INBS 250 INBS 250
Popular in Introduction to International Business
Popular in International Business
This 3 page Class Notes was uploaded by Maria Notetaker on Thursday September 15, 2016. The Class Notes belongs to INBS 250 at Montclair State University taught by Nahra in Spring 2015. Since its upload, it has received 9 views. For similar materials see Introduction to International Business in International Business at Montclair State University.
Reviews for INBS 250
Report this Material
What is Karma?
Karma is the currency of StudySoup.
You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!
Date Created: 09/15/16
Ch. 7 - Political Systems of Environment Friday, February 13, 2015 11:07 AM What is the political reality of international trade? Free trade: eliminate tariffs on products and services; eliminate trade barriers (rules and regulations gov. put in place to create obstacles) How do govs intervene in markets? Tariffs: taxes levied on imports that raise the cost of imported products (the friendlier we are with a country, the lower their tariffs) o Specific tariffs: fixed charge for each product o Ad valorem tariffs: percentage we add on a specific product Subsidies: money gov. gives back to specific industries so they can sell the product at a cheaper price (form taxpayers) o Main ex: farming Import Quotas: limit of number of units you can import during the period of one year o Tariff rate quotas o Quota rent Voluntary Export Restraints: "try to limit yourself to that amount we gave you, if you go over the quota, we stop your shipments" Local content requirements: demand that some specific fraction of a good be produced domestically; have to buy raw materials from local market so it will create jobs and industries Administrative Policies: rules and regulations gov. come up with to restrict access to market (to make it easy or complicated for companies to do business) o Policies hurt consumers by limiting choice Antidumping policies (countervailing duties): cannot sell product less than manufacturing or cost of production o Dumping= selling goods in a foreign market below costs of production or selling goods in a foreign market below their "fair" market value Why do govs. intervene in markets? To protect jobs To protect important industries that are related to the security of the country o Ex: steel: US is keeping it because it would impact the wellbeing of the country; don't want other countries to gain technology that will harm us Retaliation for unfair foreign competition: when govs take or threaten to take specific actions, other countries may remove trade barriers; if threatened gov does not back down, tensions can escalate and new trade barriers can be enacted To protect consumers from "dangerous" products: limit "unsafe" products To further the goals of foreign policy: good relationships instead of bad To protect human rights of individuals through trade policy actions * To protect the environment * *common in industrial countries, not developing countries Economic arguments for gov. intervention Infant industry: industry that did not exist in the country and the gov is trying to create o Impose tariffs to increase volume to compete in the marketplace (Brazil put tariffs on imported cars to pressure local businesses to invest/open up plants for cars) General agreement on tariffs and trade (GATT): objective to liberalize world trade ; eliminate tariffs; free access = allow foreign companies to come in and treat them as local companies (rights/no discrimination) ; was not successful WTO was created in 1995 to replace GATT; had a monitoring process and dispute settlement (unlike GATT) ; 160 countries are a part of the WTO
Are you sure you want to buy this material for
You're already Subscribed!
Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'