CH7 Critical Thinking & Discussion Questions

1- I do think governments should consider human rights when granting preferential trading rights to countries. In the world I live in I have strong beliefs that every individual should be granted basic human rights, in whatever country they reside in. Yes, trading with countries such as China can bring a boost to the economy, but at what cost? I would rather pay the extra cash in order to ensure the person who was making the item did it in a safe environment with basic human rights. Countries such as China are frequently a violator of human rights, and trading with the U.S. is very important to China. This gives the U.S. a kind of leverage when trying to influence China’s human rights policies, and we have used this leverage in the past, and I feel we should continue to do so showing other Countries what we are willing to do in order to provide ethical international business. Although, in doing this we run the risk of China choosing to trade with a country other then the U.S. If we were to forget about human rights, and were too just trade with China it could also make human rights better without even trying. This could happen by the income levels increasing due to trade, which in return, could provide greater wealth for the people who will then be able to mandate, and obtain better treatment.
2- The interests of consumers should always be the primary concern of governments, but unfortunately consumers usually are the ones who pay higher prices due to trade policies. The government has the responsibility to ensure that businesses will get a competitive advantage in the global business world. If the government were too place too much of its interests in businesses the consumer would suffer immensely, but without the consumer there is no need for a business. In order to have a successful trade policy the government needs to keep both the consumer, and the businesses interests in mind, because one does not work without the other.
3- The new trade theory tells us that the increasing returns to concentrations and first mover benefits matter very much. This theory is founded on the dispute for first mover benefits, when the government uses backings to increase the changes of becoming first movers in developing industries. Businesses should be urging the government to focus on new technologies that could be very important in the future, and using subsidies to help develop this work in order to create these technologies. Governments should help provide export backings until the local businesses have been able to establish first mover gains in the worlds market.
4- Well, as long as the manufacturing requirements haven’t changed drastically the obvious choice would to be reviewing Malaysia or Hong King again. Due to the U.S. enforcing the ad valorem tariff on Thailand product imports, it would be simple to avoid the tariffs by reviewing these other locations, and choosing to produce there instead.
5- The U.S. producers, and their employees are the prime recipients of the anti-dumping duties. Due to this, consumers in the U.S. will pay higher prices for magnesium-based products, but it will keep business within our country allowing jobs to remain. The U.S. does run the risk of retaliatory consequences from China and Russia.

CH7 Closing Case

1- The reason why calls for protectionism are greater during sharp economic contractions than during boom periods is to keep business within the country. This allows businesses to stay open, keeps employees employed, and doesn’t let foreign business to come into the