INTB 1209 Lecture Notes - Lecture 11: Asteroid Family, World Trade Organization, Infant Industry Argument
11 Feb 2016
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Document Summary
While many nations are nominally committed to free trade, they tend to intervene in international trade. The agreement of eu with vietnam for a free trade deal includes the elimination of nearly all tariffs (over 99%). Vietnam will liberalize tariffs over 10-year period and eu to liberalize tariffs over 7-year period. Many goods that vietnam manufactures such as hard drive have low tariffs. There are seven main instruments of trade policies: tariffs: tax levied on imports that effectively raises the cost of imported products relative to domestic products. There are two types of tariffs: specific tariffs, ad valorem tariffs, subsidiary: subsidiary is the government payment to domestic producer. Subsidiary helps domestic producers to compete against low cost foreign products and gain exports markets. A local content requirement can be physical terms in value terms. Dumping is selling goods in a foreign market below their cost of production, or selling goods in for market at below their fair market.
