...special preferences to domestic goods and services to enhance the competition. There are two basic ways of trade protectionism, one is tariff barrier, another is called non-tariff barriers, including quotas, subsides and administrative barriers. This essay is to talk about the main ways of protectionism and its definition with some real examples. Tariffs are import taxes, raising the price of imported products to limit the number of imports, causing a contraction in domestic demand and an expansion in domestic supply (Riley, 2006). Normally, the volume of imports is reduced and the government received some tax revenue from the tariff. While, the Section 201 steel tariff is another case. In 2002, US imposed tariffs on imports of certain steel products for three years and one day (Francois & Baughman, 2003). Immediately, the European Union announced that it would impose retaliatory tariffs on the U.S., thus risking the start of a major trade war (Francois & Baughman, 2003). In this way, the price of both sides got higher, made impacts on each other. Steel tariffs caused shortages of imported product and put U.S. manufacturers of steel-containing products at a disadvantage relative to their foreign competitors. As a result, 200,000 Americans lost their jobs to higher steel prices during 2002. In the absence of the tariffs, the damage to steel consuming employment would have been significantly less than it was in 2002 (Francois & Baughman, 2003). Quotas is a type of...
Words: 707 - Pages: 3
...------------------------------------------------------------------------------10-13 Section 5: Conclusion------------------------------------------------------------------------------------13-15 Works Cited-----------------------------------------------------------------------------------------------16 Section 1: Introduction The United States should institute a blanket reform of its international trade policies. Its current protectionist practices are both in violation of current World Trade Organization suggestions and mandates and, far from being beneficial to the American economy, for the most part serve to hurt both American and foreign consumers. There are few American markets not protected in some way by the Federal Government in the form of tariffs, quotas, or domestic subsidies. While these practices are touted as an aid to domestic manufacturing process, true economic analysis shows that most if not all protectionist measures actually serve to limit economic growth. The arguments given to justify protectionism range from the poorly-disguised corporate handout to downright racism, while the few good reasons for it such as to protect 'sunrise' or developing industries do not apply to the United States. Section 2: What is Protectionism? Protectionism, defined simply, is any form of barrier to free trade that a governing body places on a market. By this definition, any trade legislation that the government...
Words: 3525 - Pages: 15
...Steven Wallace Final Research Paper on General Agreement on Tariffs and Trade (GATT) Int 610 Professor S. Dalpour Abstract The history of global trade shows that free, fair, and open trade is not necessarily the norm. If allowed, larger nations would monopolize trade to their advantage and destroy open competition. The purpose of this paper is to review the history of trade to find out the reasoning behind establish a General Agreement on Tariffs and Trade (GATT). To meet this goal, this student will quickly review world history concerning trade, the introduction of GATT, its successes and weaknesses, and the emergence of the World Trade Organization (WTO) as a successor to GATT. From this literary review, I will cite three current examples – within the last decade – on how recent tariffs and trade barriers still affect the United States of America: * 2002 - US Steel tariff * 2007 - Paper tariff on Chinese Paper * 2009 - Violation of North American Free Trade Agreement with Mexico and its effect on US trade Finally, I will give me opinion on whether or not I believe the WTO/GATT is still relevant for 2012 and beyond. Why Was There A Need For A General Agreement on Trade and Tariffs? The history of trade – and protectionism of the trade of goods – is record all the way back to the Roman Empire. Trade at that time was characterized by Roman control over roads and on ships throughout the Mediterranean region. If you wanted to move...
Words: 4309 - Pages: 18
...Flexibility for developing countries, in certain cases extra time allowed for adjustment or full adoption of the rules Embedded liberals tend to support international world trade and World Trade Organization and that free trade is a win-win situation, ‘rising tide lift all boats’. Free and fair trade is needed to grow the world economy and it benefits both rich capitalist as well as poor developing countries. Had WTO not been there, poor developing countries would never be able to stand up against rich capitalist countries. Any member country, rich or poor, which feels its domestic industries have been hurt by foreign imports can take their case to WTO for resolution.WTO also ensures that the member countries do not impose unilateral tariffs against others. Guidelines of WTO allow for flexibility for developing countries as the needs of these countries might...
Words: 1226 - Pages: 5
...– dumping Measure …………. Steel at the Core of US-Japan Trade Tensions …. Competitors in Other Countries Are Destroying an American Success Story … It Must Be Stopped”, scream headlines around the world. International trade theories argue that nations should open their doors to trade. Conventional free trade wisdom says that by trading with others, a country can offer its citizens a greater volume and selection of goods at cheaper prices than it could in the absence of it. Nevertheless, truly free trade still does not exist because national governments intervene. Despite the efforts of the World Trade Organization (WTO) and smaller groups of nations, governments seem to be crying foul in the trade game now more than ever before. We see efforts at protectionism in the rising trend in governments charging foreign producers for “dumping” their goods on world markets. Worldwide, the number of antidumping cases that were initiated stood at about 150 in 1995, 225 in 1996, 230 in 1997 , and 300 in 1998. There is no shortage of similar examples. The Untied States charges Brazil, Japan, and Russia with dumping their products in the US market as a way out of tough economic times. The US steel industry wants the government to slap a 200 per cent tariff on certain types of steel. But car markers in the United States are not complaining, and General Motors even spoke out against the antidumping charge – as it is enjoying the benefits of law – cost steel for use in its auto product...
Words: 842 - Pages: 4
...STEEL INDUSTRIES OF BANGLADESH REPORT ON FOCUS The report “Bangladesh on its way of becoming self sufficient in rod production, export is also a possibility” by Shuvankar karmakar, that was analyzed here, was published in the Daily Prothom Alo, on 17th November, 2012. BACKGROUND Bangladesh Steel industry is emerging as one of the major industrial sectors of the country. It consists of small up to the largest scale of steel melting and re-rolling factories across the country that mostly produce deformed bar rod of different grade (40, 60, 500), angel, channel and coil for the construction industry. Though the history of Steel Industry is not older one but it can make a glorious future. Before 1971 Bangladesh did not have any steel mill and even after the liberation there were only a few steel factories in the country. In 1990s the actual development began in this sector through a revolution. During that period the building constructing agencies or developer companies came forward to build modern infrastructure. Then with the increasing demand, new investors started investing in steel or rod production. In 2012 we have almost 400 mills across the country including Dhaka, Chittagong. Although most of them are manual steel plants, 30 mills among them are automated. Many steel producing companies have gained reputation as a brand. Among them, BSRM, KSRM, Anwar Steel, AK steel, Rahim steel, Abul khayer Group are worth mentioning. Today the highest steel producing company is...
Words: 2119 - Pages: 9
...IB2013b/IB2013c Final Exam (90 mins) MULTIPLE CHOICE QUETIONS (circle the correct answers) 1. The term "gains from trade" describes: a. Producer surplus. b. The fact that when two countries trade, both are better off. c. Profits made by businessmen involved in international trade. d. Consumer surplus. e. The income of middlemen in a transaction. 2. In its most basic form, the gravity model says that the most important factors that describe the amount of trade between countries are a. differences in the amount of workers and physical capital between countries. b. differences in wages and technology between countries. c. the cultural affinity between the countries and the existence or lack of a common language. d. the tariff barriers between the countries and the costs of transportation. e. the amount that the countries produce and the distance between them 3. Evidence shows that f. the amount of trade that a country undertakes is not related to the number of multinational corporations in that country. g. the amount of trade that a country undertakes is not related to its geography. h. the effect of borders is not important when comparing international trade with trade between regions within a country. i. the amount of trade between countries is not related to the cultural affinity between the countries. j. countries farther apart have less trade between them on average. 4. In contrast to 50 years ago, most exports from low and middle...
Words: 1692 - Pages: 7
...Case Analysis – U.S. Tariffs on Tire Imports from China Ramón Alejandro Lomas Iracheta BSM404 International Business Instructor: Dr. Carla Weaver May 24th, 2015 U.S. Tariffs on Tier Imports from China The decision of President Obama supported by the International Trade Commission of imposing a three year tariff to imports of tires from China has caused controversy. The United States Steelworkers argue that the tariff has brought benefits for them, which include more job capacity, increase in production and increase of sales. In the other hand, China called the tariff a “serious case of protectionism” due to the negative economic effects that imports of tires were causing to American employment and domestic production. China argues that while the tariff increases jobs in production sector, it also has a negative effect in jobs of sale sector, now some people who used to sell tires from overseas have lost their job. According to the Business Dictionary (2015) market disruption is “A decline in sales to the extent major economic hardships occur, such as one created by surge in imports at the expense of domestic industry” (p. 1). By following this definition, it can be assumed that the decrease of sales of American tires was caused by the amount of imports of Chinese tires. China is known for its ability of mass production at a low price, many companies opt for choosing China as supplier or workforce, but when it is not controlled, this could cause instability in the...
Words: 1580 - Pages: 7
...the lowest level there is the preferential trade area, this means that the members charge each other lower tariffs than those applicable to non-members; however there is no free movement of goods within the area. A free trade area means that the barriers and quotas to mutual trade are removed. For instance, the members of the North American Free Trade Area (NAFTA), Canada, Mexico and the United States, pledge to do away with the barriers to mutual trade. Unlike a customs union, each member continues to determine its own commercial relations with non-members. Other examples of free trade area are the ones between Mexico and the EU; between Canada and Chile; between the US and Jordan; FREE TRADE AREA This is the preferred option for countries embarking on economic integration and for those unwilling or unable to engage in higher levels of integration. An FTA can be limited to particular sectors, thus retaining a high level of control at the national level and preventing exposure to competition for the other sectors. The authority to decide how third countries are to be treated remains unaffected (independent trade policy) in an FTA. However, rules of origin (ROO) have to be agreed upon among members so as to determine which products can be transferred duty-free. In the case of NAFTA a product has to have been substantially transformed so that a change in tariff classification has occurred, or it must have 50% (62.5% for cars) member-country content to qualify for duty-free...
Words: 1211 - Pages: 5
...the United States went through a massive industrial boom due to the rapid increase of laborers and demand for oil, steel, cars, and other common products. Many of the big business owners developed a monopoly in their field of business, like oil or steel using vertical and horizontal integration methods to minimize production cost with increased speed while keeping prices high. Other factors that helped the industrial boom was rapid growth of the railroad system throughout the US. One of the biggest helps to the industrial boom in the US is the adoption of the vertical and horizontal integration systems. These systems are a type of monopoly where a business would buy all of the contributing factors in the making of their products or buy all of the retail sellers. As explained in “The Genesis of the United States Steel Corporation” by E. S. Meade, vertical integration is when a business would buy every part of the process in making the product. For example, steel industries would buy up all of the mines, to the steel billets and steel rails to minimize the cost of making the product. Horizontal integration is when a business would buy out all of the retail sellers so there would be no competition so they could make lower quality products and increase the price without worry of competition. Andrew Carnegie was the owner of the Carnegie Steel Company, the biggest steel company of the time, he used vertical integration to minimize his production costs. Meanwhile, John D. Rockefeller...
Words: 585 - Pages: 3
...President Donald Trump’s plan to impose tariffs on imports could trigger a trade war. His plans include global tariffs of 25% on steel and 10% on aluminum. Officials worry about the consequences of a trade war and urge the White House to not act on it. Even top Republicans have tried to warn Trump that tariffs are a bad idea. Since then, Trump has tried to renegotiate the Free Trade Agreement with Canada and Mexico because of large trade deficits. U.S. officials were hoping this new approach would help accelerate the process of rewriting the 24 year old trade agreement. But the two countries suggest that the threats from Trump did not settle well with them. Mexico’s economy minister discussed the matter with a U.S representative and overall...
Words: 388 - Pages: 2
...HISTORY South Africa is the southernmost country on the African continent. It has a long history of conflict and human rights issues but it has always been one of the most economically prosperous nations in southern Africa due to its coastal location and the presence of gold, diamonds and natural resources. By the 14th century C.E, the region was settled by the Bantu people who migrated from central Africa. South Africa was first inhabited by Europeans in 1488 when the Portuguese arrived at the Cape of Good Hope. However, permanent settlement did occur until 1652 when the Dutch In following years, French, Dutch and German settlers began to arrive in the region. by the end of the 18th century the British controlled the entire Cape of Good Hope region. In 1961, South Africa became a republic after it withdrew from the British Commonwealth Four years later on May 10, 1994, Mandela was elected as South Africa's first black president and during his time in office he was committed to reforming race-relations in the country and strengthening its economy and place in the world. This has remained the goal of subsequent governmental leaders. ECONOMY South Africa has a mixed economy, the largest in Africa in terms of both nominal GDP (at $375.944 billion) and GDP atpurchasing power parity (at $608.804 billion). It also has a relatively high GDP per capita compared to other countries in Sub-Saharan Africa ($11,750 at PPP as of 2012). Despite this, South Africa is still burdened...
Words: 2466 - Pages: 10
...First Bank of the United States expire, but realized it was difficult to finance a war without the bank, so he chartered the 2nd Bank of the United States James Monroe 1816 and 1820; Democratic-Republican; his time in office is described as "The Era of Good Feelings," notable events include the Missouri Compromise, the establishment of the Monroe Doctrine, the acquisition of Florida from Spain, and several internal improvements such as The Cumberland Road John Quincy Adams 1824; Democratic-Republican; notable events include the creation of the Tariff of 1828 (known as the "Tariff of Abominations") and his support of Alexander Hamilton's American system (tariffs, national bank, and internal improvements) Andrew Jackson 1828 and 1832; Democrat; nicknamed "Old Hickory," notable events include the so-called "bank war" caused by his absolute opposition to the 2nd Bank of the United States, the Nullification Crisis caused by the Tariffs of 1828 and 1832, his policy of Indian removal, and the first attempt to assassinate a president Martin Van...
Words: 1847 - Pages: 8
...A Perspective of Globalization: The Influences of a Capitalist-based Global System The implications of globalization today are inherent. Of note is Leslie Sklair, stating that globalization is based on transnational practices (TNP)s. These, at the highest level of abstraction, are the building blocks of the system. Currently, these practices are encompassed in the global capitalist system, but do not comprehensively define globalization (Lechner 2007). Additionally, key spheres contribute to the current globalization scheme; these spheres are distinguished as economic, political and the cultural-ideology (Lechner 2007). Furthermore, Sklair’s approach differs from the weak/strong heterogeneous or homogeneous approach as outlined by Appelrouth, stating that the interactions of such are more complex than a cut and clear weak vs. strong approach. The economic sphere regards the ability of TNCs to control global capital and material resources. Economics revolves around the idea that resources are scarce, and a current pursuit of allocative efficiency creates a sound economic environment. The more resources any corporation has allows for not only an ability to create a monopoly-like scenario depriving competitors of resources, but also in establishing a larger profit margin achieved through market control. These resources are not limited to natural resources, but also of intellectual property and human resources themselves. Although allocative efficiency is not reached...
Words: 1084 - Pages: 5
...Ethics and morality are relative ( is it ethical to pay bribes) Relativism – Problems * There are no absolutes - murder, slavery, torture, rape OK * What is meant by a society? Sub-societies, country, subsountry, block, indv * Leads to conclusion - each person’s opinion is correct * Nothing that anyone does is morally wrong 2. Egoism Most Widely Used Concept * One ought to act in his or her own self interest * Ethical behavior is that which promotes one’s own self interest * Does not mean should not obey laws - only do so if in self interest * Problem - Externalities associated with private actions - OK to dump toxic wastes as long as don’t get caught * EX: we all have a little of this in us speeding 75 see a cop and slow to 55mph 3. Utilitarianism * The morality of an action can be determined by its consequences * An action is ethical if it promotes the greatest good for the greatest number * Perform Moral Cost Benefit analysis * Benefit> Cost ETHICAL Cost > Benefit UNETHICAL * EX: Harry Truman dropping bomb on Japanese * Problem : How do you quantify the benefits? How do you value benefit and cost * Can lead to unjust consequences, * Restrictions against majority to protect minority is not Utilitarian 4. Deontologism * Derived from the Greek word for Duty * Actions are not justified by their consequences. Factors other than good outcomes determine the rightness...
Words: 4370 - Pages: 18
