US Trade Policy Flashcards
Define Globalization
integration of national economies through the reduction of trade barriers
What are some key barriers to trade and globalization
tansport costs, tariffs, subsidies
What is the chief effect of competition
enhances competition by broadening playing field for business, kills inefficiency
What are some ways that firms can artificially stay in business in a globalized economy?
1) cheap loans
2) Govt Contracts
3) Tariffs
How are the benefits of globalization distributed?
unequally, some winners and some losers
Why doe states trade?
increases national income/gnenerates wealth, allows for specialization which everyone does on a personal level
States all have a comparative advantage in something even if it doesn’t have the absolute adv
true
what determines which sectors of an economy get the benefits of globalization
it depends on which resources an economy has in abundance (in US its skilled labor)
Who wins the political conflict over trade policy
the consumers have a collective action problem (diffuse benefits and concentrated costs) ex: farmers still get subsidies b/c disproportionate representation in the senate
Congress knows it doesn’t do well with dealing with trade b/c of localized constituency so what did they do?
passed the Recriprocal Trade Agreements Act to give that power temporarily to the President (usually more pro free trade)
What is the contemporary equivalent of the RTTA?
Fast Track authority
What is the Bretton Woods economic order and what caused it
it is a policy of trade liberalization led by orgs like the GATT, IMF, World Bank that emerged post WWII and depression that had the side benefit of fighting communism
What was the GATT
it was a intl agreement that hoped to reduct trade barriers on a recriprocal basis, provided a set of rules that guided negotiations post COld War, HAD NO ENFORCEMENT MECHANISM
What is the WTO
it is the GATT plus an enforcement arm. Has a judicial system that give the plaintiff a lot of dicrecion on where to impose retaliatory tariffs, WTO keeps global economy open by pusinshing states for violating tariff policies
Progress in futher liberalizing trade has stalled lately why?
the developed world hasn’t been pushing for it
WHat is causing the split in the REpublican PArty?
globalization (establishment wants to keep free trade and Trump wants to kill it)
Who is most hurt by globalization and who do they support
uneducated men are hurt my globalization b/c of lost manufacturing, they are support Trump
What is Most Favored Nation Status
a set of nations that a nation gives its lowest possible tariffs to; WTO countries each give each other most favored status
Is Trade policy a partisan issue?
not really, Sanders, Clinton (to a lesser degree),a dn trump all hate liberalization of trade
Some Democrats & most republicans used to like free trade under Clinton and helped to pass NAFTA. Why did ppl used to support it
our identity was tied to free trade as an opposite to communists, 2008 gave people an event to rally behind
What is likely to happen in the Free trade debate now?
likely to stall as politicians don’t want to stake political capital on the hot topic. as more advanced degrees are hurt by globalization, there will be harsher backlash
