US Trade Policy

Question 1

Define Globalization

Answer 1

integration of national economies through the reduction of trade barriers

Question 2

What are some key barriers to trade and globalization

Answer 2

tansport costs, tariffs, subsidies

Question 3

What is the chief effect of competition

Answer 3

enhances competition by broadening playing field for business, kills inefficiency

Question 4

What are some ways that firms can artificially stay in business in a globalized economy?

Answer 4

1) cheap loans
2) Govt Contracts
3) Tariffs

Question 5

How are the benefits of globalization distributed?

Answer 5

unequally, some winners and some losers

Question 6

Why doe states trade?

Answer 6

increases national income/gnenerates wealth, allows for specialization which everyone does on a personal level

Question 7

States all have a comparative advantage in something even if it doesn’t have the absolute adv

Answer 7

true

Question 8

what determines which sectors of an economy get the benefits of globalization

Answer 8

it depends on which resources an economy has in abundance (in US its skilled labor)

Question 9

Who wins the political conflict over trade policy

Answer 9

the consumers have a collective action problem (diffuse benefits and concentrated costs) ex: farmers still get subsidies b/c disproportionate representation in the senate

Question 10

Congress knows it doesn’t do well with dealing with trade b/c of localized constituency so what did they do?

Answer 10

passed the Recriprocal Trade Agreements Act to give that power temporarily to the President (usually more pro free trade)

Question 11

What is the contemporary equivalent of the RTTA?

Answer 11

Fast Track authority

Question 12

What is the Bretton Woods economic order and what caused it

Answer 12

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

Question 13

What was the GATT

Answer 13

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

Question 14

What is the WTO

Answer 14

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

Question 15

Progress in futher liberalizing trade has stalled lately why?

Answer 15

the developed world hasn’t been pushing for it

Question 16

WHat is causing the split in the REpublican PArty?

Answer 16

globalization (establishment wants to keep free trade and Trump wants to kill it)

Question 17

Who is most hurt by globalization and who do they support

Answer 17

uneducated men are hurt my globalization b/c of lost manufacturing, they are support Trump

Question 18

What is Most Favored Nation Status

Answer 18

a set of nations that a nation gives its lowest possible tariffs to; WTO countries each give each other most favored status

Question 19

Is Trade policy a partisan issue?

Answer 19

not really, Sanders, Clinton (to a lesser degree),a dn trump all hate liberalization of trade

Question 20

Some Democrats & most republicans used to like free trade under Clinton and helped to pass NAFTA. Why did ppl used to support it

Answer 20

our identity was tied to free trade as an opposite to communists, 2008 gave people an event to rally behind

Question 21

What is likely to happen in the Free trade debate now?

Answer 21

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