tailieunhanh - Lecture International trade and investment: Chapter 6 - John Gionea

Chapter 6 - Instruments of trade and investment policies. The main goals of this chapter are to: Undertake an historical overview of main government policies that have influenced international trade, examine the major types of barriers that are currently affecting international trade and investment, examine the major types of export-enhancement measures and their impact on international business. | Chapter 6: Instruments of Trade and Investment Policies International Trade Policies FREE TRADE PROTECTIONISM The Trade Policy pendulum 4 -1 TOPIC PLAN: Protectionist Trade policies prior to World War 2 Barriers to Trade and non-tariff barriers,barriers to services etc. Export Enhancement Measures Subsidies Financial assistance Marketing assistance etc. Arguments pro and against protection The “Pendulum” of trade policy: Between Free Trade and Protectionism Mercantilism (16th century) Trade “Laissez-Faire” David Ricardo (early 19th century): Free trade Great Depression: Neo-Mercantilism Protectionism up in the US,UK,France etc. Trade Liberalisation after World War 2 GATT,IMF,World Bank, OECE (OECD) Two groups of trade policy instruments Protection measures Barriers to trade in goods and services Export Enhancement Measures Barriers to trade and investment Tariff barriers Non-tariff barriers (. quotas, standards, procurement policies) Export restrictions Export restrictions Barriers to trade in services Financial limits (. exchange controls, profit remittance limits) Limits on FDI entry and operations Trade Barriers:Tariff Barriers Tax imposed on imported physical goods; Effects of an indirect tax Tariffs - oldest form of trade policy Specific-Ad valorem- Compound duties Good for government Good for producers But reduces efficiency Bad for consumers Measuring Tariff Schedules -Unweighted Average- A=10% B=5% C=8% D=7% 10+5+8+7 UWA=--------------= 4 Measuring Tariff Schedules -Weighted Average- ATR=()+ () + ()+ ()= 1+3+ Product Imp’s ID(%) US$m. A 100 10 B 600 5 C 150 8 D 150 7 WEIGHTS:A(),B() C(),D() Price effects of an import duty A rise in domestic prices of less than the amount of the duty (. when a large trading country like the US can influence world schedules of foreign products are inelastic). Price rise equal to the amount of the duty . | Chapter 6: Instruments of Trade and Investment Policies International Trade Policies FREE TRADE PROTECTIONISM The Trade Policy pendulum 4 -1 TOPIC PLAN: Protectionist Trade policies prior to World War 2 Barriers to Trade and non-tariff barriers,barriers to services etc. Export Enhancement Measures Subsidies Financial assistance Marketing assistance etc. Arguments pro and against protection The “Pendulum” of trade policy: Between Free Trade and Protectionism Mercantilism (16th century) Trade “Laissez-Faire” David Ricardo (early 19th century): Free trade Great Depression: Neo-Mercantilism Protectionism up in the US,UK,France etc. Trade Liberalisation after World War 2 GATT,IMF,World Bank, OECE (OECD) Two groups of trade policy instruments Protection measures Barriers to trade in goods and services Export Enhancement Measures Barriers to trade and investment Tariff barriers Non-tariff barriers (. quotas, standards, procurement policies) Export