Trade Barriers In International Trade

1939 Words 8 Pages
To continue building on a previous milestone, which detailed existing bilatera l free
-
trade ag reements (FTA’s)
“The United States and the Republic of Korea
(ROK)
signed the United
States
-
Korea
Free Trade Agreement (KORUS)
” (Office of United States Trade, n.d.,para.5)
.
Included with in KORUS is the gradually remov al of trade barriers

tariffs
.
Earlier milestone f ocused on facilitation of trade. T his paper will explore the implications of trade barriers
,
defining winners and losers
.
It is imperative to define the various trade barriers that exist within the international market of the ROK
, in particular those that influence trade with the United States (
U.S.
) a nd more
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Trade Barriers: Describe the country’s spec ific trade barriers geared toward foreign MNCs entering the market.
D. Determine the implications of the trade barriers on consumers.
Do these barriers hinder the consumer’s purchasing power within the specific international market? Justify your response.
INT 650

TRADE BARRIERS AND R
ECALCULATING PARAMET
ERS
8
Figure
2
: Price

Liberalization of Import Tariff
Similarly, to the above recalculations for this recalculation exercise, the author will depict current supply and demand, with imposed quota.
Q
uotas are comparable to tariffs; each raises prices and the reduces imports, but the loss of revenue for the government from tariffs is most likely different
.
Figure 3 depicts supply/demand with a quota. The quota is from 20
-
40 units, which means that domestic supply is from 0
-
10 un its and 40
-
70 units, making up the difference of the shifted supply curve. Figure 4 is without quota, which will decrease price and quantity supplied, which increases quantity demand and subsequent trade.
Price Equilibrium &
South Korea (SK) Price w/ o T ar iff
Supply
Demand
Domestic
Price
Price
Quantity
Import
World
Price
Commented
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Between the U.S. and
Commented [D9]:
This section wraps up the paper with implications, conclusions, and a clear demonstration of the knowledge gained and illustrates how well the author can apply the knowledge t o the project assignment requirements.
The last paragraph in particular shows how the author has considered the potential impact of the US presidential election on their project topic.
INT 650

TRADE BARRIERS AND R
ECALCULATING PARAMET
ERS
11
South Korea, tariffs on automobile were eliminated; although, this fact alone with not increase
U.S. imports into South Korea.
The elimination of tariffs and consistent taxes with domestic South
Korean cars manufacturers should motivate
U.S.
firms,
e.g.,
FORD, because the liberalization of trade barriers are beneficial for consumers, FORD, and the auto industry as a whole. South Korean manufactures will continue to maintain a majority, but as the market matures and grows

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