COMMERCE 4SA3 Chapter 6: Chapter 6; political economy of international trade
24 Jan 2019
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Chapter 6 the political economy of international trade. In 2010, china imposed quota on exports of rare earth metals which caused prices to go up for foreign firms, giving china manufacturers a competitive advantage over their foreign rivals. Instruments of trade policy: tariffs; a tax levied on imports (specific vs. ad valorem) Usually done to protect domestic suppliers from foreign compt. One of the biggest subsidies around the world exists in agriculture. New trade theory says this helps compnies in industries where economies of scale is required and can help firms achieve first-mover advantage in competitive industries. Voluntary export restraint is quota on trade imposed by exporting country at request of the importing country"s government. Foreign producers agree in fear of more damaging import tariffs or quotas. Japan agreed to limit their exports of cars into u. s. to 1. 85 million per year in 1985.
