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WorPol 10-5

WorPol 10-5 - WorPol 10-5 Barriers of Free Trade Tariffs...

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WorPol 10-5 Barriers of Free Trade Tariffs Non-tariff barriers (sanctions, quotas, subsidies etc) Social issues (labor, environment, human rights) Others (monopoly, oligopoly) A free trade world To maximize total world output, we need to: o First, fully employ all resources worldwide o Second, allocate those resources within countries to each country’s comparative advantage industries o Third, allow the countries to trade freely thereafter The WTO Global trading regime o Goal is to promote free trade globally by removing barriers to trade o Also has dispute-settlement mechanisms Various rounds of negotiations have occurred o The latest, the Doha round, failed in 2006 when countries disagreed about tariff reduction in agriculture and services Trade in Textiles o Developed countries used to have e quotas on imports from developing countries o Quotas distort free trade o But, in this case, quotas helped LDCs like Bangladesh, Cambodia get
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