Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
56 Cards in this Set
- Front
- Back
|
effective tariff rate
|
indicates the actual level of protection, signifies the total increase in domestic productive activities that an existing tariff structure makes possible. how much more expensive domestic production can be to still compete - sometimes inefficient producers
|
|
|
tariff escalation
|
tariffs are higher on intermediate/finished products than primary resource commodities (tariff rises at each stage of production) -- devel countries get less tariff revenue bc their exports = cash crops
|
|
|
outsourcing
|
aspects of product's manufacture moved offshore.
|
|
|
offshore assembly provision
|
favorable tariff to finished goods assembled abroad so long as their components were made in the importing country
|
|
|
bonded warehouse
|
method of postponing import duties - duty free temporary import storage, tariff applied when goods are withdrawn.
|
|
|
foreign trade zone
|
method of postponing import duties, site within importing country where foreign merchandise is imported without customs entry/surveillance or excise taxes, not a US customs territory.
|
|
|
consumer surplus
|
area below demand curve above equilibrium price - difference btw what a buyer WOULD pay and what they DO pay
|
|
|
produce surplus
|
area above supply curve and below equilibrium price - revenue producers receive over and above minimum amt required to induce them to supply a good
|
|
|
small nation
|
price taker, faces a constant world price level for imports, its tariffs do not influence world price. tariffs raise the home price of imports by the full duty -- consumer surplus takes brunt, wastes resources
|
|
|
large nation
|
price maker. some of the tariff is paid by the foreign importer and does not all fall on the consumer
|
|
|
revenue effect
|
amount of tariff revenue that goes to govt (imports x tariff)
|
|
|
protective effect
|
extra amount of domestic production afforded by the tariff (often inefficient producers with higher productivity costs)
|
|
|
consumption effect
|
loss to consumers
|
|
|
prohibitive tariff
|
no imports, completely protects even inefficient domestic industry. contradicts comp adv...tariff raises price to domestic equil price
|
|
|
scientific tariff
|
seeks to equalize the cost between a foreign product and the domestic product
|
|
|
NTBs
|
non tariff barriers to trade...labeling and packaging requirements, import quotas, subsidies, DESIGNED TO REDUCE IMPORTS WITHOUT TARIFFS
|
|
|
import quota
|
physical restriction on the quantity of goods imported during a specific time period - lower than what would happen with free trade
quotas are worse than tariffs bc they RAISE prices after quota is met, bc more of the good cant be imported and to induce more suppliers you need to raise prices. |
|
|
import license
|
specifies the amt of imports allowed
|
|
|
global quota
|
limits imported goods worldwide, imports a specific amt and then stops, no specific country
|
|
|
selective quota
|
allocated to a specific country - shift the supply curve, govts must allocate limited imports among all importers
|
|
|
deadweight loss
|
protective (area b) + consumption effect (area d)
|
|
|
tariffication
|
phasing out of import quotas to be replaced by tariffs (motion by WTO)
|
|
|
tariff rate quota
|
allows a specified number of goods to be imported at one tariff rate, and then any further goods are subject to a higher tariff
|
|
|
export quotas
|
voluntary export restraint agreement to modify the intensity of intl competition
|
|
|
domestic content requirements
|
limits outsourcing by stipulating that a minumum % of a product's total value be produced domestically if the product wants to be exempt from tariffs and be considered DOMESTIC.
|
|
|
subsidies
-domestic subsidy -export subsidy |
provides domestic firms with a cost advantage, they can market at a P lower than actual cost considerations...granted by govts to domestic producers to improve trade competitiveness - tax concessions, insurance arrangements, loans
|
|
|
dumping
|
international price discrimination - foreign buyers are charged lower prices than domestic buyers...prices higher where demand is inelastic, lower where demand is elastic
|
|
|
sporadic dumping
|
firm disposes of excess inventory by selling abroad at a lower price than at home, result of misfortune/poor planning by firm -- negative impact on import competing producers in foreign countries
|
|
|
predatory dumping
|
producer temporarily lowers p abroad to eliminate import-competition, and then once monopoly is established producer raises P --
|
|
|
persistency dumping
|
indefinite, producer consistently sells abroad at a lower P than at home
|
|
|
anti-dumping duty
|
levied when believed foreign producer is selling product at less than fair P - ensures level playing field
|
|
|
margin of dumping
|
amt by which the foreign market value exceeds the P at which it is being sold in the importing country
|
|
|
price based definition of dumping
|
margin of dumping determined by comparing the P of the obj in one country against the P for the same product in another
|
|
|
cost based definition of dumping
|
foreign market value = cost of manufacture + gen expenses + profit on home market + packaging costs
|
|
|
"buy national"
|
govt discrimination against foreign suppliers in purchasing decisions
|
|
|
social regulation
|
attempts to correct undesirable side effects in an economy that relate to health/safety/environment
|
|
|
countervailing duty
|
offsets dumping by resetting initial P values -- hurts consumer surplus
|
|
|
reciprocal trade agreements act
|
trade liberalization -- negotiating authority to prez
generalized reduction |
|
|
most favored nation clause (normal trade relations)
|
agreement btw 2 nations to apply tariffs to ea other as low as those applied to any other trading partner
**industrial nations can still grant preferential tariffs to devel countries not given to industrial nations **nations belonging to trade areas can maintain tariffs against nonmembers not levied against other members (EU, NAFTA) |
|
|
GATT
|
general agreement on tariffs and trade - 1947, decreased trade barriers
-nondiscrimination = normal trade relations, comp advantage governs trade -national treatment principle - nations must treat other nations industries as favorably as domestic industries once they enter the market -public good - avail to everyone -settlement of trace disputes -tariffication |
|
|
kennedy round
|
1964-1967, lower tariffs, NTBs addressed
|
|
|
tokyo round
|
1973-1979, customs valuation, import licensingm government procurement, antidumping
|
|
|
uruguay round
|
1986-1993, addresses IRPs, tariff cuts, phase out quotas
|
|
|
WTO
|
1995 - replaces GATT, IGOm headq = geneva, investements, service, reverse protectionism
-bound tariffs -trade disputes -reduce national sovereignty? -improves access to markets |
|
|
trade promotion authority
|
prez formally notifies congress of intent to inter into trade negotiation, and then does so in a specific time period
|
|
|
countervailing duties
|
against export subsidies, increases the P of imports to a fair market value - paid by the importer
|
|
|
anti-dumping duties
|
combat P discrimination, lowers consumer welfare bc ^ P of imports
|
|
|
IRPs
|
intellectual property rights - register with govt
-patents, copyrights, trademarks inventions, ideas, products, processes |
|
|
trade adjustment assistance
|
reverse the effects of free trade (those adversely affected)
-income support beyond normal unemployment -job training -allowances for job search/relocation |
|
|
wage insurance
|
compensate ppl whose jobs are lost to free trade, alternative to protectionism
|
|
|
industrial policy
|
enhance competitiveness of domestic producers, formal govt efforts to enhance the devel of specific industries
-agricultural policy -defense spending -export promotion/financing -- marketing, tech help, sponsor overseas trade fairs |
|
|
strategic trade policy
|
1980s
govt can assist domestic companies in capturing econ profits from foreign competitors - imperfect competition bc alters terms of competition to favor domestic ocmpanies -support for strategic industries import to future domestic economic growth |
|
|
economic sanctions
|
govt restricts trade for domestic/foreign policy objectives -- impair economic capabilities of target nation to force nation to succumb to objectives...tariffs, boycotts, limitation on lending/aid
factors influencing success: -# of nations imposing sanction (multilateral = more effective) -degree to which the target nation has economic or political ties with the imposing nation -extent of political opposition in the target nation -cultural factors in the target nation |
|
|
price-specie-flow doctrine
|
positive balance of trade is temporary - an export surplus will eventual stabilize, domestic prices will rise above import prices
david hume |
|
|
labor theory of value
|
labor is the only factor of production and the cost of a good depends only on the amount of labor required to produce it
|
|
|
theory for reciprocal demand
|
john stuart mill
actual terms of trade are determined by the relative strength of ea country's demand for the other's product |
