Strong domestic demand Inhospitable weather and geography in Scandinavian

Strong domestic demand inhospitable weather and

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-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
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-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.
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