Los Angeles Pierce College American Computers Trade Barriers Discussion I ATTACHED THE CHAPTER BELOW. PLEASE READ FIRST Read Chapter 3, especially the pa

Los Angeles Pierce College American Computers Trade Barriers Discussion I ATTACHED THE CHAPTER BELOW. PLEASE READ FIRST

Read Chapter 3, especially the part about tariff and non-tariff barriers. You must type in your answers by hitting reply below. You do not need to reply to another classmate’s post. There are no extra points for commenting on another person’s post.

Research and briefly write about any one trade barrier that a country imposes on an imported product from another country/ countries. Is this trade barrier good or bad for the imposing country? Explain why or why not?

Here is an Example – The EU (European Union) imposed high standards on US beef, resulting in the region banning US hormone treated beef for several years. The US did not consider this as fair trade. You may support the EU as they have the right to provide good quality products to their consumers. On the other hand, you may support the US as high standards lead to high prices and the EU should probably give their consumers an informed choice.

In the above example, beef is the imported product; standards is the trade barrier; EU is the imposing country/ region

Rubric

Approximately 100 – 130 words

2 points for the type of trade barrier,
2 points for country/ region that is imposing the barrier,
2 points for the imported product on which the barrier is imposed,
3 points for your opinion and reasons – why is it good or bad for the imposing country.
1 point for source/ reference – At least one source of your information; if it’s an online source, then give the url, date and title. You may use examples from your textbook too. CHAPTER 3 – INTERNATIONAL TRADE: INSTITUTIONAL BARRIERS AND FACILITATORS
I.
ARGUMENTS FOR PROTECTIONISM
The arguments below are commonly used against open trade by low-income & middle-income countries.
1) Employment Protection and Protection of Markets with Excess Productive Capacity
This argument addresses markets with high levels of excess labor and underemployment. Trade
barriers are erected to prevent competing multinationals from importing foreign products and to
prevent efficient international companies from taking over local enterprises and firing excess
workers.
2) Infant Industry Arguments
Infant industry arguments allow low-income countries to protect their new industries from
international competitors – i.e., efficient firms with well-known international brands from highlyindustrialized countries.
3) Natural Resources Conservation and Protection of the Environment
Environmental protection is frequently used as an argument to allow governments to impose trade
restrictions aimed at conserving national natural resources. Foreign companies may be blocked from
entering new markets based on environmental-conservation arguments.
4) Protection of Consumers
Protection of the consumer can involve favoring local over international businesses by applying rigid
standards, quality controls, and product origin requirements.
5) National Defense Interests
National defense interests can result in the banning of publications or products that attempt to
destabilize the government or that bring outside influence (Western influence in particular, to nonWestern countries).
II.
TOOLS OF GOVERNMENT PROTECTIONISM: TARIFF AND NONTARIFF BARRIERS
1. Tariffs – Tariffs are defined as taxes imposed on goods entering a particular country in order to protect
local industries (protective), penalize countries not politically aligned with the importing country
(retaliatory), or to generate revenues for the importing country (revenue tariffs.)
2. Non-tariff Barriers – Non-tariff barriers to trade include all other measures (besides taxes/ duties) used to
distort international trade. The following are the most frequently encountered non-tariff barriers:
1) Import Quotas: A maximum quantity of a product that may be imported during a specified period
2) Import Licenses: Nonautomatic licenses are issued on a discretionary basis and are used to restrict
imports of a given product. Automatic Import licenses are granted freely to importing countries, but
may be used for import surveillance and to discourage import surges.
3) Voluntary Import Expansion: Importing country agrees to open its markets to imports, and increase
foreign access to the domestic market to avoid severe trade restrictions; this results in increased
competition and reduced prices in the respective country.
4) Voluntary Export Restraints: Self-imposed export quotas to a particular country in order to avoid
more severe restrictions.
5) Price Controls: Include increasing prices of imports to match minimum prices of domestic products.
• Antidumping duties -to counter imports that are sold as dumped or way below market value.
• Countervailing duties -to counter imports that are subsidized.
• Paratariff measures – increase cost of imports by using a combination of quotas and tariffs.
6) Standards: Environmental, performance, manufacturing and other stds used as barriers, primarily by
highly-industrialized countries, preventing importers from selling products below a certain quality
specification.
7) Local Content Requirements: Mandate that a certain percentage of the products imported are locally
produced. Foreign ownership restrictions are also used to ensure that a certain percentage of the
business in owned by a national firm.
8) Boycott: Initiated by an action group, calls for a ban on consumption of all goods associated with a
particular company and/or country.
9) Embargoes: Prohibition of all business deals with the target country.
10) Sanctions: Punitive trade restrictions applied by a country or group of countries against another for
non-compliance.
III.
INTERNATIONAL TRADE FACILITATORS
Free trade is essential to economic development. One argument for free trade is based on economist David
Ricardo’s theory of comparative advantage. The premise for the comparative advantage argument is that
countries benefit from specialization in an industry in which they have comparative advantage (producing
quickly at a lower cost) and from trading with one another.
The International Trade and Economic Development Organizations
1) World Trade Organization – Has its origins with the General Agreement on Tariffs and Trade;
consists of 164 member countries, provides assistance to developing economies and promotes
regional trade agreements and cooperation in global economy.
2) Group of Eight (G8): Consists of the most industrialized countries (Canada, France, Germany, Italy,
Japan, United Kingdom, and United States) and Russia; acts as a forum for addressing economic and
financial issues around the world.
3) International Monetary Fund and the World Bank: Act as specialized agencies of the United
Nations. IMF acts as a lender of last resort and as a mediator between debtors and creditors. World
Bank is the largest international development bank and assists in economic development projects.
4) United Nations Organizations: The different United Nations organizations promote the economic and
financial welfare of low- and middle-income countries, focusing on developing the industrial,
communication, and transportation infrastructure in these countries.
Government Organizations
United States Department of Commerce with its International Trade Administration offices in each country
of interest; engages in many activities promoting trade and regulates trade by issuing export licenses and
through other methods
Other facilitators of international trade – Foreign Trade Zone (FTZ, also known as a free trade zone)
A tax-free area in a particular country that is not considered part of the respective country in terms of import
regulations and restrictions. FTZs offer advantages to both the host country and to the international firms.

Purchase answer to see full
attachment