international-economicsP教学讲解课件

InternationalEconomics

ByRobertJ.Carbaugh

9thEditionInternationalEconomics

ByRob概况一点击此处输入相关文本内容点击此处输入相关文本内容整体概述概况三点击此处输入相关文本内容点击此处输入相关文本内容概况二点击此处输入相关文本内容点击此处输入相关文本内容概况一点击此处输入相关文本内容点击此处输入相关文本内容整体概international-economicsP教学讲解课件InternationalEconomics

ByRobertJ.Carbaugh

9thEditionChapter1:TheInternationalEconomyInternationalEconomics

ByRobElementsofinterdependenceTrade:goods,services,rawmaterials,energyFinance:foreigndebt,foreigninvestment,exchangeratesBusiness:multinationalcorporations,globalproductionEconomicinterdependence5ElementsofinterdependenceTraForcesdrivingglobalizationTechnologicalchange:ProductionCommunication&informationTransportLiberalizationoftrade&investment:Tariff,non-tariffbarrierreductionsLiberalizedfinancialtransactionsInternationalfinancialmarketsEconomicinterdependence6ForcesdrivingglobalizationTeWavesofGlobalization1stwave:1870-1914Fallingtariffbarriersimprovedtransportation2ndwave:1945-1980AgreementstolowerbarriersagainRichcountrytradespecializationPoornationsleftbehind3rdwave:1980-presentGrowthofemergingmarketsinternationalcapitalmovementsregainimportanceEconomicinterdependence7WavesofGlobalization1stwaveExportsofgoodsandservicesaspercentofGrossDomesticProduct,2001EconomicinterdependenceCountry Exports(%ofGDP) Imports(%ofGDP)Netherlands 68% 62%Norway 48 30SouthKorea 46 41Canada 45 39Germany 35 34France 29 27UnitedKingdom 28 30Mexico 28 30UnitedStates 11 14Japan 11 108ExportsofgoodsandservicesLeadingtradingpartnersoftheUnitedStates,2000Economicinterdependence

ValueofUS ValueofUSCountry exports($bill.) imports($bill.)Canada $202.4 $250.1Mexico 125.2 147.9Japan 98.4 165.3Germany 45.2 74.3France 30.6 40.6Italy 16.4 31.0Netherlands 28.9 15.0Belgium/Luxembourg 17.9 12.8China(2011)

122.2

324.5

9LeadingtradingpartnersofthInterdependence:ImpactOverallstandardoflivingishigherAccesstorawmaterials&energynotavailableathomeAccesstogoods&componentsmadelessexpensivelyelsewhereAccesstofinancingandinvestmentnotavailableathomeInternationalcompetitionencouragesefficiencyEconomicinterdependence10Interdependence:ImpactOverallInterdependence:Impact(cont’d)Otherimpacts-good&badCurtailsinflationarypressuresathomeLimitsdomesticwageincreasesMakeseconomyvulnerabletoexternaldisturbancesLimitsimpactofdomesticfiscalpolicyoneconomyEconomicinterdependence11Interdependence:Impact(cont’Comparativeadvantagemeans:Iftherelativecostofmakingtwoitemsisdifferentintwocountries,eachcangainbyspecializingintheoneitmakesmostcheaply-eachhasacomparativeadvantageinthatproductEvencountriesthatmakenothingcheaplycanbenefitfromspecializationComparativeadvantage12Comparativeadvantagemeans:IfCommonfallaciesofinternationaltrade"Tradeiszero-sum"-tradecanbringbenefitstobothpartners"Importsbad,exportsgood"-ifyoubuynothingfromothercountries,theyhavenoincometobuyfromyou"Tariffsandquotassavejobs"-cuttingimportsmakesithardertoexport,sootherjobsarelostEconomicinterdependence13CommonfallaciesofinternatioCompetitiveness&tradeMainobjectiveofanynationistogeneratehighandrisingstandardoflivingNonationcanefficientlymakeeverythingitselfInternationaltradeallowscountriestofocusonproducingwhattheymakeefficientlyInefficientsectorswillbesqueezedoutSectorsopentocompetitionbecomemoreefficientandproductiveComparativeadvantage14Competitiveness&tradeMainobUpsanddownsofglobalizationAdvantagesProductivityincreasesfasterwhencountriesproduceaccordingtocomparativeadvantageGlobalcompetitionandcheapimportskeeppriceslowandinflationatbayAnopeneconomyencouragestechnologicaldevelopmentandinnovationwithideasfromabroadJobsinexportindustriespaymorethanthoseinimport-competingindustriesFreemovementofcapitalgivestheUSaccesstoforeigninvestmentandkeepsinterestrateslowEconomicinterdependence:globalization15UpsanddownsofglobalizationUpsanddownsofglobalizationDisadvantagesMillionsofUSjobslosttoimportsorproductionabroad;thosedisplacedfindlower-payingjobsMillionsofotherAmericansfeargettinglaidoffWorkersfacepressureforwageconcessionsunderthreatofhavingthejobsmoveabroadServiceandwhite-collarjobsarejoiningblue-collaronesinbeingvulnerabletomovingoverseasUSworkerscanlosetheircompetitivenesswhenfirmsbuildstate-of-the-artfactoriesinlow-wagecountries,makingthemasproductiveasplantsintheUSEconomicinterdependence:globalization16UpsanddownsofglobalizationInternationalEconomics

ByRobertJ.Carbaugh

9thEditionChapter2:FoundationsofModernTradeTheoryInternationalEconomics

ByRobHistoricaldevelopmentoftradetheoryMercantilismRegulationtoensureapositivetradebalanceCritics:possibleonlyforshortterm;assumesstaticworldeconomyAbsoluteadvantage(AdamSmith)CountriesbenefitfromexportingwhattheymakecheaperthananyoneelseBut:nationswithoutabsoluteadvantagedonotgainfromtradeComparativeadvantage(DavidRicardo)Nationscangainfromspecialization,eveniftheylackanabsoluteadvantageFoundationsoftradetheory18HistoricaldevelopmentoftradAbsolute&ComparativeAdvantageComparativeadvantageAbsoluteadvantage:eachnationismoreefficientinproducingonegood OutputperlaborhourNation Wine

ClothUnitedStates 5bottles 20yardsUnitedKingdom 15bottles 10yardsComparativeadvantage:theUShasanabsoluteadvantageinbothgoods OutputperlaborhourNation Wine

ClothUnitedStates 40bottles 40yardsUnitedKingdom 20bottles 10yards19Absolute&ComparativeAdvantaRicardo’sComparativeAdvantageinmoneypricesComparativeadvantage

Cloth (yards) Wine (bottles)Nation Labor

Wage Quant. Price Quant. PriceUS 1hr $20/hr 40 $0.50 40 $0.50UK 1hr £5/hr 10 £0.50 20 £0.25UK 1hr $8 10 $0.80 20 $0.40(at$1.6=£1)20Ricardo’sComparativeAdvantagProductionpossibilitiesscheduleGeneralizestheorytoincludeallfactors,notjustlaborShowscombinationsofproductsthatcanbemadeifallfactorsareusedefficientlySlope,ormarginalrateoftransformation,showstheopportunitycostofmakingmoreofonegood(howmuchofonegoodmustbegivenuptomakemoreofanother)Comparativeadvantage21ProductionpossibilitiesschedMarginalRateofTransformationComparativeadvantage22MarginalRateofTransformatioProductionpossibilitiesschedules:constantopportunitycostsComparativeadvantage23ProductionpossibilitiesschedSupplyschedules:constantopportunitycostsComparativeadvantage24Supplyschedules:constantoppTradingunderconstantopportunitycostsComparativeadvantage25TradingunderconstantopportuProductiongainsfromspecialization:constantopportunitycostsComparativeadvantage

Autos

Wheat Autos

Wheat

Autos

WheatUS 40 40 120 0 80 -40Canada 40 80 0 160 -40 80World 80 120 120 160 40 40

Before After NetGain Specialization Specialization (Loss)26ProductiongainsfromspecialiConsumptiongainsfromtrade:constantopportunitycostsComparativeadvantage

Autos

Wheat Autos

Wheat

Autos

WheatUS 40 40 60 60 20 20Canada 40 80 60 100 20 20World 80 120 120 160 40 40

Before After NetGain Trade Trade (Loss)27Consumptiongainsfromtrade:CompletespecializationunderconstantopportunitycostsComparativeadvantage28CompletespecializationunderChangingcomparativeadvantageComparativeadvantage29ChangingcomparativeadvantageTraderestrictionsandgainsfromtradeComparativeadvantage30TraderestrictionsandgainsfProductionpossibilitiesscheduleunderincreasingcostsIncreasingopportunitycosts31ProductionpossibilitiesschedSupplyscheduleunderincreasingcostsIncreasingopportunitycosts32SupplyscheduleunderincreasiTradingunderincreasingcosts:USIncreasingopportunitycosts33TradingunderincreasingcostsTradingunderincreasingcosts:CanadaIncreasingopportunitycosts34TradingunderincreasingcostsProductiongainsfromspecialization:increasingopportunitycosts

Autos

Wheat Autos

Wheat

Autos

WheatUS 5 18 12 14 7 -4Canada 17 6 13 13 -4 7World 22 24 25 26 3 3

Before After NetGain Specialization Specialization (Loss)Increasingopportunitycosts35ProductiongainsfromspecialiConsumptiongainsfromtrade:increasingopportunitycosts

Autos

Wheat Autos

Wheat

Autos

WheatUS 5 18 5 21 0 3Canada 17 6 20 6 3 0World 22 24 25 27 3 3

Before After NetGain Trade Trade (Loss)Increasingopportunitycosts36Consumptiongainsfromtrade:InternationalEconomics

ByRobertJ.Carbaugh

9thEditionChapter3:InternationalEquilibriumInternationalEconomics

ByRobIndifferencecurvesFinalpatternoftradedependsnotjustonsupply,butalsoondemand-whichisdeterminedbyincome&individualtastesTastescanbeshowngraphicallywithindifferencecurves,whichshowthevariouscombinationsoftwogoodsthatgiveaconsumerthesametotallevelofsatisfactionBringingdemandintothemodel38IndifferencecurvesFinalpatteAconsumer’sindifferencemapBringingdemandintothemodel39Aconsumer’sindifferencemapBIndifferencecurves(cont’d)IndifferencecurveshaveanegativeslopeKeepingsatisfactionconstantmeansgivingupsomeofonegoodformoreofanotherIndifferencecurvesareconvexAstheconsumergetsmoreofonegood,sheislesswillingtogiveupwhatisleftoftheotherTherateofsubstitutingonegoodforanotherisshownbytheslopeofthecurve,themarginalrateofsubstitutionBringingdemandintothemodel40Indifferencecurves(cont’d)InIndifferencecurves(cont’d)“Higher”indifferencecurves(thosefartherfromtheorigin)representgreaterlevelsofsatisfactionIndividualpreferencescannotreallybeaddedupintoa“communityindifferencecurve”butitisusefultoimaginethattheycanforthepurposesoftradetheoryBringingdemandintothemodel41Indifferencecurves(cont’d)“HIndifferencecurvesandint’l.tradeBringingdemandintothemodel42Indifferencecurvesandint’l.Basisfortrade,gainsfromtradeBringingdemandintothemodel43Basisfortrade,gainsfromtrEquilibriumterms-of-tradelimitsInternationalequilibrium44Equilibriumterms-of-tradelimTheoryofReciprocalDemand(Mill)Actualtradingpricesdependontheinteractionoftradingpartners’demandsFinaltermsoftradewillbeclosertothedomesticpriceratioofthenationwithstrongerdemandfortheimportedgoodAppliestonationsofequaleconomicsize,whichwillsharegainsnearlyequallySmallnationstradingwithlargeonescanreceivethebulkofthegainsfromtradeInternationalequilibrium45TheoryofReciprocalDemand(MOffercurves:supplyanddemandInternationalequilibrium46Offercurves:supplyanddemanOffercurves:supplyanddemandInternationalequilibrium47Offercurves:supplyanddemanEquilibriumtermsoftradeInternationalequilibrium48EquilibriumtermsoftradeInteChangingequilibriumtermsoftradeInternationalequilibrium49ChangingequilibriumtermsofImmiserizinggrowthImpactoftrade50ImmiserizinggrowthImpactoftInternationalEconomics

ByRobertJ.Carbaugh

9thEditionChapter4:TradeModelExtensionsandApplicationsInternationalEconomics

ByRobFactorendowmenttheory(Heckscher-Ohlin)Comparativeadvantageisexplainedentirelybydifferentnationalsupplyconditions,especiallyresourceendowmentsNationsexportproductsthatuseinputswhicharerelativelyabundant(cheap)athome,andimportproductswhichneedinputswhicharerelativelyscarce(expensive)athomeWhyrelativepricedifferentials?52Factorendowmenttheory(HecksFactorendowmenttheory:assumptionsNationsallhavethesametastesandpreferences(sameindifferencecurves)TheyusefactorinputswhichareofuniformqualityTheyallusethesametechnologyWhyrelativepricedifferentials?53Factorendowmenttheory:assumComparativeadvantageaccordingtofactorendowmenttheoryFactorendowmentmodelAutarkyequilibrium54ComparativeadvantageaccordinComparativeadvantageaccordingtofactorendowmenttheoryFactorendowmentmodelPost-tradeequilibrium55ComparativeadvantageaccordinFactorendowmenttheory:implicationsFactorpriceequalizationTheshiftwithineachnationtowardsuseofcheaperfactors,andawayfromexpensiveones,leadstomoreequalfactorprices(iffactorsaremobile)DistributionofincomeTradechangesdomesticdistributionofincomeasdemandfordifferentfactorschangesTestsoffactorendowmenttheoryEmphasizetheimportanceofvarietiesofdifferentfactors(suchashumancapital)andaccountingforchangesinresourceendowment;otherexplanationsarealsoimportantFactorendowmentmodel56Factorendowmenttheory:impliDoestradeworseninequality?TradetheorysuggeststhatcountrieswithabundantskilledlaborwillimportgoodswhicharemadewithunskilledlaborEquilibriumwageratiosforskilled/unskilledlaborareaffectedbytradeandtechnologychange,immigration,andeducation&trainingEvidencesuggeststhattradecontributesrelativelylittletowageinequality,comparedtotechnologicalchangeandotherfactors;bettereducationandtrainingarepotentialsolutionsDistributionofincome57Doestradeworseninequality?TEconomiesofscale&specializationEconomiesofscaleprovideincentivesforspecialization,sinceperunitcostsgodownasproductionincreasesTradeprovidesalargerpotentialmarketforproducts,makinghigherproductionlevelspossibleBringingtheoryclosertoreality58Economiesofscale&specializEconomiesofscaleasbasisfortradeEconomiesofscale59EconomiesofscaleasbasisfoTrade&specializationunderdecreasingcostsEconomiesofscale60Trade&specializationunderdOtherextensionsofthetheoryOverlappingdemandsIntra-industrytradeProductcyclesDynamiccomparativeadvantage-industrialpolicyBringingtheoryclosertoreality61OtherextensionsofthetheoryTrade&theenvironmentEnvironmentalregulationcanleadtoapolicytradeoffIncreasedcostscanreducecomparativeadvantageofregulatedindustryPublicreceiveshealthandenvironmentalbenefitsConcernthatpollutingindustrieswouldmovetopoorcountrieswithlessregulationButstudiesindicatethatenvironmentalruleshaveasmallroleininvestmentlocationdecisionsPolluter-paysprinciple:incentivetofindwaystoreducepollutionatleastcostBringingtheoryclosertoreality62Trade&theenvironmentEnvironTradeeffectsofpollution-controlregulationsTrade&theenvironment63Tradeeffectsofpollution-conFreetradeunderincreasingcostsTransportationcostsNotransportationcosts64FreetradeunderincreasingcoFreetradeunderincreasingcostsTransportationcostsTransportationcostsof$2000perauto65FreetradeunderincreasingcoSpecificfactortheoryLooksattheincomedistributioneffectsoftradeintheshortrun,whensomefactorinputsarenotmobileamongsectorsIndicatesthatworkersmaybebetterorworseoff,dependingonpreferencesPredictsthatownersoffactorsusedinexportindustriesgainfromtrade,whileownersoffactorsusedinimport-competingindustrieswilllosefromtradeBringingtheoryclosertoreality66SpecificfactortheoryLooksatRelativepricesandthespecificfactormodelBringingtheoryclosertoreality67RelativepricesandthespecifInternationalEconomics

ByRobertJ.Carbaugh

9thEditionChapter5:TariffsInternationalEconomics

ByRobWhyrestricttrade?Benefitsoffreetradecomeinthelongterm,andareusuallyspreadwidelyacrosssocietyCostsoffreetradearefeltrapidlyandareusuallyconcentratedinspecificsectorsoftheeconomyTariffs69Whyrestricttrade?BenefitsofDefiningtariffsAtariffisatax(duty)leviedonproductsastheymovebetweennationsImporttariff-leviedonimportsExporttariff-leviedonexportedgoodsastheyleavethecountryProtectivetariff-designedtoinsulatedomesticproducersfromcompetitionRevenuetariff-intendedtoraisefundsforthegovernmentbudget(nolongerimportantinindustrialcountries)Tariffs70DefiningtariffsAtariffisaTypesoftariffSpecifictariffFixedmonetaryfeeperunitoftheproductAdvaloremtariffLeviedasapercentageofthevalueoftheproductCompoundtariffAcombinationoftheabove,oftenleviedonfinishedgoodswhosecomponentsarealsosubjecttotariffifimportedseparatelyTariffs71TypesoftariffSpecifictariffEffectiverateofprotectionTheimpactofatariffisoftendifferentfromitsstatedamountTheeffectivetariffratemeasuresthetotalincreaseindomesticproductionthatthetariffmakespossible,comparedtofreetradeDomesticproducersmayuseimportedinputsorintermediategoodssubjecttovarioustariffs,whichaffectsthecalculationTariffs72EffectiverateofprotectionThEffectiverateofprotection(cont’d)Whentariffratesarelowonrawmaterialsandcomponents,buthighonfinishedgoods,theeffectivetariffrateonfinishedgoodsisactuallymuchhigherthanitappearsfromthenominalrateThisisreferredtoastariffescalationTariffs73Effectiverateofprotection(Avoidingandpostponingtariffs(US)ProductionsharingandspecialtreatmentforforeignassemblyusingdomesticcomponentsBondedwarehousesForeigntradezonesTariffs74AvoidingandpostponingtariffTariffwelfareeffectsConsumersurplusThedifferencebetweenthepricebuyerswouldbewillingtopayandwhattheyactuallypayProducersurplusTherevenueproducersreceiveabovetheminimumamountrequiredtoinducethemtoproduceagoodTariffs75TariffwelfareeffectsConsumerConsumerandproducersurplusTariffs76ConsumerandproducersurplusTTarifftradeandwelfareeffectsWelfareeffectsoftariffs77TarifftradeandwelfareeffecTarifftradeandwelfareeffectsWelfareeffectsoftariffs78TarifftradeandwelfareeffecWhopaysforimportrestrictions?DomesticconsumersfaceincreasedcostsLowincomeconsumersareespeciallyhurtbytariffsonlow-costimportsOverallnetlossfortheeconomy(deadweightloss)ExportindustriesfacehighercostsforinputsCostoflivingincreasesOthernationsmayretaliate,furtherrestrictingtradeTariffeffects79WhopaysforimportrestrictioArgumentsfortraderestrictionsJobprotectionProtectagainstcheapforeignlaborFairnessintrade-levelplayingfieldProtectdomesticstandardoflivingEqualizationofproductioncostsInfant-industryprotectionPoliticalandsocialreasonsReasonsfortariffs80ArgumentsfortraderestrictioPoliticsofprotectionism“Supply”ofprotectionism(tradepolicy)dependson:thecosttosocietyofrestrictingtradethepoliticalimportanceoftheimport-competingindustriesMagnitudeoftheadjustmentcostsfromfreetradePublicsympathyforthosesectorshurtbyfreetradeReasonsfortariffs81Politicsofprotectionism“SuppPoliticsofprotectionism“Demand”forprotectionismdependson:Theamountoftheimport-competingindustry’scomparativedisadvantageThelevelofimportpenetrationThelevelofconcentrationintheaffectedsectorThedegreeofexportdependenceinthesectorReasonsfortariffs82Politicsofprotectionism“DemaInternationalEconomics

ByRobertJ.Carbaugh

9thEditionChapter6:NontariffTradeBarriersInternationalEconomics

ByRobImportquotasQuotasarearestrictiononthequantityofagoodthatmaybeimportedinanyoneperiod(usuallybelowfree-tradelevels)Globalquotasrestrictthetotalquantityofanimport,regardlessoforiginSelectivequotasrestrictthequantityofagoodcomingfromaparticularcountryTypesofnon-tariffbarriers84ImportquotasQuotasarearestImportquota:trade&welfareeffectsTypesofnon-tariffbarriers85Importquota:trade&welfareEffectsofaquotaonsugarimportsTypesofnon-tariffbarriers86EffectsofaquotaonsugarimComparingtariffsandquotasTypesofnon-tariffbarriers87ComparingtariffsandquotasTyTariff-ratequotaThetariff-ratequotaisatwo-tieredtariffAspecifiednumberofgoods(uptothequotalimit)maybeimportedatone(lower)tariffrate,whileimportsinexcessofthequotafaceahighertariffrateTypesofnon-tariffbarriers88Tariff-ratequotaThetariff-raTariff-ratequota:trade&welfareeffectsTypesofnon-tariffbarriers89Tariff-ratequota:trade&welOrderlymarketingagreementsMarketsharingpactsignedbytradingpartnersIntendedtoprotectlessefficientdomesticproducersUsuallyinvolvevoluntaryexportrestraints,orexportquotasRecenttradenegotiationshaverestrictedtheuseoftheseagreementsTypesofnon-tariffbarriers90OrderlymarketingagreementsMaEffectsofavoluntaryexportquotaTypesofnon-tariffbarriers91EffectsofavoluntaryexportDomesticcontentrequirementsRulesthatrequireacertainpercentageofaproduct’stotalvaluetobeproduceddomesticallyOftenhastheeffectofforcinglower-pricedimportstoincludehigher-costdomesticcomponentsorbeassembledinahigher-costdomesticmarketTypesofnon-tariffbarriers92DomesticcontentrequirementsRDomesticcontent:trade&welfareeffectsTypesofnon-tariffbarriers93Domesticcontent:trade&welfSubsidiesDomesticsubsidyPaymentsmadetoimport-competingproducerstoraisethepricetheyreceiveabovethemarketpriceExportsubsidyPaymentsandincentivesofferedtoexportproducersintendedtoraisethevolumeofexportsTypesofnon-tariffbarriers94SubsidiesDomesticsubsidyTypesSubsidies:trade&welfareeffectsTypesofnon-tariffbarriers95Subsidies:trade&welfareeffSubsidies:trade&welfareeffectsTypesofnon-tariffbarriers96Subsidies:trade&welfareeffDumpingThepracticeofsellingaproductatalowerpriceinexportmarketsthanathome(orexportingatpricesbelowproductioncost)Sporadicdumping-toclearunwantedinventoriesorcopewithexcesscapacityPredatorydumping-toundermineforeigncompetitorsPersistentdumping-reapinggreaterprofitsbyengaginginpricediscriminationTypesofnon-tariffbarriers97DumpingThepracticeofsellingOtherNTBsGovernmentprocurementpoliciesSocialregulations(health,environmentalandsafetyrulescanalsorestricttrade)SeatransportandfreightrestrictionsTypesofnon-tariffbarriers98OtherNTBsGovernmentprocuremeInternationalEconomics

ByRobertJ.Carbaugh

9thEditionChapter7:TradeRegulationsandIndustrialPoliciesInternationalEconomics

ByRobTheUSandinternationaltradeSmoot-HawleyTariffAct(1930)HighpointofUSprotectionismReciprocalTradeAgreementsAct(1934)Introduced“mostfavorednation”(MFN)clause(nowcalled“normaltraderelations”)GeneralAgreementonTariffsandTrade[GATT](1947)WorldTradeOrganization(1995)Traderegulation100TheUSandinternationaltradeGATT-PostwartradeliberalizationFoundedontheprincipleofnon-discrimination,including:"NormalTradeRelations"treatmentNationaltreatmentofimportedgoodsIncludedtradedisputeresolutionmechanismsCommittedsignatoriestousetariffsratherthanquotasTraderegulation101GATT-PostwartradeliberalizGATT-Postwartradeliberalization(2)StartedregularnegotiationstoreducetariffsandNTBsExceptionsallowednationstosidesteptheruleswhentheyfeltthreatened,withoutabandoningtheentireprocessTraderegulation102GATT-PostwartradeliberalizGATTnegotiationsEarlybilateralagreementsKennedyRound(1964-67)-firstmulti-lateralnegotiations;focusontariffcutsTokyoRound(1973-79)-focusonloweringnon-tariffbarriersUruguayRound(1986-93)-coverednewissueareas(intellectualproperty,services,agriculture),includeddevelopingnationsTraderegulation103GATTnegotiationsEarlybilaterGATTbecomesWTOGATTagreementbecameWorldTradeOrganizationinJanuary1995WTOmembersmustadheretoallagreementsnegotiatedunderGATT(notpickandchoose)Coverstradeingoods,services,intellectualpropertyandinvestmentWTOstrengthensGATT'sdispute-settlementmechanismsTraderegulation104GATTbecomesWTOGATTagreementControversyoverWTOWorriesaboutinfringementonnationalsovereigntyConcernabouttradeliberalizationunderminingenvironmentalprotectionWTObecameatargetforbroaderoppositionto"globalization"Traderegulation105ControversyoverWTOWorriesabUStraderemedylawsEscapeclauseCountervailingdutiesAnti-dumpingdutiesUnfairtradepractices(Section301)ProtectionofintellectualpropertyTradeadjustmentassistanceTraderegulation106UStraderemedylawsEscapeclaEffectsofdumping,subsidies,andremediesTraderegulation107Effectsofdumping,subsidies,Effectsofdumping,subsidies,andremediesTraderegulation108Effectsofdumping,subsidies,US“industrialpolicy”BroadpoliciestofostereconomicgrowthAidtotargetedsectorsAgriculture,ship-building,energy,technology,manufacturing(autos,forexample),etc.TariffprotectionofdecliningsectorsExportpromotionandfinancingExport-ImportBankCommodityCreditCorporationKnowledgebasedgrowthpolicyIndustrialpolicy109US“industrialpolicy”BroadpoJapan’sindustrialpolicyTradeprotectionandsubsidies(especiallyearlyon)AssistancetotargetedsectorsShipbuilding,steel,autos,machinetools,high-technologyMinistryofInternationalTradeandIndustry(MITI)totargetaidtopromisingsectorsItisunclearhowmuchofJapan’ssuccesscanbeattributedtogovernmentassistanceIndustrialpolicy110Japan’sindustrialpolicyTradeStrategictradepolicyResponsetocompetitioninsectorswithimperfectcompetition-smallnumberofproducers,eachlargeenoughtoaffectmarketpriceSubsidiescangivetheadvantagetodomesticmanufacturersoverforeignonesCriticsarguethatitistoodifficulttodeterminewhereassistancemakeseconomicsenseIndustrialpolicy111StrategictradepolicyResponseWelfareeffectsofstrategictradepolicyIndustrialpolicy112WelfareeffectsofstrategictEconomicsanctionsTradesanctionsFinancialsanctionsSuccessofsanctionsdependson:NumberofnationsimposingsanctionsNatureoftiesbetweentargetandimposingnationsExtentofpoliticaloppositionintargetnationCulturalfactorsintar