Strong domestic demand inhospitable weather and

-Strong domestic demand:
- Inhospitable weather and geography in Scandinavian countries forced the development of cellular
technology
- Price conscious consumers
-Strong local competition: unlike other nations, telephone services were never a monopoly in Finland. Strong
competition from Motorola, Ericsson among others.
-Strong intellectual property laws governing innovations
-Factors: capital, educated workforce
 A lot cell phone tech. actually developed in Scandinavian countries; this is because it is difficult and
expensive to lay down landlines, so developed technology for cell phones
Globalization
Implementation of free trade on a global scale, which is accomplished by international trade liberalization (by
removing policies that serve as barriers to trade).
When would a country be opposed to free trade?
-Think about outsourcing
-Think about exporting
-Think about importing
 Want to promote own business
 Resources may run low
 Want to employ people within your country (Outsourcing takes away domestic jobs)
 Opposed to free trade when:
-unemployment rates are high
-country sees that tensions are rising with trade partners
-trading partner does not recognize intellectual property laws (b/c you know your exports will not be protected
well)
-country wants to be self-reliant

-there is some sort of security hazard or threat
Trade Policy: Protectionism & Trade Restrictions
Countries use protectionist measures to shield a country’s markets from intrusion by foreign competition and
imports.
- Tariffs
- Non-tariff barriers: e.g., anti-dumping penalties
Steel tariffs
Assigned Reading: -
aluminum-makers-hurt-others-industries
-Trump wants to raise the tariffs on steel; wants to protect the steel industry in the US
-May benefit steel industry but will harm many other industries
Tariffs
Taxes on imported goods.
Make imports less competitive with domestic products.
The Impact of Tariff (Tax) Barriers
Tariff Barriers tend to weaken :
- International relations (they can start trade wars, where other countries retaliate begin to increase
tariffs as well)
Tariffs Barriers tend to restrict :
- Manufacturer’ supply sources
- Choices available to consumers
- Competition
Ex) aerospace industry- needs steel; if steel tariffs are raised, but domestic steel isn’t good enough, it will have
to buy the more expensive stuff
Non-tariff barrier: anti-dumping penalties
Shrimp anti-dumping law suit filed by the Southern Shrimping Alliance (USA) accusing shrimp farms in Brazil,
China, Equador, Thailand etc. of dumping (selling products at a price less than the cost of production in order
to undermine competition).
 Anti-dumping penalty : if foreign countries are dumping products in the US (selling at very low price, much
lower than cost of production), US can charge this penalty
Protectionism
Countries use protectionist measures to shield a country’s markets from intrusion by foreign competition and
imports.