Types of Government and their impact on Trade

8/7/2019 Types of Government and their impact on Trade

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Government:

A government is the body through which apoliticalunit exercises its authority, controls andadministers public policy, and directs and

controls the actions of its members or subjects.Role: Bind Sovereignty Security Economic Development Maintain Law & Order

Policies Formulation Trade Policy:

It is a governmental policy controllingforeigntrade.


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EconomicRationales

reventing

Unem loyment

rotecting InfantIndustries

romotingIndustrialisation

Im rovingcom etetive

osition

UneconomicRationales

Maintaining

essentialindustries

ealing

it unfriendlycountries

Maintaining or

e

tendings eres ofinfluence

reservingnational identity


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It is a form ofgovernment where in a monarchacts as head of the state within the parametersof a written constitution

Japan --Nippon and NihonWW1 Manchuria WW2

May 1947, Constitutional Monarchy

Prime Minister--Head ofgovernment-- Naoto

KanEmperor - -Head of State -- Emperor Akihito

Legislative--Bicameral Diet --House ofRepresentatives and House of Councillors


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Japanese trade is often called processing trade

Programs to support Exports & Imports:a. Special deduction of export income

b. Develop world class industries

c. Import tariff refund

d. Japan Export-Import Bank

Ban on import of: rice, milk, sugar and sugarcane, and

wheat Despite huge imports offood Tariff duties Consumption Tax

Internal Tax


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Is a member of the G8, APEC, "ASEAN Plus

Three & WTO

Powerful and Impartial Civil Service METI

Easy access to credit and loans with low-

repayment probability

Exchange Rate- Appreciating Yen

Trade Liberalization - Lowering tariffs rates


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Socialism is an economic and political

theory advocating public or common

ownership and cooperative management of

the means of production and allocation ofresources

Government owns the major firms but the

prices is market mechanism driven


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France is a semi presidential republic with its

main ideals expressed in the Declaration of

the Rights of man and of the citizen

Although privatisation is there but Industriessuch as aeronautics, defence, automobiles,

and telecommunications are still with

government


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France is one of the E s major importer and

exporter with everythingfrom raw

commodities to automobiles

In 1992, the Treaty of Maastricht was signed.Member states of the European nion have

established a Community Integrated Tariff

(TARIC) system, where duties are applied to

imports from non-E countries


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Duties levied on imports from non-E

countries, are moderate.

Most raw materials enter duty-free or at low

rates, most manufactured goods are subjectto rates between 5 and 17 percent

France, share common trade and tariff

policies with the rest of the E countries,

has discussed the erection of trade barriersagainst non-E companies and products


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A communist government is a centrally

planned system built on state ownership of

allfactors of production and controlof alleconomic activities.

There is no right to property


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Throughout the reform period, thegovernment reduced tariffs and other tradebarriers, with the overall tariff rate fallingfrom 56% to 15%.

By 2001, less than 40% of imports weresubject to tariffs and only 9 % of import weresubject tolicensing and import quotas.

Trade has increased from under 10% of GDPto 64% of GDP over the same period

The trade policy, allows producers to avoidpaying the Value Added Tax (VAT) since 2002,has resulted in an overdeveloped exportsector of China.


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Apart from import prohibitions China has

continued touse non-tariff border measures

(such as import and export licensing) as

instruments of its trade and industrialpolicies.

China has continued to reform its Customs

transit system to simplify Customs

declaration procedures.Government do impose tariffs as a

mechanism to control imports from other

countries.


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An economic system in which investment in

and ownership of means of production ,distribution, and exchange of wealth is made

and maintained chiefly by private

individuals or corporations, especially as

contrasted to cooperatively or state-ownedmeans of wealth.


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Witnessed Dramatic Change

Lead a world of imports

One of the top 3 exporters

Trade regulated by: Office of the United

States Trade Representative.

The U.S. has agreements in force with 17

countries


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Congress can enact lawsExample:

Establish tariff rates

Implement trade agreements

Provide remedies against unfairly traded importsCongress has delegated some powers to the

Executive Branch

US is a member of several international trade

organizationsPurpose is to come to an agreement on trade

issues with other countries.


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1. Crude oil , 12.10

2.

edi

i

l, de t l

d

r

euti

l

re r tions , .

. P ssenger

rs

,

.2

4. Ot er ouse old goods

, .9

.Computer

essories, .4

6. Automotive partsand accessories ,

7. Cottonappareland ouse old goods, 2.8

8.Computers

, 2.6

9. Telecommunicationsequipment , 2.4

10. Video equipment , 2.


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1. Civilian aircraft includingparts, 7.1

2. Medicinal, dentaland pharmaceuticalpreparations , 4.4

3.Semiconductors

, 3.5

4. Other industrial machines, 2.9

5. Automotive parts andaccessories , 2.8

6. Telecommunicationsequipment , 2.7

7. Passenger cars , 2.6

8. Medicinalequipment , 2.5

9. Electric apparatus , 2.5

10. Plastic materials , 2.4


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The United States

Current Bilateral/Multilateral FTA'

sProposed Bilateral/Multilateral FTA'


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Democracy means a form ofgovernment in

which the supreme power is vested in the

people and exercised directly by their

elected agents under a free electoral system.


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Belief in import substitution

Complex system of licensing and control over

imports through non-fiscal and fiscal barriers.

Trade Policy Reforms one of the major planksof the new economic policies initiated from

July 1991 onwards.

Changes include reduction of trade

barriers, simplifying procedures


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Free repatriation of profits and capital

investment is permitted

Export profits are exempt from income tax

Higher royalty payments of 8% (net of taxes)are permitted on export sales as compared to

5% on domestic sales.

Export commissions upto 10% are also

permissible.


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Inputs required to be imported for export

production are exempted from customs duty

under the Advance License Scheme.

EPCG scheme: allows import of capital goodsat concessional rates of duty, subject to an

export obligation

Export Oriented Units (EOUs) and Export

Processing Zones (EPZs) enjoy specialincentives


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Thank You!


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http://en.wikipedia.org/wiki/Economy_of_the_ nited_States

http://www.economywatch.com/international-trade/usa.html

http://www.suite101.com/content/top-us-imports--

exports-2009-a204269 http://www.bls.gov/news.release/ximpim.nr0.htm

http://www.nationsencyclopedia.com/economies/Europe/France-INTERNATIONAL-TRADE.html

http://www.buyusa.gov/france/en/116.htmlhttp://www.state.gov/r/pa/ei/bgn/4142.htm

http://www.economywatch.com/foreign-direct-investment/countries/japan.html

siteresources.worldbank.org/INTRANETTRADE/.../JapanTradePolicy_eng.doc : Article By Junichi Goto Kobe

niversity

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Types of Government and their impact on Trade