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GBU 201-001 • CRN 20319 • T,R 1230 to 1345 • Combs 213
Copyright ©2005 C.Siegel
MKT309 • MKT401 • GBU201

Ch 6 Business-Government Trade Relations
Opening case - AOL Time Warner (now Time Warner) - A marriage made in heaven?

Why do governments intervene in trade?
Free trade vs. promotion and protectionism
Rich-country protectionism vs. poor-country protectionism -- are there differences?
Fear of 'tit for 'tat - reciprocity
Trade policy decisions are primarily a function of (politics+economics)

Political motives • Jobs, national security, retaliation, gain influence
Economic motives • Infant industries, strategic trade policy
Cultural motives • Protect cultural purity versus U.S. cultural imperialism

Trade promotion
Subsidies - Particularly in agriculture - example: 2002 U.S. Farm Bill
Export financing - ExIm Bank
FTZs - FTZ Resource Center, National Association of FTZs (NAFTZ) - any in KY?
Special government agencies - JETRO, Ky International Trade Office

Trade restrictions
Trade obstacles raise funds, promote nationalism and self-interest; retaliate
Tariffs • Quotas • Embargoes - U.S. prohibitions
Local content • Administrative/bureaucratic delays • Currency controls
Anti-dumping requirements

Global trading system
GATT and WTO - only international body dealing specifically with trade between nations
Trade disputes: negotiate - arbitrate - litigate = avoid trade wars!