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Governmental Influence on Trade

Session 14


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Today’s agenda

• Tariffs and Non-tariff barriers

• Catfish case

• Homework


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Chapter 7Governmental Influence

on Trade


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Chapter 7Instruments of Trade Control

We will illustrate the major

means by which trade is

restricted and regulated


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• Two types of trade controls

those that indirectly affect the amount

traded by directly influencing prices of

exports or imports

those that directly limit the amount of a

good that can be traded

Chapter 7Instruments of Trade Control


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• Tariffs are also known as duties refer to a government levied tax on goods

shipped internationally

• Tariffs may be levied refer to a government levied tax on goods

shipped internationally on goods entering, leaving, or passing

through a country for protection or revenue on a per unit basis or a value basis

export tariffs transit tariffs import tariffs

Chapter 7Tariffs


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• Subsidies direct assistance to companies to make

them more competitive

agricultural subsidies

overcoming market imperfections

valuation problems

Chapter 7Nontariff Barriers:

Direct Price Influencers


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• Aid and loans Tied

Untied

• Customs valuation

• Other direct-price influences

Special fees and requirements

Chapter 7Nontariff Barriers:

Direct Price Influencers


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• Quotas

Limit the quantity of a product that can

be imported or exported in a given time

frame

Voluntary export restraint (VER)

Embargoes

Chapter 7Nontariff Barriers: Quantity Controls


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• “Buy local” legislation

• Standards and labels

• Specific permission requirements

import or export license

• Administrative delays

• Reciprocal requirements

Countertrade or offsets

• Restrictions on services

Chapter 7Nontariff Barriers: Quantity Controls


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Chapter 7Dealing with Governmental Trade Influences

Demonstrate the business

uncertainties and business

opportunities created by

governmental trade policies


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• Companies facing import competition

can: Move abroad

Seek other market niches

Create greater efficiency or superior

products

Try to get governmental protection

Chapter 7Dealing with Governmental Trade Influences


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• Convince decision makers of the

merits of particular policies

• Involve the industry and

stakeholders

• Prepare for changes in the

competitive environment

Chapter 7Tactics For Dealing

With Import Competition


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• Trade restriction changes bring about

winners and losers among countries,

companies, and workers

• Gains to consumers from freer trade

may come at the expense of

companies and workers

• The international regulatory situation

is becoming more complex

Chapter 7Dynamics and Complexity


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Opening caseA Catfish by

Any Other Name…?


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Catfish case

• Read the opening case of Chapter 7

• Gather your team and answer all the

questions

• Make sure that every member of your

team is working…


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Homework

• Read Chapter 7

• Upload your answers per team on BB

for the Catfish case

• Start to prepare the quiz on Chapter 7


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Thank you for

your attention

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