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Chap013 - Chapter 13 The Instruments of Trade Policy...

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Chapter 13 – The Instruments of Trade Policy CHAPTER 13 THE INSTRUMENTS OF TRADE POLICY Learning Objectives: To learn about the different tax instruments employed to influence imports. To become familiar with policies used to affect exports. To grasp the problems encountered in measuring the presence of protection. To understand the different nontariff policies used to restrict trade. I. Outline Introduction - In What Ways Can I Interfere with Free Trade? Import Tariffs - Specific Tariffs - Ad Valorem Tariffs - Other Features of Tariff Schedules - Measurement of Tariffs Export Taxes and Subsidies Nontariff Barriers to Free Trade - Import Quotas - “Voluntary” Export Restraints (VERs) - Government Procurement Provisions - Domestic Content Provisions - European Border Taxes - Administrative Classification - Restrictions on Services Trade - Trade-Related Investment Measures - Additional Restrictions - Additional Domestic Policies That Affect Trade Summary II. Special Chapter Features In the Real World: U.S. Tariff Rates In the Real World: The U.S. Generalized System of Preferences In the Real World: Nominal and Effective Tariffs in the United States and Japan In the Real World: Effective Tariff Rates in Bangladesh In the Real World: Is It a Car? Is It a Truck? In the Real World: Examples of Control over Trade In the Real World: The Effect of Protection Instruments on Domestic Prices 13-1
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Chapter 13 – The Instruments of Trade Policy III. Purpose of Chapter The purpose of the chapter is to introduce the wide variety of trade-distorting instruments that exist in practice, as well as to acquaint students with particular policy concepts such as most-favored-nation treatment (normal trade relations) and the effective rate of protection. Once the instruments are understood, the stage is set for the discussion of their market and welfare implications in Chapter 14. IV. Teaching Tips A. In this chapter we have refrained from saying much about welfare – reserving that discussion for Chapter 14. The chapter begins with four examples of the instruments of trade policy being used by industrialized nations. Hopefully, the students will be motivated to use this chapter to classify these instruments and to gain an understanding of how the instruments are used. If you don’t like our division of instruments and welfare effects, feel free to combine the two chapters if that helps. B. In the discussion of GSP, it is useful to spend more time than we do in the text on the fact that there are ceilings to the quantities of imports that can come into the United States (although not for the “least developed” countries) and that the range of goods permitted is rather limited. Also, the “graduation” issue seems of some interest to students.
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