49 terms


Beggar thy neighbor
, is an expression in economics describing policy that seeks benefits for one country at the expense of others
Cost insurance fright valuation
where ad valorem tariffs are levied as a percentage of the imported commodity's total value as it arrives as its final destination. It includes transportation and insurance costs.
Domestic revenue effect
is the tariff revenue extracted from foreign producers in the form of a lower supply price.
Foreign trade zone
- is an area within the United States where business can operate without the responsibility of paying customs duties on imported products or materials as long as they remain within the area and do moot enter the marketplace.
Free on board
the tariff is applied to a products value as it leaves the exporting country.
Free trade biased sector
comprises of exporting producers, their workers and their suppliers. It also consists of consumers, including wholesalers and retail merchants of imported goods.
Infant industry argument
Thus argument does not rule out free trade, it contents' that for free trade to be meaningful, trading nations should shield their newly developing industries from foreign trade. Otherwise the mature businesses will drive young businesses out of the market.
Level playing field-
-Domestic producers contend that import restrictions should be imposed for foreign businesses to create a level playing field.
Consumption effect
arises from the decrease in consumption it is represented as D on the graph.
Terms of trade effect-
it represents a redistribution of income from the foreign nation to the tariff levying nation because of the new terns of trade.
Tariff escalation
Raw materials are facing lower tariff rates that finished products.
Optimum tariff
When a Nation optimizes its welfare by imposing a tariff rate at which the positive difference between the gains of improving terms if trade and the loss in economic efficiency from the protective effect and the consumption effect are maximum
Anti Dumping duty-
is levied when the US department of commerce determines a class or kind of foreign merchandise being sold at less than fair value and the US International trade commission determines that LFTV are causing a threat to the domestic market.
Buy national policies-
an open discrimination towards foreign suppliers in purchasing decisions.
Corporate average fuel standards (CAFÉ)-
represents the US energy conservation policy. Applying to all passenger vehicles sold in the US. The standards are based on the MPG of the car.
Cost based definition of dumping-
The US commerce department constructs a foreign market value equal to the sum of -
-The cost of manufacturing the merchandise
-General expenses
-Profit on home making sales
-The cost of packing the merchandise
Domestic production subsidy
granted to producers on import competing goods.
Export Quota
Main purpose is to moderate the intensity of international competition allowing less efficient domestic producers to survive.
Export Subsidy
goes to producers of goods that are to be sold overseas.
Global Quota
Permits a specified a specified number of goods.
License on demand schedule
is the most common technique to enforce quotas. Under this system licenses are required to import at the within quota tariff. Before the quota period begins potential importers are invited to apply for import licenses.
Margin of dumping
is calculated as the amount by which the foreign market value exceeds the US price.
Selective Quota
To avoid the problems of a global quota system, import quotas are usually allocated to specific countries
Social Regulation
attempts to correct a variety of undesirable side effects in an economy that relates to health, safety, and the environment- effects that market, left to themselves, often ignore.
Tariff rate quota-
Another restriction used to insulate a domestic industry from foreign competition is the tariff rate quota.
Commodity Credit Corporation (CCC)
Officially supported lending for U.S. exports is also provided by the Commodity Credit Corporation, a government- owned corporation administered by the U.S. department of Agriculture.
Countervailing duty
As viewed by the World Trade Organization, export subsidies constitute unfair competition. Importing countries can retaliate by levying a countervailing duty.
Economic Sanctions
Government-mandated limitations placed on customary trade or financial relations among nations.
Escape clause
provides temporary safeguards (relief) to US firms and workers who are substantially injured from surges in imports that are fairly traded.
Export import bank-
an independent agency of the US government established to encourage the exports of US businesses.
Fast track authority-
devised in 1974, under this provision the president must formally notify congress of his/her intent to enter trade negotiations with another country
General Agreement on Tarrifs and Trade GATT
The first major postwar step toward liberalization of trade on a multilateral basis was the GATT, signed in 1947
Intellectual property rights IPRS
Certain industries and products are well-known targets of pirates, counterfeiters, and other infringes
Kennedy Round
During the period1964-1967, GATT members participated in the so-called Kennedy Round of trade negotiations, named after U.S. president John F. Kennedy, who is issued an initiative calling for the negotiations.
Ministry of economy, trade, and industry (METI)
to implement its industrial policies, in manufacturing, the Japanese government created the METI. It attempts to facilitate the shifting of resources into high-tech industries by targeting specific industries for support.
Most favored nation clause (MFN)
The reciprocal trade agreement act also provided for generalized tariff reductions through the most favored nation clause. This clause is an agreement between two nations to apply tariffs to each other at rates as low as those applied to any other nation having MFN status.
Multifiber Arrangment- (MFA)
quotas were negotiated each year on a country-by-country basis, assigning the quantities of specific textile and apparel items which could be exported from developing countries to the industrial countries.
Normal trade relations-
In 1998, the US gov. replaced the term most favored nation with normal trade relations.
Reciprocal trade agreements act-
In 1934, congress passed the act which changed US trade policies by transferring authority from the congress, which generally favored domestic import- competing producers, to the president, who tended to consider the national interest when forming trade policy.
the escape clause provides temporary safeguards to US firms and workers who are substantially injured from surges in imports that are fairly traded.
Section 301
Section 301 of the trade act of 1974 gives the US trade representatives the authority, subject to the approval of the president, and the means to respond to unfair trading practices by foreign nations.
Smoot- Hawley Act
The high point of U.S. protectionism occurred with the passage of the Smoot- Hawley act in 1930, which US average tariffs were raised to 53 percent on protected imports.
Strategic trade policy
Beginning in the 1980's a new argument for industrial policy gained prominence. The theory behind strategic trade policy is that governement can assist domestic companies in capturing economic profits from foreign competitors.
Tokyo Round
At the Tokyo Round of 1973-1979, signatory nations agreed to tariff cuts that took the across-the board form initiated in the Kennedy Round.
Trade adjustment assistance
Many industrial nations have done this by enacting programs for giving trade adjustment assistance to those who incur hardships because of trade liberalization.
Trade promotion authority
also known as fast-track authority was devised in 1974- under this provision, the president must formally notify congress of his/her intent to enter trade negotiations with another country.
Trade remedy laws-
designed to produce a fair trading environment for all parties engaging in international trade.
Uruguay round
GATT was transformed to World trade organization.
World trade organization
Embodies the main powers of GATT, but its role was expanded to include a mechanism intended to improve GATT'S process of resolving trade among member nations.