Chapter 21 Flashcards
is the policy of protecting domestic industries against foreign competition means of tariffs, subsidies import quotas, or other restrictions placed on import competitors
Protectionism
Tarriffs
taxes that are levied on imported goods with the aims to either increase prices of imported products to the level of domestic prices or raise revenue for the govt
Imported Quotas
limitations on the quantity of products that a country can import
Non tariff Barriers
ways a nation can draw up rules, regulations, inspections and paperwork to make it more costly or difficult to import products
a demand and supply analysis of protectionism shows
that it is not just a matter of domestic gains and foreign losses, but a policy that imposes substantial domestic costs as well
protectionism has been rather a ______ then an _________
norm; expectation
many economists agree that the economy generally benefits from?
free trade
protectionist policies became known as
mercantilism
Great Britain began to abandon its protective tariffs in the 19th century due to their repeal of _____ _____ and other duties on imported goods
Corn Laws
-protectionism _______ the price of protected goods in the domestic market, this causes domestic consumers to ____ ______ and domestic producers to _____ _____
raises; pay more; earn more
How can imports injure workers
can lead to fewer jobs, lower wages and poorer working conditions
Protectionism can save jobs in a specific industry being protected but…
it costs jobs in other unprotected industries
If a firm sells a protected product to other firms, so that other firms must now pay a higher price for a key input, then those firms will lose sales to foreign produces-lost sales=…
lost jobs
The WTO helps create rules for trade between its
164 members
What does the WTO do
-creates opportunities for Canadian workers and businesses through WTO participation
-provide framework
Canada was established into the WTO on
January 1st 1995
What are 3 things workers in low income countries undergo:
- labour under conditions that would be illegal in canada
2.are often paid less than canadian minimum wage
3.have working conditions that may be extremely unpleasant or unsafe
what is a huge concern on globalization towards low skilled low wage workers
high skilled and high wage worker will be the only one benefiting from it, high skilled workers benefit from increased sales or popular products, low skilled workers must compete against EXTREMELY low wage workers for making simpler products
what is a pro and a con of trade
Pro: Trade raises the amount that an economy can produce by letting firms and workers specialize in what the produce most efficiently. Trade will cause the average level of wages in an economy to rise.
Con: Barriers to trade will reduce the average wave levels in an economy
lower wage workers suffer due to protectionism in all industries bc…
they pay higher prices for goods
The _______________ argument for protectionism is that small domestic industries need to be temporarily nurtured and protected from foreign competition so that they can grow into strong competitors.
Infant Industry
a semi connected argument is that domestic industries should be protected from dumping, when foreign companies sell under a fair price and drive domestic firms out of a the market. _____________ is difficult to enforce since it is very difficult to define what a “fair” price is
Anti dumping
_________________ is sometimes invoked for a reason of protectionism because low-income countries typically have lower environmental standards than high-income countries; hey are more worried about immediate basics such as food, education, and healthcare.
Environmental Protection
the __________________ argument for protectionism holds that it is unwise to import certain key products because if the nation becomes dependent on key imported supplies, it could be vulnerable to a cutoff.
National Interest
_________________________________ was a forum in which nations could come together to negotiate reductions in tariffs and other barriers to trade
-was the precursor of the WTO
General Agreement on Tariffs and Trade (GATT)
____________________ is an economic agreement between countries to allow free trade between members without tariffs or quotas
Free Trade Agreement
______________ is an economic agreement between countries to allow free trade in goods, services, labor and financial capital between members while having a common external trade policy
Common Market
____________ is an economic agreement between countries to allow free trade between members, a common external trade policy, and coordinated monetary and fiscal policy
Economic Union
CUSMA stands for
Canada, US, Mexico agreement
CETA stands for
Canada Comprehensive Economic and Trade Agreement
APEC stands for
Asia Pacific Economic Cooperation
The European Trade Agreements are known as..
European Union and European Commission
refers to the exchange of goods and services between countries
International Trade
is when a country can produce a good or service at a lower opportunity cost compared to another country
Comparative Advantage
Benefits of Globalization include:
promoting increased trade, foreign investment, technology transfer, and access to a larger consumer base. it leads to greater product variety and lowering consumer prices
Drawbacks of Globalization include,how can govt address these issues:
job displacement, potential exploitation of labor in developing countries, and loss of cultural identity. Governments can address these challenges through retraining programs, labor laws, and promoting cultural preservation.
Trade barriers such as tariffs (taxes on imports) and quotas (limits on the quantity of imports) can..
hinder international trade, reduce competition, and increase prices for consumers
what are income distribution effects of international trade
-all domestic or international competitive market forces are disruptive causing companies and industries to rise and fall
-Government has a role to play in cushioning workers against the disruptions of the market. However, in domestic markets, it would be unwise to clamp down on foreign trade
-disruption brings economic benefits
