PO329 Lecture Notes - Lecture 2: Ad Valorem Tax, Protectionism, World Trade Organization
Document Summary
Trade policy tools how to promote or restrict trade. When economies were closed and not doing very well, this put a negative connotation on protectionism. Protect our domestic sectors, and limit imports/restrict trade. Tools to temper the ill effects of trade: protect our domestic sectors. Specific or ad valorem: specific tariff is a fixed amount often seen with farming goods. Ex. of for imported fruit from florida for oranges: ad valorem tariff non-fixed price, fluxgates depending on amount of goods. A way that the government makes money: quota. A limit on the quantity of a product to be imported and sold in a foreign market. The limit could be in either volume of goods or value of the total goods. Importing only 100,000 cars from japan or . 5 million worth of cars. Multifibre agreement: an agreement between developing and developed countries, developing countries wanted access to the developed markets, subsidies. A payment to domestic interests? (firms or consumers?)
