PSCI 3325 Lecture Notes - Lecture 2: Reciprocal Tariff Act, Microsoft Onenote, North American Free Trade Agreement
27 Jan 2017
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Thursday, november 17, 2016 12:05 pm: background: economics and politics. Mercantilism: focus on exports, don"t have a lot of imports. Comparative advantage: allow trade as freely as possible, each country will specialize in what they do best, trade to get things you don"t do ef ciently, maximize aggregate wealth worldwide. Harm to losers is visible, but bene ts to winners are spread out. Losers tend to be able to get organized and argue against it. Hard to take the gains most people experience to compensate losers. In the 1970s, democrats started arguing against unfair trade past: changed once we instituted the income tax, now it can be looked at in an economic sense instead of raising money for government. Initial gatt involved 23 countries, limited to tariffs on manufactured goods: much wider range of interests and countries to deal with, reducing tariffs is only one part of the issue, non-tariff barriers, subsidizing industries, selective enforcement of regulations.
