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1、OVERVIEW OF SECTION II: INTERNATIONAL TRADE POLICYSection II of the text is comprised of four chapters:Chapter 8The Instruments of Trade PolicyChapter 9The Political Economy of Trade PolicyChapter 10Trade Policy in Developing CountriesChapter 11Strategic Trade Policies in Advanced CountriesSECTION I
2、I OVERVIEWTrade policy issues figure prominently in current political debates and public policy discussions. The first two chapters of this section of the text are concerned with the instruments of trade policy and the arguments for free trade and managed trade. The second two chapters consider thes
3、e concepts in the context of specific sets of countries that face common problems. Throughout, the use of case studies provides the student with real world examples that clearly illustrate the theoretical arguments.Chapter 8 discusses various instruments of trade policy including tariffs, quotas, vo
4、luntary export restraints, and local content requirements. The effects of these policies on prices and trade volumes are determined in the context of a partial equilibrium framework. The chapter reviews the analytical tools of consumer and producer surplus, and uses these tools to consider the welfa
5、re effects of various protectionist measures. The specific incidents of trade restrictions presented as case studies include import quotas on sugar entering United States markets, voluntary export restraints on Japanese autos, and oil import quotas.Chapter 9 presents the set of ideas known as the po
6、litical economy of trade theory. These ideas enable you to understand why certain trade restrictions exist, despite the force of general economic arguments which suggest that they reduce aggregate welfare. Possible motivations for trade restrictions are identified as those which increase national we
7、lfare, such as the optimum tariff, and those which foster either income redistribution or the preservation of status quo. While sometimes politically popular, these motivations for trade restrictions ignore the possibility of retaliation and usually fail tests based upon basic welfare analysis. Trad
8、e agreements of the 1990s are discussed, including the Uruguay Round, and distinctions are made between Free Trade Areas and Customs Unions as well as between trade creation and trade diversion. Chapter 10 considers the possible uses of trade policies to promote the growth of developing economies. T
9、he chapter reviews the relative successes of different development strategies. It examines arguments for and the results of import-substituting industrialization. The phenomenon of economic dualism, referring to the coexistence of capital intensive industrial sectors and low-wage traditional sectors
10、, and of uneven development are considered. The chapter concludes with a discussion of export led growth and the experience of the high performing Asian economies.Chapter 11 considers recent controversies in trade policy. The first part of the chapter considers the notion of strategic trade policy,
11、which first arose in the 1990s. Strategic trade policy refers to the use of trade (and other) tools for channeling resources to sectors targeted for growth by industrial country governments. The chapter presents some commonly voiced arguments for intervention in particular sectors of the economy, an
12、d then shows how these arguments are critically flawed. The second part of the chapter introduces more sophisticated arguments for strategic trade policy. The most persuasive of these is the existence of some form of market failure. The second part of the chapter considers the impact of rising trade on workers in developing countries, and more broadly, the debate over globalization. This debate has been argued in academia and policy circles, but also on the streets of Seattle, Genoa, and other cities hosting global economic summits.
