IB 150 Lecture Notes - Lecture 11: North American Free Trade Agreement, Final Good, Havana Conference
31 May 2017
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Document Summary
Political realities have shaped, and continued to shape, the international business practices and the trading system. Business leaders should understand and anticipate the complexities of conducting international business. When a government does not restrict what its citizens can buy from or sell to other country. While free trade is theoretical ideal, many countries have adopted trade policies that restrict imports & increase exports. Protect domestic producers and jobs from foreign competition. Increase foreign markets for products of domestic producers. Specific tariffs a fixed change for each unit of the imported good. Ad valorem tariffs a proportion of the value of the imported good. Domestic producers (at least in the short run) Employees of protected industries keep their jobs. Employees of protected industries who don"t develop new skills. Tariffs are pro-producer and anti-consumer, and reduce overall economic efficiency. Direct restriction on the quantity of a good that may be imported into a country.
