Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Look up keyword
Like this
1Activity
0 of .
Results for:
No results containing your search query
P. 1
International Business

International Business

Ratings: (0)|Views: 8 |Likes:
Published by VIVEK JAISWAL
Import Quotas
Import quotas are limitations on the quantity of goods that can be imported into the country during a specified period of time. An import quota is typically set below the free trade level of imports. In this case it is called a binding quota. If a quota is set at or above the free trade level of imports then it is referred to as a non-binding quota. Goods that are illegal within a country effectively have a quota set equal to zero. Thus many countries have a zero quota on narcotics
Import Quotas
Import quotas are limitations on the quantity of goods that can be imported into the country during a specified period of time. An import quota is typically set below the free trade level of imports. In this case it is called a binding quota. If a quota is set at or above the free trade level of imports then it is referred to as a non-binding quota. Goods that are illegal within a country effectively have a quota set equal to zero. Thus many countries have a zero quota on narcotics

More info:

Published by: VIVEK JAISWAL on May 15, 2011
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as DOC, PDF, TXT or read online from Scribd
See more
See less

05/06/2012

pdf

text

original

 
Import Quotas
Import quotas are limitations on the quantity of goods that can be imported into thecountry during a specified period of time. An import quota is typically set below the freetrade level of imports. In this case it is called a
binding quota
. If a quota is set at or abovethe free trade level of imports then it is referred to as a
non-binding quota
. Goods that areillegal within a country effectively have a quota set equal to zero. Thus many countrieshave a zero quota on narcotics and other illicit drugs.There are two basic types of quotas: absolute quotas and tariff-rate quotas. Absolutequotas limit the quantity of imports to a specified level during a specified period of time.Sometimes these quotas are set globally and thus affect all imports while sometimes theyare set only against specified countries. Absolute quotas are generally administered on afirst-come first-served basis. For this reason, many quotas are filled shortly after theopening of the quota period. Tariff-rate quotas allow a specified quantity of goods to beimported at a reduced tariff rate during the specified quota period.In the US in 1996, milk, cream, brooms, ethyl alcohol, anchovies, tuna, olives and durumwheat were subject to tariff-rate quotas. Other quotas exist on peanuts, cotton, sugar andsyrup.In the US most quotas are administered the US Customs Service. The exceptions includedairy products, administered by the Department of Agriculture, and watches and watchmovements, administered by the Departments of the Interior and the CommerceDepartment.
Voluntary Export Restraints (VERs)
A voluntary export restraint is a restriction set by a government on the quantity of goodsthat can be exported out of a country during a specified period of time. Often the wordvoluntary is placed in quotes because these restraints are typically implemented upon theinsistence of the importing nations.Typically VERs arise when the import-competing industries seek protection from a surgeof imports from particular exporting countries. VERs are then offered by the exporter toappease the importing country and to avoid the effects of possible trade restraints on the part of the importer. Thus VERs are rarely completely voluntary.Also, VERs are typically implemented on a bilateral basis, that is, on exports from oneexporter to one importing country. VERs have been used since the 1930s at least, andhave been applied to products ranging from textiles and footwear to steel, machine toolsand automobiles. They became a popular form of protection during the 1980s, perhaps in
 
 part because they did not violate countries' agreements under the GATT. As a result of the Uruguay round of the GATT, completed in 1994, WTO members agreed not toimplement any new VERs and to phase out any existing VERs over a four year period.Exceptions can be granted for one sector in each importing country.Some interesting examples of VERs occured with auto exports from Japan in the early1980s and with textile exports in the 1950s and 60s.
Textile VERs
Another interesting effect of VERs occurred in the textile industry beginning in the1950s. In the mid 50s, US cotton textile producers faced increases in Japanese exports of cotton textiles which negatively affected their profitability. The US governmentsubsequently negotiated a VER on cotton textiles with Japan. Afterwards, textiles beganto flood the US market from other sources like Taiwan and South Korea. The USgovernment responded by negotiating VERs on cotton textiles with those countries. Bythe early 1960s, other textile producers in the US, who were producing clothing using thenew synthetic fibers like polyester, began to experience the same problem with Japaneseexports that cotton producers faced a few years earlier. So VERs were negotiated onexports of synthetic fibers from Japan to the US. During this period European textile producers were facing the same pressures as US producers and the EEC negotiatedsimilar VERs on exports from many southeast Asian nations into the EEC.This process continued until its complexity led to a multilateral negotiation between theexporters and importers of textile products around the world. These negotiations resultedin the Multi-Fiber Agreement (MFA) in the early 1970s. The MFA specified quotas onexports from all major exporting countries to all major importing countries. Essentially itrepresented a complex arrangement of multilateral VERs. The MFA provided an assuredupper limit (ceiling) to the extent of competition that import-competing firms couldexpect in the US and the EEC. This type of arrangement has sometimes been called anorderly market arrangement. It is also a reasonable example of what has been referred toas managed trade.The MFA was renewed periodically throughout the 70s, 80s and 90s. However, theUruguay round of the GATT, completed in 1994, renamed the MFA to the Agreement onTextiles and Clothing (ATC) and specified a ten year transition period during which theATC will be eliminated.
Foreign direct investment
Foreign direct investment
(
FDI
) or foreign investment refers to the net inflows of investmentto acquire a lasting management interest (10 percent or more of voting stock)in an enterprise operating in an economy other than that of the investor .
It is the sum of equity capital, reinvestment of earnings, other long-term capital, and short-term capital as
 
shown in the balance of payments. It usually involves participation in management, joint- venture,transfer of technologyandexpertise. There are two types of FDI: inward foreign directinvestmentand outward foreign direct investment, resulting in a
net 
FDI
inflow
(positive or negative) and "stock of foreign direct investment", which is the cumulativenumber for a given period. Direct investment excludesinvestment through purchase of shares.
FDI is one example of  international factor movements. FDI is a measure of foreign ownership of productive assets, such as factories, mines and land. Increasing foreign investment can be used as one measure of growing economicglobalization. The figure below shows net inflows of foreign direct investment in theUnited States.The largest flows of foreign investment occur between the industrializedcountries ( North America, Western EuropeandJapan
 
). But flows to non-industrializedcountries are increasing sharply.
US International Direct Investment Flows:
PeriodFDI OutflowFDI InflowsNet1960-69
$ 42.18 bn$ 5.13 bn+ $ 37.04 bn
1970-79
$ 122.72 bn$ 40.79 bn+ $ 81.93 bn
1980-89
$ 206.27 bn$ 329.23 bn- $ 122.96 bn
1990-99
$ 950.47 bn$ 907.34 bn+ $ 43.13 bn
2000-07
$ 1,629.05 bn$ 1,421.31 bn+ $ 207.74 bn
Total
$ 2,950.69 bn$ 2,703.81 bn+ $ 246.88 bn
Types
A foreign direct investor may be classified in any sector of the economy and could be anyone of the following:
[
 
]
an individual;
a group of related individuals;
an incorporated or unincorporated entity;
a group of related enterprises;
a government body;
an estate (law),trustor other social institution; or 
any combination of the above.
 [ edit 
 
 ] Methods
The foreign direct investor may acquire voting power of an enterprise in an economythrough any of the following methods:

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->