Chapter 6 Student P10

Chapter 6 Student P10 - Chapter6 ThePoliticalEconomyof...

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Chapter 6 The Political Economy of  International Trade
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Key Concepts Forms of government intervention The role of the World Trade Organization Accomplishments of the Uruguay Round Goals and challenges in the Doha Round
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Instruments of Trade Policy Tariffs Subsidies Import Quotas Voluntary Export Restraints Local Content Requirements Administrative Trade Policies Antidumping Policies
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Tariffs Specific tariffs are levied as a fixed  charge for each unit. Ad valorem tariffs are levied as a  proportion of the value of the imported  good. Export tariffs are taxes placed on a  good that is exported from a country.
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Subsidies Government payments to domestic  producers that lower production costs. Cash grants, low-interest loans, tax  breaks, or government equity  participation
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Import Quotas Restriction on the quantity of a good to  be imported into a country. Can be enacted by issuing import  licenses to a limited number of firms. With a tariff rate quota, a lower tariff  rate is applied to imports within the  quota than those above the quota.
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Voluntary Export Restraints Quota on trade imposed by exporting  country, typically at the request of the  importing country. Countries agree to voluntary export  restraints to avoid other trade actions.
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Requires some specific fraction of a  good to be produced domestically. Requirement can pertain to a  minimum percent of component parts  or a percent of the value of the good. Used by developing nations to 
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This note was uploaded on 04/17/2010 for the course MGT 302 taught by Professor West during the Spring '10 term at ASU.

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Chapter 6 Student P10 - Chapter6 ThePoliticalEconomyof...

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