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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 workforceA 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 phonesGlobalizationImplementation 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 importingWant to promote own businessResources may run lowWant 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 protectedwell)-country wants to be self-reliant
-there is some sort of security hazard or threatTrade Policy: Protectionism & Trade RestrictionsCountries use protectionist measures to shield a country’s markets from intrusion by foreign competition and imports.-Tariffs-Non-tariff barriers: e.g., anti-dumping penaltiesSteel tariffsAssigned 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 industriesTariffsTaxes on imported goods.Make imports less competitive with domestic products.The Impact of Tariff (Tax) BarriersTariff 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-CompetitionEx) aerospace industry- needs steel; if steel tariffs are raised, but domestic steel isn’t good enough, it will have to buy the more expensive stuffNon-tariff barrier: anti-dumping penaltiesShrimp 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 penaltyProtectionismCountries use protectionist measures to shield a country’s markets from intrusion by foreign competition and imports.