Reference no: EM132896700

Topic 1: International Trade Theory

1. QUESTION: What are the potential costs of adopting a free trade regime? Do you think governments should do anything to reduce these costs? Why?

2. QUESTION: Reread the Country Focus "Is China Manipulating Its Currency in Pursuit of a Neo-Mercantilist Policy?"

Do you think China is pursuing an economic policy that can be characterized as neo-mercantilist?

What should the United States, and other countries, do about this?

3. QUESTION: Drawing on the new trade theory and Porter's theory of national competitive advantage, outline the case for government policies designed to build a national competitive advantage in biotechnology. What kind of policies would you recommend the government adopt? Are these policies at variance with the basic free trade philosophy?

Topic 2: Government Policy and International Trade

1. QUESTION: Whose interests should be the paramount concern of government trade policy: the interests of producers (businesses and their employees) or those of consumers?

2. QUESTION: You are an employee of an U.S. firm that produces personal computers in Thailand and then exports them to the United States and other countries for sale. The personal computers were originally produced in Thailand to take advantage of relatively low labor costs and a skilled workforce. Other possible locations considered at that time were Malaysia and Hong Kong. The U.S. government decides to impose punitive 100 percent ad valorem tariffs on imports of computers from Thailand to punish the country for administrative trade barriers that restrict U.S. exports to Thailand. How should your firm respond? What does this tell you about the use of targeted trade barriers?

3. QUESTION: Reread the Management Focus "Protecting U.S. Magnesium." Who gains most from the antidumping duties levied by the United States on imports of magnesium from China and Russia? Who are the losers? Are these duties in the best national interests of the United States?