IntMgt Ch6 posting - Chapter 6 The Political Economy of...

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Chapter 6 The Political Economy of International Trade 11
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Free Trade Free trade occurs when Governments do not attempt to restrict what its citizens can buy from another country or what they can sell to another country Many nations are nominally committed to free trade They tend to intervene in international trade to protect the interests of politically important groups
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Video Air War 33
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Instruments Of Trade Policy The main instruments of trade policy are: Tariffs Subsides Import Quotas Voluntary Export Restraints Local Content Requirements Administrative Polices Antidumping Policies
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Tariffs Tariffs are taxes levied on imports that effectively raise the cost of imported products relative to domestic products Tariffs Increase government revenues Provide protection to domestic producers against foreign competitors by increasing the cost of imported foreign goods Force consumers to pay more for certain imports Conclusion: Tariffs are pro-producer and anti-consumer, and tariffs reduce the overall efficiency of the world economy
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Subsidies Subsidies are government payments to domestic producers Consumers typically absorb the costs of subsidies Subsidies help domestic producers in two ways: They help them compete against low-cost foreign imports They help them gain export markets
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Video U.S. Farmers CAFTA 77
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This note was uploaded on 09/19/2011 for the course MANAGEMENT 4321 taught by Professor Manning during the Fall '11 term at UT Arlington.

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IntMgt Ch6 posting - Chapter 6 The Political Economy of...

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