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INTERNATIONAL TRADE Pertemuan 25 Matakuliah: J0114-Teori Ekonomi Tahun: 2009.
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Transcript of INTERNATIONAL TRADE Pertemuan 25 Matakuliah: J0114-Teori Ekonomi Tahun: 2009.
INTERNATIONAL TRADEPertemuan 25
Matakuliah : J0114-Teori EkonomiTahun : 2009
Bina Nusantara University 3
Some Key Facts• U.S. Trade Deficit $782 Billion in Goods
in 2005• U.S. Trade Surplus $58 Billion in
Services in 2005• U.S. Exports Chemicals, Consumer
Durables, Agricultural Products, Semiconductors
• U.S. Imports Petroleum, Automobiles, Appliances, Computers
• Some of Same Categories are Exported and Imported
• Canada Largest U.S. Partner Quantitatively
Bina Nusantara University 4
Some Key Facts
• U.S. Sizable Trade Deficit with China• U.S. Dependence on Oil is Reflected• U.S. has World’s Highest Trading Volume• Exports are 11% of U.S. Output• China a Major Trade Force• International Trade Links World Economies• International Trade is the Center of Policy
Debates
Bina Nusantara University 5
Some Key Facts
GermanyUnited States
ChinaJapan
FranceNetherlands
ItalyUnited Kingdom
0 2 4 6 8 10 12
10.0
8.9
6.5
6.2
4.9
3.9
3.8
3.8
Source: World Trade Organization
Shares of World Exports, Selected Nations
Percentage Share of World Exports, 2004
Bina Nusantara University 6
The Economic Basis for Trade
• Labor-Intensive Goods• Land-Intensive Goods• Capital-Intensive Goods• Comparative Advantage
– Graphical Analysis– Two Isolated Nations
• Constant Costs• Different Costs• U.S. Absolute Advantage in Both Products• Opportunity Cost Ratio
Graphically…
Bina Nusantara University 7
The Economic Basis for Trade
Co
ffe
e (T
on
s)
30
25
20
15
10
5
0
35
40
5 10 15 20 25 30Wheat (Tons)
Co
ffe
e (T
on
s)
30
25
20
15
10
5
0
35
40
5 10 15 20Wheat (Tons)
(a) United States (b) Brazil
12
18
8
4
A
B
Bina Nusantara University 8
The Economic Basis for Trade
• Self-Sufficiency Output Mix• Specializing Based on Comparative
Advantage– Principle of Comparative Advantage
• Terms of Trade– 1W ≡ 1C in the U.S.– 1W ≡ 2C in Brazil
• Gains from Trade• Trading Possibility Line
– Improved Options– Added Output
Bina Nusantara University 9
The Economic Basis for TradeC
off
ee
(To
ns)
30
25
20
15
10
5
0
35
40
45
5 10 15 20 25 30Wheat (Tons)
Co
ffe
e (T
on
s)
30
25
20
15
10
5
0
35
40
45
5 10 15 20Wheat (Tons)
(a) United States (b) Brazil
12
18 8
4
A
B
A’
B’
C
C’
W
c
ww’
TradingPossibilities Line
TradingPossibilities Line
Bina Nusantara University 10
Supply and Demand Analysis of Exports and Imports
• World Price• Domestic Price• Supply and Demand in the United
States– U.S. Export Supply
• Export Supply Curve– U.S. Import Demand
• Import Demand Curve
Bina Nusantara University 11
Supply and Demand Analysis of Exports and Imports
Pri
ce (
Per
Po
un
d;
U.S
. D
oll
ars
1.50
1.25
1.00
.75
.50
050 75 100 125 150
Quantity of Aluminum(Millions of Pounds)
1.50
1.25
1.00
.75
.50
050 100
Quantity of Aluminum(Millions of Pounds)
Pri
ce (
Per
Po
un
d;
U.S
. D
oll
ars
(a) U.S. Domestic Aluminum Market
(b) U.S. Export Supplyand Import Demand
Dd
Sd
U.S.ExportSupply
U.S.Import
Demand
a
b
c
x
y
Surplus = 50
Surplus = 100
Shortage = 50
Shortage = 100
U.S. Aluminum Market
Bina Nusantara University 12
Supply and Demand Analysis of Exports and Imports
Pri
ce (
Per
Po
un
d;
U.S
. D
oll
ars
1.50
1.25
1.00
.75
.50
050 75 100 125 150
Quantity of Aluminum(Millions of Pounds)
1.50
1.25
1.00
.75
.50
050 100
Quantity of Aluminum(Millions of Pounds)
Pri
ce (
Per
Po
un
d;
U.S
. D
oll
ars
(a) Canada’s Domestic Aluminum Market
(b) Canada’s Export Supplyand Import Demand
Dd
Sd
CanadianExportSupply
CanadianImport
Demand
a
r
s
t
Surplus = 50
Surplus = 100
Shortage = 50
Canadian Aluminum Market
Bina Nusantara University 13
Supply and Demand Analysis of Exports and Imports
1.00
.75
.88
050 100
Quantity of Aluminum(Millions of Pounds)
Pri
ce (
Per
Po
un
d;
U.S
. D
oll
ars
Equilibrium World Price andQuantity of Exports and Imports
CanadianExportSupply
CanadianImport Demand
e
World Market for Aluminum
U.S.ExportSupply
U.S.Import
Demand
Equilibrium
Bina Nusantara University 14
Trade Barriers
• Revenue Tariff• Protective Tariff• Import Quota• Nontariff Barrier (NTB)• Voluntary Export Restriction (VER)• Economic Impact of Tariffs
– Direct Effects• Decline in Consumption• Increased Domestic Production• Decline in Imports• Tariff Revenue
– Indirect Effect
Bina Nusantara University 15
Trade Barriers
Quantity
Pri
ce
0
Dd
Sd
Pd
Q
Sd + Q
Pt
Pw
a b c d
Economic Effects of a Protective Tariff or an Import Quota
Bina Nusantara University 16
Trade Barriers
• The Case for Protection: A Critical Review– Military Self-Sufficiency Argument– Diversification-for-Stability Argument– Infant Industry Argument
• Counterarguments• Strategic Trade Policy
– Protection-Against-Dumping Argument• Dumping
– Increased Domestic Employment Argument• Smoot-Hawley Tariff Act
– Cheap Foreign Labor Argument
Bina Nusantara University 17
Trade Adjustment Assistance
• Trade Adjustment Assistance Act of 2002
• Offshoring• The World Trade Organization (WTO)
– The DOHA Round