Lesson 7: Today's Issues in International Trade

Please read  "After Protection or Free Trade" and "Trade, Development & Sustainability", Parts 1 & 2

1. If trade surpluses do not increase production, then why do so many nations seek them?   (After PFT

2. Why has the United States, unlike so many other nations, been willing to accept a trade deficit for many years?

3. A heavily-indebted poor nation

a. would be well-advised to follow a PROUT-ist policy on trade.
b. would benefit from investment by multinational corporations.
c. will probably run heavy trade deficits.
d. must maintain a trade surplus.

4. Why has China pursued a deliberate policy to keep its currency undervalued?

5. In addition to tariff reductions, what issues are now addressed in international trade negotiations?

6. Why are international trade agreements seen as eroding national sovereignty?

7. What is the most basic and essential element of national sovereignty?

8. What penalty is imposed on a nation that breaks the trade rules enforced by the WTO?

9. What policy could a nation adopt to ease the burden of that penalty?

10. What are some of the problems in today’s economy that are blamed on “free trade”?   (Multinationals) 

11. The United States sugar industry

a. Is highly labor-intensive.
b. depends on protective tariffs.
c. lost market share under the NAFTA agreement.
d. offers higher-quality products than its competitors.

12. What special privilege is granted to corporations? Why is this so useful to them?   (Multinationals) 

13. What are some factors that can make a large corporation less efficient and profitable?

14. Historically, which has come first, higher wages, or higher worker productivity? Is this changing today?

15. What are some of the non-labor costs that businesses seek to avoid by moving operations to other countries?