Introduction to Administrative Studies
ADMS1000 – Summer 2012 – Eytan Lasry
Lecture 12 – Exam Review – July 31
Trade Protectionism and Tariffs
- What are the problems with trade protectionism? [Opposite of Globalization]
o Trade retaliation
o Increased costs to consumers
o Limits competitiveness of domestic firms
- How tariffs affect the economy handout:
o Impact on exporting country:
Lower production, job losses, economic decline…
o Impact on importing country:
Less competition for domestic firms, rising sales, prices,
employment, spending, government revenues…
Increased costs to consumers, less spending on other industries,
economic decline, costs of imposing + collecting tariffs, possible
costs of retaliation and trade wars…
Chapter 6 Textbook Case Discussion
- Amazon in Canada p. 138
o Why is this about Globalization/Protectionism?
Foreign ownership restrictions are protectionist measures and
counter to globalization i.e. they prevent the free flow of $$...
o Potential risks/benefits?
+ More competition = better prices, selection, innovation…
- Foreign competition and greater control by large foreign firms =
fewer jobs in Canada? Canadian culture will be lost…
Ethics of Globalization (Chapter 8 – 188-195)
- How to ensure that developing countries benefit from free trade & globalization?
- Allow time for their domestic industries to adapt to multinational competition –
don’t remove trade barriers too quickly!
- Remove tariffs and subsidies protecting industries in developed countries too –
free trade must be fair
- Ensure governments in developing can provide a social safety net to its needy
The Role of Government (Chapter 7)
- Taxation: Revenue – Restrictive Taxes
- Crown Corporations
o Why do we have them?
o What are the benefits and disadvantages of crown corps?
o Which sectors of the economy should be controlled by the Government
and which should be left to the private sector? Health Care
Military/Defense/Law & Order/Corrections
Retail distribution of beverage alcohol (i.e. LCBO)
o Modify Behavior – Imperfect Competition – Public Interest
- Bailouts and Subsidies
o See Exhibit 7.6 p. 156
o Which activities should the government subsidize and why?
o Should the government bailout large corporations that are failing? Why?
- Government Subsidies in a Global Context
Current Trends and Issues
- Should the Canadian government protect Canadian corporations from foreign
ownership? (See Toronto Star Article handout)
o Arguments For:
Core assets and industries should be protected
National security, cultural industries, servicing unprofitable and
Head offices in Canada will ensure that jobs, R&D, spending on
suppliers and related services (law, consltg & acctg firms, IBs…)
o Arguments Against :
Corporations are driven by profit not nationalistic motives