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Chapter 3

Chapter 3. Trade Distortions and Marketing Barriers. Chapter Outline. Protection of Local Industries Government: A Contribution to Protectionism Marketing Barriers: Tariffs Marketing Barriers: Nontariff Barriers Private Barriers World Trade Organization (WTO) Preferential Systems.

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Chapter 3

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  1. Chapter 3 Trade Distortions and Marketing Barriers

  2. Chapter Outline • Protection of Local Industries • Government: A Contribution to Protectionism • Marketing Barriers: Tariffs • Marketing Barriers: Nontariff Barriers • Private Barriers • World Trade Organization (WTO) • Preferential Systems

  3. Protection of Local Industry • Keeping Money at Home • Reducing Unemployment • Equalizing Cost and Price • Enhancing National Security • Protecting Infant Industry

  4. Marketing Barriers: Tariffs • Direction: Import and Export Tariffs • Purpose: Protective and Revenue Tariffs • Lengths: Tariff Surcharge versus Countervailing Duty • Rates: Specific, Ad Valorem, and Combined • Distribution Point: Distribution and Consumption Taxes

  5. Marketing Barriers: Nontariff Barriers • Government Participation in Trade - Administrative Guidance - Government Procurement and State Trading - Subsidies

  6. Marketing Barriers: Nontariff Barriers • Customs and Entry Procedures - Classification - Valuation - Documentation - License or Permit - Inspection - Health and Safety Regulations

  7. Marketing Barriers: Nontariff Barriers • Product Requirements - Product Standards - Packaging, Labeling, and Marking - Product Testing - Product Specifications

  8. Marketing Barriers: Nontariff Barriers • Quotas - Absolute Quotas - Tariff Quotas - Voluntary Quotas

  9. Marketing Barriers: Nontariff Barriers • Financial Control - Exchange Control - Multiple Exchange Rates - Prior Import Deposits and Credit Restrictions - Profit Remittance Restrictions

  10. Private Barriers • Affiliated firms' business practices • Cooperative business groups - keiretsu - chaebol

  11. The World Trade Organization (WTO) • Goal: broad, multilateral, and free worldwide system of trading • Most Favored Nation (MFN) Principle • Normal Trade Relations (NTR) Principle

  12. Preferential Systems • Generalized System of Preferences (GSP) • Caribbean Basin Initiative (CBI) • Other Preferential Systems

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