Int. Bus. Ch 6

Front 1

Tariff

Back 1

a tax levied by governments on imports or exports

essentially pro government, pro producer, and anti-consumer

Front 2

Tariff Pros

Back 2

Raises government revenues
Protects local industry

Front 3

Tariff Cons

Back 3

Harms some groups

Unintended consequences (domestic companies raise their own prices)

Front 4

subsidy

Back 4

government financial assistance to a domestic producer
ex. cash grants, low-interest loans, tax breaks

AGRICULTURE

Front 5

Subsidy con

Back 5

Protects inefficient firms (ex. Brazillian auto industry)

Promotes ecess production

Front 6

Subsidy pro

Back 6

Help firms achieve large economies of scale

Help firms achieve first-mover status

Front 7

Import Quota

Back 7

Restrictions on import quantities

ex. US importation of Cheese

Front 8

Voluntary Export Restraint (VER)

Back 8

variant of import quota

ex. US Toyota quota, Toyota switches to expensive vehicals, creates trend in American car purchases

Front 9

Local Content Requirement

Back 9

requires that some specific fraction of a good be produced domestically; Protects local jobs

ex. The Buy America Act: government agencies must give preference to American products unless theres a significant price difference

Front 10

Administrative trade policies

Back 10

Rules designed to restrict imports or boost exports (focus on health, safety, environmental concerns...)

ex. France "inspecting" Japanese VCRS one by one by one...

Front 11

Dumping

Back 11

Selling goods in a foreign market for less than their cost of production or below their fair market value

Front 12

Antidumping policies

Back 12

Designed to punish firms that engage in dumping, thus protecting domestic producers from unfair foreign competition

Front 13

Reasons for protectionism (Political)

Back 13

1. Protecting jobs and industries
2. National Security
3. Retaliation
4. Protecting consumers
5. Furthering foreign policy objectives (H-B Act)
6. Protecting human rights

Front 14

Reasons for protectionism (Economic)

Back 14

1. Infant Industry Agreement (1972- Alexander Hamilton)
2. Strategic trade policy

Front 15

Helms-Burton Act

Back 15

1996: allows Americans to sue foreign firms that use Cuban property confiscated from them during Cuba's 1959 revolution

Front 16

Uruguay Round

Back 16

8th round of GATT negotiations
Focus on tariff reductions, intellectual property, and agriculture
Creation of the WTO