BUSMHR 2000 Study Guide - Final Guide: Ad Valorem Tax, Infant Industry Argument, Factors Of Production

• School: Ohio State University
• Department: Business Admin : Mgmt & HR
• Course: BUSMHR 2000
• Professor: Makhija Mona

Document Summary

Why do governments intervene in international trade: political reasons. Enhancing competitiveness: protecting local employment, retaliation. Comparable or fair access to other country"s markets: foreign policy and political relationships with other countries. Unfriendly: protecting consumers, industrialization argument, essential industry argument. Protect important national industries: infant industry argument. Protect new industry until it becomes more competitive: promoting investment inflows. Import restrictions make foreign firms invest locally: balance of payments objectives. Export promotion: only make products for export. How do governments control trade: different instruments to control trade. Price of goods (tariffs: tariffs (duties) may be levied. On good entering, leaving, or passing through a country. On a per unit (specific) or a value basis (ad valorem: many more types of non tariff barriers than types of tariffs. Import quotas to limit amount, can be voluntary (vers) Buy local laws in favor of domestically produced goods, local content laws.