Professional Documents
Culture Documents
15th edition
AKJ
AKJ
Protectionism
Protectionism is the economic policy
of restraining trade between
countries through methods such as
tariffs on imported goods, restrictive
quotas, and a variety of other
government regulations designed to
allow "fair competition" between
imports and goods and services
produced domestically.
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Protection
Logic and Illogic
Arguments for protectionism:
Trade Barriers
Tariffs
Quotas and Import Licenses
Voluntary Export Restraints (VER)
Boycotts and embargoes
Monetary barriers
Blocked currency
Government approval
Standards
Antidumping penalties
Domestic subsidies and economic stimuli
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Trade Barriers
Tariffs are taxes imposed by a government on goods
entering its borders.
Inflationary pressures, special interests privileges,
government control and political considerations in
economic matters, and the number of tariffs
Balance-of-payment positions, supply and demand
patterns, and international relations by starting trade
wars
Manufacturers supply sources, choices available to
consumers, and competition
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Trade Barriers
Quotas
Quota is a specific unit or dollar limit applied to a
particular type of good (increases price of good)
Import licenses limits quantities on a case-by-case basis
Japan and foreign rice; Banana wars between the United
States and the EU
Trade Barriers
Boycotts and Embargoes
Boycott is an absolute restriction
against the purchase and importation of
certain goods from other countries. Can
be from Government and also from
citizens. Ex: Nestle, Anti Israeli Products.
An embargo is a refusal to sell to a
specific country.
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Trade Barriers
Blocked Currency: refusing to allow
an importer to exchange its national
currency for the sellers currency; as a
political weapon/response to a difficult
balance of payments situation.
Differential Exchange Rate
Government Approval: Severe
shortage of foreign currency.
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The World
Trade Organization (WTO)
WTO which is an institution, not an agreement, was founded
in 1994.
Sets many rules governing trade between its 148 members
Provides a panel exports to hear and rule on trade disputes
between members
Issues binding decisions
All member countries will have equal representation
Member countries have open their markets and to be bound by
the rules of the multilateral trading system
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Anti-globalization Protests
The unintended consequences of globalizing
Environmental concerns
Worker exploitation and domestic job losses
Cultural extinction
Higher oil prices
Diminished sovereignty of nations
Protests
Antisweatshop campaigns
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