Protectionism A2 Economics Unit 4. Aims and Objectives Aim: Understand protectionism Objectives: Define protectionism Explain methods of protectionism.

Slides:



Advertisements
Similar presentations
International Trade Policy Trade Restrictions: Tariffs Focuses on barriers to free trade.
Advertisements

International Economics Tenth Edition
Trade Policy (Tariffs, Subsidies, VERs)
The Impact of Trade Policies Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin Chapter 14.
LECTURE #8: MICROECONOMICS CHAPTER 9
© Pilot Publishing Company Ltd Chapter 11 International Trade II --- Protectionism.
International Economics Tenth Edition
INTERNATIONAL ECONOMICS Free Trade & Protectionism-Graphical Analysis
International Trade Policy
Policies to correct balance of payments disequilibrium
Protectionism and Free Trade
Protectionism Where politics, foreign policy and (occasionally) rational economic debate collide.
Trade protectionism1 2 What is Protectionism? Trade protectionism is the policy that restricts the volume of ______ and, in particular, the volume of.
APPLYING SUPPLY AND DEMAND International Trade. Major Issues Why trade with other nations (regions)? Recognizing comparative advantage Benefits and costs.
Application: International Trade
3.1 D Types of PROTECTIONISM Chapter 22 Pages
Chapter 9 International Trade
The Political Economy of International Trade
INTERNATIONAL ECONOMICS: THEORY, APPLICATION, AND POLICY;  Charles van Marrewijk, 2012; 1 Tariff, partial equilibrium Countries may restrict trade in.
9 Import Tariffs and Quotas under Imperfect Competition 1
Overview Introduction Import tariffs Import quotas
The Instruments of Trade Policy
Free Trade and Protectionism (4.2). Free Trade Free trade is the total absence of any from of intrusions, or barrier in the flow of goods and services.
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. International Trade What determines whether a country imports or exports a good?
Chapter 8 The Instruments of Trade Policy
Nations and firms in the global economy; Cambridge University Press, 2006© Charles van Marrewijk, 2005; 1 Tariff, partial equilibrium; 1 Countries may.
The Instruments of Trade Policy
INTERNATIONAL TRADE Objectives After studying this chapter, you will be able to:  Explain how a country can gain from international trade  Explain.
Calculating Protectionism (HL)
CHAPTER 8.  Import tariffs  Export subsidies  Import quotas  Voluntary export restraints (VER)  Local content requirements Copyright © 2009 Pearson.
International Trade. Why do countries trade? Wider consumer choice and lower prices due to increased competition Firms have access to larger markets,
Ch. 17-The Global Economy: TRADE Sara Susach. IMPORTANCE OF INTERNATIONAL TRADE It is part of our everyday life. Many of the products we consume (food,
Free Trade vs. Protectionism Frederick University 2009.
Slide 8-1  Effects of a Tariff Assume that two large countries trade with each other. Suppose Home imposes a tax of $2 on every bushel of wheat imported.
A Basic Primer on Trade Policy A Basic Primer on Trade Policy Dr. Andrew L. H. Parkes “Practical Understanding for use in Business” 卜安吉.
Copyright©2004 South-Western 9 Application: International Trade.
Trade and welfareslide 1 S D Q P Q* P* = $1 The diagram below shows the U.S. domestic market for water. No trade is taking place. WATER MARKET.
1 Chapter 21 International Trade and Finance ©2004 Thomson/South-Western Key Concepts Key Concepts Summary Summary Practice Quiz.
Chapter 17.  Resource Distribution and Specialization  Natural Resources  Capital and Labor  Unequal Resource Distribution  Specialization and Trade.
Chapter 9 International Trade. Objectives 1. Understand the basis of international specialization 2. Learn who gains and who loses from international.
Political Economy of Trade © 2015 Melvin Jameson.
A.S 3.2 International Trade. Involves buying and selling goods and services between nations Most trade occurs between firms operating in different countries.
What Is International Trade?  International trade is the exchange of goods and services between countries.  This type of trade gives rise to a world.
International Economics International Economics Tenth Edition Trade Restrictions: Tariffs Dominick Salvatore John Wiley & Sons, Inc. Salvatore: International.
University of Papua New Guinea International Economics Lecture 13: Trade Policy – The Tools.
Copyright © 2012 Pearson Addison-Wesley. All rights reserved. Chapter 9 The Instruments of Trade Policy.
Trade Policies Free trade vs protectionism 1.  This part is simple:  Free trade makes the country as a whole better off, even though it may not make.
 Charles van Marrewijk Tariff, partial equilibrium; 1 Countries may restrict trade in several ways. For example, they may Impose a 100 Euro tax per imported.
Restrictions on free trade
International trade 2012.
Chapter 28 International Trade and Finance
International Trade.
Restrictions on Free Trade
Trade and Welfare In this section, we examine the effects on welfare of international trade. The approach taken here, is to use the devices of Producer.
Barriers to Trade SSEIN2a: Define trade barriers as tariffs, quotas, embargoes, standards, and subsidies. SSEIN2b: Identify costs and benefits of trade.
International Trade Politics and Policies
Restrictions on Free Trade
Understanding Global Trade Politics
Restrictions on free trade
Restrictions on Free Trade
International Trade Politics and Policies
Trade and Welfare In this section, we examine the effects on welfare of international trade. The approach taken here, is to use the devices of Producer.
Gains from Trade. Gains from Trade The Gains from Trade Figure 8.2 At the free trade price of PW, Home supply will fall to S1 and Home demand will.
Understanding Global Trade Politics
International trade 2012.
Understanding Global Trade Politics
Trade and Welfare In this section, we examine the effects on welfare of international trade. The approach taken here, is to use the devices of Producer.
Costs and Benefits of a Tariff
International Trade and Tariff
Protectionism aka Trade Barriers 3.1b
Presentation transcript:

Protectionism A2 Economics Unit 4

Aims and Objectives Aim: Understand protectionism Objectives: Define protectionism Explain methods of protectionism Analyse the effects of protectionism Evaluate the usefulness of protectionism

Starter There is no guarantee that gains of trade are equally distributed, and although restrictions on trade will probably reduce world welfare, individual countries may feel it is in their interest to do so…… Economist Article 2011

Definition Protectionism: Government actions and policies that restrict or restrain international trade, often done with the intent of protecting local businesses and jobs from foreign competition. restrict or restrain international trade, often done with the intent of protecting local businesses and jobs from foreign competition.

Starter In groups decide on as many methods of protectionism as you can.

TariffsSubsidiesQuotasEmbargoesVoluntary Export Restraints

Techniques of Protectionism - Tariffs Specific – tax at a fixed rate per unit. Ad-Valorem – a tax which is a % of the price of the unit. Taxes on imported goods. Size of tariff depends on PED.

Techniques of Protectionism - Tariffs Price QtyB EAC P P+T Domestic Demand Domestic Supply Price With Tariff World Price J L K G FH

Techniques of Protectionism - Tariffs World Price before tariff is 0P Before tariff domestic demand was 0C and domestic suppliers were producing 0B. Imports were BC

Techniques of Protectionism - Tariffs Tariff imposed price rises to P+T Domestic demand falls to 0A Domestic output rises to 0E Imports are now EA

Techniques of Protectionism - Tariffs Domestic suppliers have gained P,P+T, H, J at the expense of consumers. HFKL = revenue from tariff Overall net loss is triangles – JHL & FKG – the tariff has reduced welfare as a whole.

Techniques of Protectionism - Embargoes Prohibition of trade with a country to put pressure on its government to change policies. Leads to smuggling and black markets america america

Techniques of Protectionism - Subsidies Price Qty S Before Subsidy Government then subsidises to shift the supply curve downwards. Consumer Surplus Producer Surplus

Techniques of Protectionism - Subsidies Price Qty S S1 Consumer Surplus Producer Surplus After Subsidy Supply curve shifts down, consumer and producer surplus increases.

Techniques of Protectionism - Quota Limit on the number of imports allowed into a country. Used to benefit producers but not consumers.

Techniques of Protectionism – Voluntary Export Restraints (VER) One government persuades another to pressurise its exporters into limiting supplies into markets. EU had one with Japanese car makers which reduced competition and lead to high consumer prices.

Is Protectionism a good thing? talk/ stm talk/ stm Create a spider diagram of the arguments for and against protectionism in preparation for a debate/argument.