BUS-D 270 Chapter Notes - Chapter 7: Protectionism, Asteroid Family, Customs Valuation
Document Summary
Protectionism: governmental actions to influence international trade. All countries seek to influence trade and respond to their economic, social, and political objectives. Proposals on trade regulations spark debate among people who believe they will be affected. They push for trade rules favorable to them. Economic rationales for governmental trade intervention and outcome uncertainties. The unemployed can form an effective pressure group for import restriction. What"s wrong with full employment as an economic objective. May lead to retaliation by other countries. Higher input costs for other industries = less competitive. A negative effect on domestic earnings and employment. May decrease export jobs because of lower incomes abroad. Infant-industry argument: a government should shield an emerging industry from foreign competition by guaranteeing it a large share of the domestic market until it can compete on its own. The infant-industry argument says that production becomes more competitive over time because of: Production costs may never fall enough to create internationally competitive products: problems:
