Podcast
Questions and Answers
What is a common tool used in industrial policies?
What is a common tool used in industrial policies?
- Currency devaluation
- Wage controls
- Tariffs on all imports
- Subsidies for R&D or production (correct)
Import restrictions are not part of industrial policies.
Import restrictions are not part of industrial policies.
False (B)
Name one challenge faced by governments in implementing industrial policies.
Name one challenge faced by governments in implementing industrial policies.
Balancing protectionism with free trade principles
The ________ is responsible for resolving trade disputes between member countries.
The ________ is responsible for resolving trade disputes between member countries.
Match the following terms with their definitions:
Match the following terms with their definitions:
What was one of the major consequences of the Smoot-Hawley Act in 1930?
What was one of the major consequences of the Smoot-Hawley Act in 1930?
The Most-Favored-Nation (MFN) clause allows for unequal tariff treatment among trading partners.
The Most-Favored-Nation (MFN) clause allows for unequal tariff treatment among trading partners.
What year was the World Trade Organization (WTO) established?
What year was the World Trade Organization (WTO) established?
The U.S. shifted from protectionism to __________ after World War II.
The U.S. shifted from protectionism to __________ after World War II.
Which of the following is a key function of the WTO?
Which of the following is a key function of the WTO?
Match the trade terms with their correct definitions:
Match the trade terms with their correct definitions:
Which measure can be taken if a foreign government subsidizes its exports?
Which measure can be taken if a foreign government subsidizes its exports?
Transparency in trade policies is essential for avoiding arbitrary changes in tariffs.
Transparency in trade policies is essential for avoiding arbitrary changes in tariffs.
Flashcards
Industrial Policy
Industrial Policy
Government actions to support specific sectors, like tech or renewables, for long-term gain.
Industrial Policy Tools
Industrial Policy Tools
Methods like subsidies, tax breaks, or import limits to aid specific industries.
Trade Regulations Challenges
Trade Regulations Challenges
Finding the balance between protecting domestic industries and fostering global trade, potentially causing disputes.
Trade War Risk
Trade War Risk
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WTO Role
WTO Role
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Trade Regulations
Trade Regulations
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Smoot-Hawley Act
Smoot-Hawley Act
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GATT
GATT
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Most-Favored-Nation (MFN)
Most-Favored-Nation (MFN)
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Safeguards
Safeguards
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Countervailing Duties (CVDs)
Countervailing Duties (CVDs)
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Anti-Dumping Duties
Anti-Dumping Duties
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Study Notes
Trade Regulations and Industrial Policies
- Trade Regulations: Laws & policies governing international trade (tariffs, quotas, restrictions).
- Industrial Policies: Government strategies promoting specific industries (growth & protection from foreign competition).
Historical Context of US Trade Policy
- Pre-1930s: High tariffs protected US industries (e.g., Smoot-Hawley Act, worsened Great Depression).
- Post-WWII: Shift toward freer trade via agreements like GATT.
Principles of GATT
- Nondiscrimination: Most-Favored-Nation (MFN) clause—equal tariff treatment for all trading partners.
- Freer Trade: Reduction of tariffs & non-tariff barriers, permissible restrictions for specific reasons (health, safety).
- Predictability: Binding tariffs, transparent policies for stability.
- Multilateral Negotiations: Among members to reduce barriers (e.g., Uruguay Round).
World Trade Organization (WTO)
- Successor to GATT, established in 1995.
- Key Functions: Administers trade agreements, facilitates negotiations, settles disputes via the Dispute Settlement Body.
- Membership: 164 member countries.
Trade Remedies and Protection Measures
- Safeguards: Temporary measures (quotas) protecting from import surges causing significant harm (e.g., Chinese textile imports).
- Countervailing Duties (CVDs): Imposed on subsidized imports, compensating domestic industries, a 3-stage process.
- Petition filed alleging subsidies and injury.
- Commerce Department calculates subsidy amounts.
- ITC determines if subsidies caused harm to domestic market.
Anti-Dumping Policies
- Dumping: Foreign producers sell below cost or domestic price to gain market share.
- Anti-dumping duties: Counteracts dumping, protecting domestic industries from unfair competition.
Industrial Policies
- Purpose: Support strategic industries with future potential (e.g., technology, renewable energy).
- Tools: Subsidies (R&D, production), tax incentives, import restrictions (infant industry protection).
Challenges of Trade Regulations & Industrial Policies
- Balancing protectionism vs. free trade principles.
- Potential for trade wars (retaliation from trading partners).
- Ensuring WTO compliance whilst prioritizing national interests
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Description
Explore the complexities of trade regulations and industrial policies, focusing on their historical context in US trade policy. Learn about significant events like the Smoot-Hawley Act and the evolution toward the World Trade Organization (WTO), including principles established under GATT.
