Alliah Bea M.

Ladao July 13, 2020

Define the following:

Export

 Goods being sell out of a country

Import

 Goods being brought into a country

Merchandise Trade

 Tangible products or goods bought/sold

 Goods which add or subtract from the stock of material resources of a country by
entering (imports) or leaving (exports) its economic territory

Trade deficit

 A negative trade balance occurs when exports less than imports

Trade surplus

 A positive balance occurs when exports is more than imports

Balance of trade

 The difference between the monetary value of a country’s imports and exports over a
given time period

Mercantilism

 Nation’s wealth depends on accumulated treasure which usually means gold

Protectionism

 Trade between countries is restricted through measures to reduce the number of

imports coming into a country
Free Trade

 Policy which governments do not put any restrictions to exports or imports

 No taxes on manufacturing goods and no tariffs paid when goods cross a border

Theory of Absolute advantage

 According to Adam Smith, country’s wealth is based on it’s available goods &
services rather than on gold
 Ability to produce something more efficiently than any other country can

Theory of comparative advantage

 Proposes specialization through free trade because trade can increase total global
output even if one country has an absolute advantage in the production of all products

Comparative Advantage

 Ability to produce some product more efficiently or better that other products

Opportunity Cost

 The return of a foregone option less than the return on your chosen option
 Measured by what must be given up in producing one good using the same resource

Factor endowment

 Amount of labor, land, money and entrepreneurship that could be exploited for
manufacturing within a country

Factor endowment theory

 Hold that countries produce and export those goods that require resources that are
abundant and import those goods that require resources that are in short supply
 Patterns of trade are determined by differences in factor endowment not productivity
Product life cycle

 States that the location of production of certain manufactured products shifts as they
go through their life cycle
 Consists of three stages: introduction, maturation, standardization

Strategic trade theory

 A way of conceptualizing and testing for strategic government interventions in

imperfectly competitive international markets

First-mover advantage

 Refers to an advantage gained by a company that first introduces a product

Strategic trade policy

 Trade policy that affects the outcome of strategic interactions between firms in an actual

or potential international oligopoly and gives strategic advantage through government
subsidies

Theory of national competitive advantage of industries

 The Porter Diamond

 An international competitive advantage stemming from combination of factor and
demand conditions; related and supporting industries; and firm strategies, structures and
rivalries

Resource mobility

 Holds that a social movement takes shape from long term changes in a group's
organization, available resources and opportunities for group action

Tariff barrier

 A tax imposed upon imports to protect local industries and companies.

 Directly affect the prices of goods traded
 Also called Duty or Levied on goods traded internationally
Import tariff

 Tax imposed on importing country

Deadweight costs

 It is the net losses arise in an economy as the outcome of tariffs

Non-tariff barrier (NTB)

 Non-tax measure to favour the domestic firms against foreign suppliers

Subsidy

 Money from the government for domestic producers, making it harder for importers to
compete

Import quota:

 Importing country limits quantity of the imported products

 Limit quantity that quantity that increases price/cost

Voluntary export restraint (VER)

 Arrangements between exporting and importing countries in which

the exporting country agrees to limit the quantity of specific exports below a certain
level in order to avoid imposition of mandatory restrictions by the importing country.

Local content requirement

 Policies imposed by governments that require firms to use domestically-manufactured

goods or domestically-supplied services in order to operate in an economy

Administrative policy

 Administrative trade policies are bureaucratic rules that are almost always deliberately
designed to restrict the flow of a particular import into a country
Anti-dumping duty

 A protectionist tariff that a domestic government imposes on foreign imports that it

believes are priced below fair market value

Trade embargo

 A government-ordered restriction of the exchange of goods or services with a specific

country or countries
 They are usually created as a result of unfavorable political or economic circumstances
between nations
References:

Bamanie, N. (2016). Social movement and resource mobilization theory. Retrieved from:
https://www.researchgate.net/publication/288990624_social_movement_and_resource_mobilizat
ion_theroy#:~:text=The%20resource%20mobility%20theory%20of,and%20opportunities%20for
%20group%20action.

Daniels, J., Radebaugh, L., Sullivan, D. (2014). Chapter 6: International Trade and Factor
Mobility Theory. Retrieved from: https://en.ppt-online.org/342812

Kenton, W. (2020). Anti-Dumping Duty. Retrieved from:

https://www.investopedia.com/terms/a/anti-dumping-duty.asp#:~:text=An%20anti%2Ddumping
%20duty%20is,in%20its%20own%20home%20market.

Longley, R. (2019). What Is an Embargo? Definition and Examples. Retrieved from:

https://www.thoughtco.com/what-is-an-embargo-definition-examples-4584158

Liberto, D. (2019). An embargo defined. Retrieved from:

https://www.investopedia.com/terms/e/embargo.asp

Williamson, E. (2016). International Trade: Key Terms Define the following: International
Trade- Goods- Import- Export- Tariff- N.A.F.T.A.- G.A.T.T. Retrieved from:
https://slideplayer.com/slide/7484770/

Roberts, K. (2016). Types of non-tariff barriers. Retrieved from:

https://slideplayer.com/slide/5934833/

Shanmugapriya, S, (2008). International Trade Theory. Retrieved from:

https://www.slideshare.net/shanmugapriya/international-trade-theories-presentation

Snow, T. (n.d.). Tariff and Non-tariff Barriers. Retrieved from:

https://www.slideserve.com/tivona/tariff-and-non-tariff-barriers