Exam 7: Government Policy and International Trade

After the Uruguay Round of GATT negotiations extended global trading rules to cover trade in services, the first two industries targeted for reform by the WTO were

Compare and contrast import quotas and voluntary export restraints.

Trade wars benefit countries with interventionist governments.

Strategic trade policy suggests that in industries where the existence of substantial scale economies implies that the world will profitably support only a few firms, countries may predominate in the export of certain products simply because they had firms that were able to

Export tariffs are far less common than import tariffs.

Unlike other trade policies, local content regulations tend to benefit consumers and not producers.

According to the Buy America Act, if a company wishes to win a contract from a U.S. government agency to provide some equipment, it must ensure that at least 51 percent of the product by value is manufactured in the United States. This is an example of

Specific tariffs are

Discuss the economic reasons for government intervention in markets.

Summarize Paul Krugman's arguments against adopting a trade policy that benefits domestic firms at the expense of other countries.