20: Globalization and Protectionism
- Page ID
- 181252
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\(\newcommand{\avec}{\mathbf a}\) \(\newcommand{\bvec}{\mathbf b}\) \(\newcommand{\cvec}{\mathbf c}\) \(\newcommand{\dvec}{\mathbf d}\) \(\newcommand{\dtil}{\widetilde{\mathbf d}}\) \(\newcommand{\evec}{\mathbf e}\) \(\newcommand{\fvec}{\mathbf f}\) \(\newcommand{\nvec}{\mathbf n}\) \(\newcommand{\pvec}{\mathbf p}\) \(\newcommand{\qvec}{\mathbf q}\) \(\newcommand{\svec}{\mathbf s}\) \(\newcommand{\tvec}{\mathbf t}\) \(\newcommand{\uvec}{\mathbf u}\) \(\newcommand{\vvec}{\mathbf v}\) \(\newcommand{\wvec}{\mathbf w}\) \(\newcommand{\xvec}{\mathbf x}\) \(\newcommand{\yvec}{\mathbf y}\) \(\newcommand{\zvec}{\mathbf z}\) \(\newcommand{\rvec}{\mathbf r}\) \(\newcommand{\mvec}{\mathbf m}\) \(\newcommand{\zerovec}{\mathbf 0}\) \(\newcommand{\onevec}{\mathbf 1}\) \(\newcommand{\real}{\mathbb R}\) \(\newcommand{\twovec}[2]{\left[\begin{array}{r}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\ctwovec}[2]{\left[\begin{array}{c}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\threevec}[3]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\cthreevec}[3]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\fourvec}[4]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\cfourvec}[4]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\fivevec}[5]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\cfivevec}[5]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\mattwo}[4]{\left[\begin{array}{rr}#1 \amp #2 \\ #3 \amp #4 \\ \end{array}\right]}\) \(\newcommand{\laspan}[1]{\text{Span}\{#1\}}\) \(\newcommand{\bcal}{\cal B}\) \(\newcommand{\ccal}{\cal C}\) \(\newcommand{\scal}{\cal S}\) \(\newcommand{\wcal}{\cal W}\) \(\newcommand{\ecal}{\cal E}\) \(\newcommand{\coords}[2]{\left\{#1\right\}_{#2}}\) \(\newcommand{\gray}[1]{\color{gray}{#1}}\) \(\newcommand{\lgray}[1]{\color{lightgray}{#1}}\) \(\newcommand{\rank}{\operatorname{rank}}\) \(\newcommand{\row}{\text{Row}}\) \(\newcommand{\col}{\text{Col}}\) \(\renewcommand{\row}{\text{Row}}\) \(\newcommand{\nul}{\text{Nul}}\) \(\newcommand{\var}{\text{Var}}\) \(\newcommand{\corr}{\text{corr}}\) \(\newcommand{\len}[1]{\left|#1\right|}\) \(\newcommand{\bbar}{\overline{\bvec}}\) \(\newcommand{\bhat}{\widehat{\bvec}}\) \(\newcommand{\bperp}{\bvec^\perp}\) \(\newcommand{\xhat}{\widehat{\xvec}}\) \(\newcommand{\vhat}{\widehat{\vvec}}\) \(\newcommand{\uhat}{\widehat{\uvec}}\) \(\newcommand{\what}{\widehat{\wvec}}\) \(\newcommand{\Sighat}{\widehat{\Sigma}}\) \(\newcommand{\lt}{<}\) \(\newcommand{\gt}{>}\) \(\newcommand{\amp}{&}\) \(\definecolor{fillinmathshade}{gray}{0.9}\)- 20.0: Introduction
- This page examines the competitive landscape of the U.S. flat-panel display market, focusing on trade policy and protectionism driven by political and social motives. It highlights the effects of international trade on jobs and wage conditions, alongside concerns regarding competition from lower-income countries and environmental standards.
- 20.1: Protectionism- An Indirect Subsidy from Consumers to Producers
- This page discusses protectionism, emphasizing government policies like tariffs and import quotas that restrict trade to protect domestic industries. Examples from U.S.-China trade highlight the costs and benefits, such as higher prices for consumers and potential job losses. It also shows the impact of U.S. sugar protectionism, which raises prices for consumers but benefits domestic producers. While Brazilian producers gain, local consumers lose out.
- 20.2: International Trade and Its Effects on Jobs, Wages, and Working Conditions
- This page discusses the impact of international trade on labor standards and conditions, highlighting disparities between developed and low-income countries. While trade can improve wages and job prospects, it may also lead to increased competition for low-skilled workers, affecting wages negatively. The U.S. minimum wage contrasts sharply with labor compensation in countries like Pakistan, raising ethical concerns about trade practices.
- 20.3: Arguments in Support of Restricting Imports
- This page discusses arguments for restricting imports, including environmental protection, consumer safety, and national security. It highlights the risk of a "race to the bottom" in environmental standards and the potential costs of protectionism for consumers. Globalization's environmental challenges can be mitigated with safeguards, and wealthier nations can aid in improving standards without resorting to trade restrictions.
- 20.4: How Governments Enact Trade Policy- Globally, Regionally, and Nationally
- This page explores the evolution of global trade through the World Trade Organization (WTO) and General Agreement on Tariffs and Trade (GATT), detailing regional agreements like the EU and NAFTA. It discusses a historical trend towards reduced trade barriers, the impact of protectionism, and recent challenges affecting trade policy.
- 20.5: The Tradeoffs of Trade Policy
- This page examines the complexities of international trade within a market-oriented economy, noting its potential for productivity gains and consumer benefits alongside challenges for some workers and firms. It argues against protectionism, advocating for policies that mitigate trade's negative impacts while maintaining its advantages.
- 20.6: Key Terms
- This page explores trade concepts, including anti-dumping laws, economic agreements (common markets, unions, free trade), and their role in facilitating trade. It addresses issues like market disruptions from innovation, dumping, protectionism, import quotas, dependency on foreign imports, nontariff barriers, and environmental standards. It also emphasizes the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO) as key platforms for trade regulation negotiations.
- 20.7: Key Concepts and Summary
- This page examines the impact of protectionism on trade, employment, and labor standards, highlighting how tariffs and quotas can raise domestic prices and shift jobs towards comparative advantage industries. While protectionism aims to support infant industries and address environmental issues, it can be ineffective and often has broader income distribution effects. The text emphasizes the need for government support for workers amidst the disruptions caused by evolving trade policies.
- 20.8: Self-Check Questions
- This page presents discussion prompts on international trade, covering tariffs, subsidies, and trade barriers. It highlights how tariff reductions boost imports and lower prices, the adverse effects of agricultural subsidies on foreign producers, and the mixed impacts of trade barriers on different industries.
- 20.9: Review Questions
- This page discusses protectionism and international trade, including its benefits, tools, and effects on prices, jobs, and wages across industries. It covers challenges in protecting infant industries, the concept of dumping, consumer safety standards, and arguments for national interest. The text also examines trends in trade barriers, international treaties, and the balance of gains and losses from trade, alongside potential government support for adversely affected parties.
- 20.10: Critical Thinking Questions
- This page examines trade barriers such as tariffs and quotas, their effects on prices, workers, and industries. It discusses the reasons for government intervention despite negative consequences, the significance of labor standards, and infant industry protection.
- 20.11: Problems
- This page explores trade scenarios involving Thailand and Japan in camera production, Malawi's coffee industry seeking tariff protection, and Pepperland's steel exports to the Land of Submarines. It addresses the calculation of equilibrium prices and quantities with and without trade, the impact of tariffs on Malawi's coffee sector, and the effects of import quotas on consumers and producers in the Land of Submarines, highlighting dynamics of trade and protectionist policies.