Global chap 6 .txt

The absence of govt barriers to the free flow of goods and services between countries

Trade policy uses seven main instruments

------ are the oldest and simplest instrument of trade policy,and also the instrument that GATT and WTO have been most sucessful in limiting

Tax levied on imports

A tariff levied as a fixed charge for each unit of good imported ($3 per barrel of oil)

A tariff levied as a porportion of the value of an imported good

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

Who gains from a tariff and why?

Who loses from tariffs?

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

Export tarifs are far less common but have two objectives

Govt financial assistance to a domestic producer

This takes many forms such as cahs grants, low interest loans, tax breaks, etc

Subsidies help domestic producers in two ways

---- tends to be one of the largest beneficiaries of subsidies in most countries

The main gains from subsidiex accrue to -------, whose international competitiveness is increased as a result

----- help a firm achieve a first mover advantage In an emerging industry

Govt subsidies must be paid for, typically by

A direct restriction on ghe quantity of some good that may be imported into a country

The process of aplying a lower tariff rate to imports within the quota than those over the quota

A quota on trade imposed by the exporting county, typically at the request of the importing country,s govt

One of the most famous historical examples of voluntary expor restraint was

Foreign producers agree to VERs b.c they fear more damaging punitive ------- or ------- might follow if they do not

Tariffs, subsidied, import quotas and VERs benefit ------ by limiting impor t competition

The exta profit producers make when supply is artifically limited by an import quota

A requirement that some specific fraction of a good be produced domestically

Local content requirment can be expressed in what to terms

Bureaucratic rules designed to make it difficult for imports to enter a country

Sellin goods in a foreign market at below their costs of production or below their fair market value

Policies designed to punish foreign firms that engage in dumping and thus protect domestic producers from foreign competition

Antidumping duties

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

------ 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)

------- intervention are typically concerned with boosting the overall wealth of a nation

Most common political argument for govt intervention

------ was designed to portect jobs of europe politcally powerful farmers by resrptricting imports and guarentteeing prices

Countries sometimes argue to,protect certain industries b.c they are imporant for

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

Many govt long for regulations to --------- from unsafe products

Act passed in 1996 that allowed americans to sue foreign firms that use cuban property confiscated from them after the 1959 revolution

Act passed in 1996 similar to the helms- burton act aimed at libya and iran

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

Govt policy aimed at improving the competitive positon of domestic industry or domestic firm in the world market

Enacred in 1930 by the US congress this tariff erected a wall of barriers against imports into the US

------- 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

Protecting and promoting ------ in other countries is an important element of foreign policy for many democracies

An argumnet frequently made by environmental organizations is that there is strong relationship between ---------&--------