Politics of Trade Barriers

Politics of Trade - Keiretsu(the word means system are affiliations between firms 1 horizontal 2 vertical 3 distribution Keiretsu can create entry

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Politics of Trade Barriers Trade policy is an outcome of the political process. Any change in policy produces winners and losers who have an incentive to lobby for a legislative outcome in their own favor. On the other side, politicians need votes and money to stay in office. These are the sources of supply and demand for trade policy. Those who gain from free trade are numerous and gain only a little while those who gain from protection are highly concentrated in well-defined industry groups. It is easier, therefore, for protectionists to organize. Japan's Development Strategy high saving and investment rates; high investment in training and education MITI targeted industries with government-sponsored research, R&D subsidies, preferential access to capital, and temporary trade protection long-term transactions based on tradition are more common than those based solely on the market
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Keiretsu (the word means system) are affiliations between firms. 1. horizontal 2. vertical 3. distribution Keiretsu can create entry barriers for newcomers and engage in anti-competitive practices which reduce imports. Effects of Trade on the Environment It is sometimes argued that trade is bad for the environment because trade promotes economic growth and economic growth leads to environmental degradation in the form of pollution, depletion of resources, and degradation of the scenic environment. In developing countries, rural areas have seen large-scale soil erosion and water quality deterioration, deforestation, and declining soil productivity. Urban areas have experienced seriously diminished air and water quality. But, growth enables governments to tax and raise resources to reduce pollution and protect the environment. We see more environmental protection in rich countries....
View Full Document

This note was uploaded on 11/22/2011 for the course FIN FIN1100 taught by Professor Bradrifkin during the Fall '09 term at Broward College.

Ask a homework question - tutors are online