UNIVERSITY OF MAKATI

J. P. Rizal Ext., West Rembo, Makati City

COLLEGE OF BUSINESS AND FINANCIAL SCIENCE
Department of MARKETING MANAGEMENT
Course Title Title

Module No. 2
FOREIGN TRADE PRACTICES/POLICIES

GLOBE/INTERNATIONAL
AMADEO C. LANUZA, JR., Ph. D
TRADE Module Leader

Module AMADEO C. LANUZA, JR., Ph. D

Contributor

How long the student should take this module?

The students are expected to finish all the activities, assignments, and
Time Frame: assessments of this module in two (2) sessions for three (3) hours at
1.5 hour per session.

This section shall provide the students with instructions on how to complete
the module, to wit:

1. Survey readings of different types of Trade Agreement, namely:

How to Complete this Unilateral, Bilateral and Multi-lateral Trade Agreements.
module?
2. View video lectures on:
You-tube–International Trade Explained - (world101.cfr.org)
https://www.youtube.com/watch?v=ZEiJN6yFB8o;
https://www.youtube.com/watch?v=IiOC5XG2I5Y;
https://www.youtube.com/watch?v=ufRbwd1PhSs

Via Google–https://www.slideshare.net/mariz_rose04/chap-12-
international-trade-practices-and-policies-14717286;

3. Power point presentation – (22 slides depicting trade practices and

trade policies of different trading nations of the world).

4. Submission of Synopsis Paper about the topics discussed.

Teaching Strategies: Use of UMAK-LMS, Voice-over Power Points Presentation, or You-tube video-
recorded lectures and Online links.
 Introduction/Overview. This section serves as an introduction to the module students are beginning. It has
three elements:
1) Demonstrate the importance of the different foreign trade practices among the 164 member nations of the
World Trade Organizations;
2) Showcase some recent trade policy developments implemented by Governments in a given geo-political
region and/or geo-economic jurisdiction;
3) Comprehend the variation of trade practices and trade policies implementation of each regional trade
organization in the global economy.

This module aims to develop knowledge, skills, and attitude of the students in learning the fundamentals of
Global/International Trade and International Business and Trade. These include:

Topic: Foreign Trade Practices/Policies

1. “The economic growth and development of a country depends upon its sound trade
practices and best economic policies.”

- Based from the foregoing narrative, the students are asked to cite the role of
international trade to prove the above statement?

2. A written discourse in not less than 300 words, students must submit on a yellow pad
paper their brief answers to the following questionnaire which shall be treated as pre-mid
term quiz, viz:

a. Discuss how international trade negotiations between trading nations occur?

b. What is a free trade? Who are the opponents of free trade?

c. Are there alternatives to free trade? Please cite these alternatives and explain the
importance of each to a nation’s economy? (Source: Chapter II, International Trade and
INTRODUCTION

Finance by Dr. Amadeo C. Lanuza, Jr. (2019 Revised Edition).

A. Foreign Trade Practices:

Under above sub topic, this module is open to discussing the two following
important parameters, viz:

1. International trade models, such as: The Ricardian model, Heckscher-

Ohlin model, Specific-factor model, New Trade Theory model and Gravity
Trade model; and

2. Alternatives to free trade, to wit: Tobin tax, Protectionism, Mercantilism,

Trade liberalization, Trade negotiations, Free trade, Fair trade, Open trade
and Balance trade.

B. Foreign Trade Policies:

Recent Trade Policy Developments: A Mixed Picture

(Asia-Pacific Trade and Investment Report 2013)

1. Trade policies implemented by Governments in the region mixed

protectionist policies and trade promotion, with hard to predict net impacts
on trade and welfare;
2. While the pace of adding new trade restrictions has been lessening, the
removal of already imposed measures remains slow too;
3. Trade liberalization, mainly through reduction of tariffs, reflects efforts
to lower prices of food and/or intermediate goods;
4. To restrict trade, more opaque measures are often preferred; these are
mainly affecting the import of minerals, machinery, vehicles and food
items;
5. The manufacturing sector is the most affected by less transparent
measures, both in the region and globally, followed by the agricultural
sector;
6. Changing global production and trade have played an important role
in fomenting trade liberalization in certain sectors;
7. Propensity to use discriminatory measures is linked to weakening
economic performance; and
8. Tariffs still remain an obstacle to trade for developing countries
 1. Knowledge: Acquire working ideas about the different international trade models and the various
LEARNING OUTCOMES

alternatives to free trade.

2. Skills: Application of learned international trade models and alternatives to free trade in an actual work
environment, as in an international trade (import/export and sundries) transactions; and

3. Knowledge: That the economic growth and development of a country depends upon sound trade
practices of its economic managers and best economic policies of its government.

4. Skills: Analysis of the proper and applicable trade model/s and alternative/s to be used on a given
trading transaction.

Foreign Trade Practices and Policies

(Power point slides # 45 – 56)

Lanuza, Amadeo C. Jr., Ph. D; International Trade and Finance – A College Handbook -2019 Revised
Edition, Philippine Copyright (A2009-2835), 26 November 2009.

Introductory Topics:

Foreign Trade Practices/Policies

Foreign Trade is the exchange of goods and services between nations. Goods can be defined as finished
products, as intermediate goods used in producing other goods, or as agricultural products and foodstuffs.
Foreign or international trade makes it possible for more goods to be produced and for more human wants
to be satisfied than if every country tries by itself to produce everything it needs from its own geography. It
can enable a nation to specialize in those goods it can produce most cheaply and efficiently. Trade also
CONTENT

enables a country to consume more than it would be able to produce if it depended only on its own resources.
Finally, trade enlarges the potential market for the goods of a particular economy. Trade has always been
the major force behind the economic relations among nations.

A trading country therefore needs to formulate its foreign trade policies to govern its dealings with other
countries in the world with the end-goal of maintaining trade and economic balance, as well as the socio-
cultural and political windows without surrendering its sovereignty. For example, in the case of Philippines, in
its 1987 (New) Constitution enshrined the following provisions, to wit: Article II, Section 7 provides: “The State
shall pursue an independent foreign policy. In its relations with other states the paramount consideration shall
be national sovereignty, territorial integrity, national interests, and the right to self-determination.” While in
Section 20 hereof, “The State recognizes the indispensable role of the private sector, encourages private
enterprise, and provides incentives to needed investments.” Article XII on National Economy and Patrimony
provides: Section 1, “Xxx xxx xxx. The State shall promote industrialization and full employment based on
sound agricultural development xxx, xxx, through industries that make full and efficient use of human and
natural resources, and which are competitive in both domestic and foreign markets. However, the State shall
protect Filipino enterprises against unfair, competition and trade practices. In the pursuit of these goals, all
sectors of the economy and all regions of the country shall be given optimum opportunity to develop. Private
enterprises, including corporations, cooperatives, and similar collective organizations, shall be encouraged
to broaden the base of their ownership.” Section 13, “The State shall pursue a trade policy that serves the
general welfare and utilizes all forms and arrangements of exchange on the basis of equality and reciprocity”

Group Tasks: Each group of five (5) students is required to submit a “Synopsis” of each of the Topic at the
end of every session. The format of the paper should contain a Cover Page using the CBFS Letterhead, The
Topic Title at the center of the page, indicate Submitted by: (Names of Student, Course and Year, date
ASSIGNMENT

submitted beneath the names). Also indicate Submitted to: (Complete name of the Professor-all in bold
letters). Each member of the group should contribute at least one paragraph of his/her concluding remark
and a photo at the bottom of the page showcasing the conclusion made. The photo, if relevant maybe
extracted from the 22 Power Point slides (# 45 – 66) on a (face to face) lecture. Ensure that your conclusion
should at least reflect the goals set under the “Learning Outcomes” marginal column. The whole set of paper
should have a minimum number of six (6) pages, including the cover page. The Paper format should be
presented on a font style of Arial, # 12. Therefore, each group is tasked to submit at least a set of synopsis
paper at the end of Module 2.
 Each group of students shall be assessed by the Lecturer/Professor by way of Group Oral Revalida. (Face-
to-face classroom setting). They will be asked questions based on their understanding of the contents of the
ASSESSMENT

Topics subjected to survey readings, viewing and discussions.

This is where you should provide clear and explicit details on how you will evaluate/assess student work and
participation through each module. Each assessment must be checked against the Learning Outcomes of
the module. All assessments are to be completed at the end of every module.

Recitation or Class Participation during the face to face classroom instruction.

Literature Analysis based on survey readings made on the topics assigned for readings.
Oral Quizzes on theTopic found in Chapter 2 of the Handbook; Answer the Questionnaire on Slide # 66.

Rubrics
(Foreign Trade Practices/Policies)

Date/Time Topic Enrichment Activities Evaluation

Session 6 – 1.5 hr. Discussion on the Random call for
WED 6:00-9:00PM different international oral argument
Sept. 9, 2020 1. Foreign Trade Practices trade models and or an opinion.
MTH 4:30-6:00 PM alternatives to free trade.
Sept. 3 & 7, 2020
And RUBRICS

TF 4:30-7:30 PM
Sept. 1 & 4, 2020
Session 6 – 1.5 hr. Discussions on the Asia- Random call for
WED 6:00–9:00PM Pacific Trade and oral argument
Sept. 9, 2020 2. Foreign Trade Policies Investment Report (2013) or an opinion.
MTH 4:30 -6:00PM
Sept. 3 & 7, 2020
TF 4:30 – 7:30 PM
Sept. 1 & 4, 2020

Literature Analysis (Synopsis) of surveyed reading materials shall be credited of = 30%

Critical Analysis (Pros and Cons/Positive or Negative/Distinguishing or Differences) = 50%
Writing Skills of the Synopsis (Technique in Grammar/Sentence Construction) = 20%

Required Readings:

Hill, Charles W. L., International Business (Competing in the Global Market Place). 7th Edition
Lanuza, Amadeo Jr. C., International Trade and Finance. Copyright A2009-2835, 2019 Revised Edition.
Ortiz-Espina, Esteban; Beltekian, Diana., Trade and Globalization – Article published in 2014; last
REFERENCES

revised in October 2018, Newsletter-Our World in Data – (GCD) Global Change Data Lab and University of
Oxford, OX2, U.K.

Other references:
You-tube–International Trade Explained - (world101.cfr.org)
https://www.youtube.com/watch?v=ZEiJN6yFB8o;
https://www.youtube.com/watch?v=IiOC5XG2I5Y;
https://www.youtube.com/watch?v=ufRbwd1PhSs
Via Google–https://www.slideshare.net/mariz_rose04/chap-12-international-trade-practices-and-
policies-14717286;