EC239 Lecture Notes - Lecture 12: Protectionism, Chlorofluorocarbon, General Agreement On Tariffs And Trade
Document Summary
It is profitable for 1 firm to produce, & whichever does gets a head start due to some advantages, & will have the entire market. If a subsidy is introduced, profit will likely increase by an amount > the subsidy itself by deterring the entry of a foreign firm. Thus, gov. policy strategically shifts profit from the foreign firm to the domestic firm: stp criticisms, special interest groups may dictate which industry is to be subsidized. There is risk of making the economy worse off w a costly misjudgement. 12. 3 globalization & the environment: ongoing dispute about the effects of international trade on the environment & regarding the. Wto once again ruled against the us, but the us was still allowed to make it necessary for those countries to use turtle-safe nets as long as adequate notice & consultation were pursued.
