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Chapter 8.docx

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Department
Economics
Course
ECONOM 1051
Professor
George
Semester
Fall

Description
Chapter 8: International Trade I. International trade and the US A. importance of trade to national economy is measured in GDP (its about  10%); while trade is a part of the economy, it matters less to the US than  to other countries because we have such a large domestically traded  market B. imports generally exceed exports although both are steadily up; gap  between imports and exports= trade deficit II. Opposition to International Trade and the WTO A. WTO= World Trade Organization, replaced GATT. Much disapproval with  international trade lies with them. Oversees trade wordwide B. Opposition 1. not all like globalization (argue it ruins culture of individual countries;  plus other countries use child labor and we don’t want to support that) 2. Protectionism= use of trade barriers to shield domestic firms from  foreign competition. Arguments for protectionism: a. saving jobs b. protecting high wages c. protecting infant industries (Infant Industry Argument=US has  start­up companies; they need time to figure their shit out so they  can eventually lower unit prices. We’ll put tariffs on them and  introduce them to the harsh world of international trade when  they’re ready) d. protecting national security­ we shouldn’t rely on other countries  for goods influencing our own national security) 3. some also argue foreign governments use unfair tactic of “dumping”  (se
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