITA)
International Trade
Commission(ITC)
Chapter 9 - 35
Countervailing Duty
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ForeignSubsidy
Ad ValoremTariff
Chapter 9 - 36
Antidumping Laws
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•Price Discrimination•Predatory Pricing
Chapter 9 - 37
Unfair Trade Laws
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Opposition to Enforcement
Protectionist Trade Barriers
Harm to Consumers
Chapter 9 - 38Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
Sudden Import Surges
Safeguards
Chapter 9 - 39
Summary of Discussion
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Chapter 9 - 40
Chapter 9
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Formulation of National Trade
Policies
Chapter 9 - 41Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
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