Ch 9 - Formulation of National Trade Policies (2)

Ch 9 - Formulation of National Trade Policies (2) - o Fair...

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CHAPTER 9 FORMULATION OF NATIONAL TRADE POLICIES Issues of Trade Intervention: Should a national government intervene to protect the country’s domestic firms by taxing foreign goods entering the domestic market or constructing other barriers against imports? Should a national government directly help the country’s domestic firms increase their foreign sales through export subsidies, government-to-government negotiations, and guaranteed loan programs? Free or Fair Trade: o Free trade –minimal influence from government
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Unformatted text preview: o Fair trade – active intervention from government (managed trade) • Industry Level Arguments : o National Defense Argument: Country must be self-sufficient in critical raw materials, machinery, and technology or else be vulnerable to foreign threats Appeals to general public Protects steel, electronics, and machine tools industries, and merchant marines o Infant Industry Argument o Maintenance of Existing Jobs o Strategic Trade Theory...
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