Introduction

Question 1

What are the main trends/developments in trade policy?

Answer 1

Increasing liberalization from 1970 to 2008 to smooth the operation of GVC, from there increasing nationalism and protecionism, which hampers global trade due to more political uncertainty.

Question 2

What is localization measures? and what does it mean?

Answer 2

local content requirement - requirement to have local labor or use local parts and components.

Question 3

What is the effect of Local content requirement on firms?

Answer 3

Remove the flexibility
limit the use of cross-border supply chain
hampering efficiency and potentially increasing costs
delaying production

Question 4

What is the recent revolution of tariffs?

Answer 4

Developed countries apply lower tariffs
Developed countries export tariffs are slightly higher than their import tariffs
overall, tariffs across all regions are relatively stable
An increase in tariffs in developed countries around 2019 due to the china-US trade war.

Question 5

is tariff symmetric?

Answer 5

No, tariff restrictiveness is often not symmetric, being less restrictive within the same region.

Question 6

What is trade escalation?

Answer 6

The practice of imposing higher tariffs on processed goods than on raw materials from which they are produced. It provides on incentive for local production.

Question 7

What has the trend been for FDI?

Answer 7

Liberazation of FDI entry and ownership rules, but FDI subject to increasingly more restrictions – particularly localization measures