Global chap 6 .txt

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  1. The absence of govt barriers to the free flow of goods and services between countries
    Free trade
  2. Trade policy uses seven main instruments
    Tariffs, subsidies, import quotas, voluntary export restraints, local content requirements, administratve policies, and anti dumping duties
  3. ------ are the oldest and simplest instrument of trade policy,and also the instrument that GATT and WTO have been most sucessful in limiting
  4. Tax levied on imports
  5. A tariff levied as a fixed charge for each unit of good imported ($3 per barrel of oil)
    Specified tariff
  6. A tariff levied as a porportion of the value of an imported good
    Ad Valorem Tariff
  7. In most cases ----- are placed on imports to protect domestic producers from foreign competition by raising the price of imported goods, and produce revenue for the govt
  8. Who gains from a tariff and why?
    • Govt, source of rev
    • Domestic producers, protection against foreign competitors
  9. Who loses from tariffs?
    Consumers, may have to pay more
  10. Import tariffs reduce the overall ----- of the world economy, because a protective tariff encourages domestic firms to produce products at home that could be produced in other countries
  11. Export tarifs are far less common but have two objectives
    • - raise rev for govt
    • - reduce exports from a sector (often political)
  12. Govt financial assistance to a domestic producer
  13. This takes many forms such as cahs grants, low interest loans, tax breaks, etc
  14. Subsidies help domestic producers in two ways
    • - competign against foreign imports
    • - gianing exports markets
  15. ---- tends to be one of the largest beneficiaries of subsidies in most countries
  16. The main gains from subsidiex accrue to -------, whose international competitiveness is increased as a result
    Domestic producers
  17. ----- help a firm achieve a first mover advantage In an emerging industry
  18. Govt subsidies must be paid for, typically by
    Taxing individuals and corporations
  19. A direct restriction on ghe quantity of some good that may be imported into a country
    Import quota
  20. The process of aplying a lower tariff rate to imports within the quota than those over the quota
    Tariff rate quota
  21. A quota on trade imposed by the exporting county, typically at the request of the importing country,s govt
    Voluntary export restaint (VER)
  22. One of the most famous historical examples of voluntary expor restraint was
    Auto exports to the US enfored by japanese auto producers
  23. Foreign producers agree to VERs b.c they fear more damaging punitive ------- or ------- might follow if they do not
    Tariffs, import quotas
  24. Tariffs, subsidied, import quotas and VERs benefit ------ by limiting impor t competition
    Domestic producers
  25. The exta profit producers make when supply is artifically limited by an import quota
    Quota rent
  26. A requirement that some specific fraction of a good be produced domestically
    Local content requirement
  27. Local content requirment can be expressed in what to terms
    • Physical (75% of component parts for this product must be produced locally)
    • Value terms (75% of the value of this product must be produced locally)
  28. Bureaucratic rules designed to make it difficult for imports to enter a country
    adminstrative trad polices
  29. Sellin goods in a foreign market at below their costs of production or below their fair market value
  30. Policies designed to punish foreign firms that engage in dumping and thus protect domestic producers from foreign competition
    Antidumping policies
  31. Antidumping duties
    Countervailing duties
  32. Ulaoding excess production into foreign markets resulting in predatory behavior, with producers using substaintial profits fro their home markets to subsidize prices in a foreign market with a view to drive competitors out of the market then they can raise the prices and earn substainstial profits
  33. ------ arguments of govt interventionar concerned with protecting the interests of certain groups within a natio, or achieving an objective outside the economic relationship (protectign environment, human rights)
    Political govt intervention
  34. ------- intervention are typically concerned with boosting the overall wealth of a nation
    Economic govt intervention
  35. Most common political argument for govt intervention
    Protect jobs and industries
  36. ------ was designed to portect jobs of europe politcally powerful farmers by resrptricting imports and guarentteeing prices
    CAP, common agricultural policy
  37. Countries sometimes argue to,protect certain industries b.c they are imporant for
    National security
  38. Govt should use the threat to intervene in trade policy as a bargaining tool to ehlp open foreign markets and force foreign trading partners to play the rule of the game
  39. Many govt long for regulations to --------- from unsafe products
    Protect consumers
  40. Act passed in 1996 that allowed americans to sue foreign firms that use cuban property confiscated from them after the 1959 revolution
    Helms-burton acr
  41. Act passed in 1996 similar to the helms- burton act aimed at libya and iran
    D`amato act
  42. New industries in developing countires must eb temproarilly protect from international commetion to help them reach a position where they cancompete on world markets with the firms of deveoped nations
    Infant industry
  43. Govt policy aimed at improving the competitive positon of domestic industry or domestic firm in the world market
    Strategic trade policy
  44. Enacred in 1930 by the US congress this tariff erected a wall of barriers against imports into the US
    Smoot-hawley act
  45. ------- sometimes use trade policy to support theur foreign policy objectives, grant preferential trade with country which it wants to build strong relations and also trade policy used several times to pressure or punish rouge states to do not abide by imternational laws or norms
  46. Protecting and promoting ------ in other countries is an important element of foreign policy for many democracies
    Human rights
  47. An argumnet frequently made by environmental organizations is that there is strong relationship between ---------&--------
    Income levels and environmental pollution
Card Set:
Global chap 6 .txt
2012-04-07 14:22:38

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