Chapter 7, Government Policy and International trade

___ trade is the economic policy of not discriminating against exports to or important from foreign countries

Free Trade

The infant industry argument for trade intervention states the developing countries need to support new industries until they are strong enough to

Complete globally

Government occasionally protect certain industries like defense related industries for

National Security

A tax on imporants that is levied as a fixed charge per unit of an imported good is called ?

Specific tariff

An advocate of the strategic trade policy would agree that a government should use __ to help promising business that are active in emerging industries

Subsidies

Patents, trademarks and copy rights are designed to protect ___ property

intellectual

A loophole that many countries are countries are exploiting to pursue protection dealing with anti dumping

the vague definition of dumping

Japan imposed a quota on auto exports into the US as a result of pressure from the American government, This action is an example of ?

voluntary export restraint

The basic metals chemicals plastic and machinery and electrical equipment industries account for __ of antidumping actions

the majority - 70 %

Governments implement ___ trade polices that are designed to make it difficult for imports

Administrative

Tariffs rates on __ products are generally much higher than tariffs on manufactured products services

Agricultural

What are two reasons countries should remain focused on opening markets

- because average tariffs on services remains higher than on industrial goods - bc of high tariffs rates on imports of selected good from developing nations into developed nations

What are two components of strategic trade policy

1. governments should subsidize promising domestic firms in emerging industries 2. government should intervine to assist firms in overcoming barriers to entry created by foreign firms due to first mover advantage

For national security reasons, the ___ industry is often protected by the national government

Defense

When manufactures export of a product to another country at a price either below the price charged in its home market or below HS cost of production

Dumping

What are the seven main instruments in trade policy

Tariffs, Subsides, import quotas, voluntary export restraints, local content requirements, admin policies, and antidumping

Protectionism measures in the agriculture industry encourage the over production of products which are then typically purchased by

The government

Ad Valorem tariffs are based on the __ of a product

Value

Under the umbrella of GATT the two sisters bodies of GATS adn TRIPS focus on which two issues?

intellectual property Services