Controversies in Trade Policy

Arguments for an Activist
1. Usually means government policies that actively support export industries through subsidies.
2. Usually means government policies that actively support export industries through subsidies.
Trade and Culture
1. Some activists believe that trade destroys culture in other countries.
  1. This belief neglects the principle that we should allow people to define their culture through the choices that they make, not through standards set by others.
Trade and the Environment
1. A pollution haven is a place where an economic activity that is subject to strict environmental controls in some countries is moved to (sold to) other countries with less strict regulation.
Imperfect Competition and Strategic Trade Policy
1. Imperfectly competitive industries are typically dominated by a few firms that generate monopoly profits or excess profits.
2. In an imperfectly competitive industry, government subsidies can shift excess profits from a foreign firm to a domestic firm.
3. A government policy to give a domestic firm a strategic advantage in production is called a strategic trade policy.
Technology and Externalities
1. By investing in new technology, firms are creating an extra benefit for society that is easily used by others.

Resource summary

	Created by Sofia Elizabeth 8004 about 9 years ago