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Trade protectionism (Different stackholders : (Legislation (Free trade…
Trade protectionism
Different stackholders :
Legislation (Free trade argreement ...)
Companies
Countries
Consumers
Economic rationales for governmental intervention
Protecting "Infant industries"
Government have an interest to protect/develop strategic economies
Developing an industrial base
Diversification
Growth in Manufactured goods
Investment inflows
Import Substitution and export-Led Development
Surplus workers
Nation Building
Fighting unemployment
Economic relationships with other countries
Balance of trade adjustments
Trade deficit creates issues for nations. So, gouvernments often uses 2 options than can affect positivly it competitive position broadly :
Relying on fiscal and monetary law in order to have lower prices than others countries
Depreciating or devaluing its currency
Comparable acces to foreign market that foreign companies have to theirs.
Restriction as a Bargaining tool
Price-control
Noneconomic rationales for government intervention
Maintaining essential industries : Government often apply trade restrictions to protect them
Promoting acceptable practices abroad
Maintaining or extending spheres of influence
Preserving national culture
What tools for trade control ?
Tariffs (Duty) : This is the most commun type of control, the goal is to affect the price in order to impact the quantity sold/purchassed
Direct price influences : Subsidies for example have a big influence on the price.
Quantity controls : Quota (Most commun), "Buy local Legislation", Label & standards, Requirements, administrative delays, reciprocal requirements ...
Question : Should government impose trade sanctions ?
Yes : Because due to globalization actions in one country can spill over and affect people from others countries.
No : Lost of revenues for companies, sanctions are not really working (Vietnam example) ...
Case : Doing Business in Singapore
1st place to make business accordint to the world bank
Some companies presents in Singapore : Siemens, Rolls-Royce, Procter and Gamble, Unilever ...
1st case : Vietnam/USA Catfish's production
Commun reaction : USA regulate the flow of fish by taxes.