Basic Commodities ( Agricultural Products And Mines

2. What were the weaknesses of each of the following methods of stabilizing the industry?

growth. Any one or combination of these sectors fluctuation due to terrorism affects every single

considering a twenty-five percent tariff and the purpose will be predominantly protective in nature, but

The economy’s strength was strained by the strict economic controls and the shortages of raw materials while industries and livelihood were sacrificed so the economy could meet the military demand. The wartime-controlled economy was unavoidable because of the government’s necessity in ensuring raw materials for chemical industries, production of weaponry, and the raising of funds for huge military spending. Japan depended on imports for many materials like nickel, cobalt, raw cotton, wool, and oil, but was self-sufficient in producing coal, iron ore, and salt. Imports for consumer production, like wool and raw cotton, were cut back. In 1940, to counter act the cut back on consumer goods and to control the poor rice harvest, a rationing system was adopted. As a reaction to fixed prices, black market dealings became wildly popular and the government reacted to that by creating the economic police. Japan boosted its imports of wartime material like rare metals and petroleum products as well as mobilizing all the gold it could. The military planned to invade places like Singapore to obtain more natural resources. In September of 1940, Japan officially signed a treaty with Germany and Italy, which caused the United States to restrict their exports to Japan in hopes of weakening their economy. Japan’s government implemented a New Economic Order, which called for a shift in firms to a production basis instead of the normal profit basis; to appoint government officials as the new managers; to have industries increase production based on government orders; and to be able to organize cartels to enforce government controls like quotas. Business owners opposed this plan, claiming it was “communist”. In early 1941, the United States banned petroleum exports to Japan, thus launching Japan into war in Southeast Asia for raw materials. Expectations of being able to continue production levels

Trade policies are developed by foreign and domestic governments in an effort to influence net imports or net exports (Cengage, 2009). Two common policies are the use of tariffs and import quotas. As XYZ expands into Asia, Mexico and Canada it will want to factor the costs of tariffs and the possible effects of the limitations of import quotas. What is interesting is that the basic premises of supply and demand, imports and exports, equilibriums and trade balances are all meant to lead to an efficient market place (Cengage, 2009). Tariffs, wage restrictions, quotas and other such policies can create inefficient markets. So XYZ will have to take the basic study of economics and then apply the effects of various trade policies and restrictions. Another factor of government that influences the

The removal of import barriers may cause a substitution of goods produced within the country by others imported. This way, domestic manufacturers are affected.

1. A reduction in trade barriers has two effects on the economy. The production possibilities frontier will move outward, and the economy will move closer to the production possibilities frontier. Both outcomes are related. Freer trade creates more markets for the country for its goods and services. This allows companies to produce more, but it does not directly change the production capacity of the nation. Thus, the economy moves closer to the production possibilities frontier (Rittenberg & Tregarthen, 2009).

The economic dependency of the United States of America on its trade sector would be beneficial in illustrating the relation of protectionism to the economic growth. In the USA, the trade Union believes that protectionism is the only policy, with which the country can maintain domestic industrial growth (Trwin, 1998, 1015-1026). Being a centre for global trade, the industries of the USA have been through a significant setback in the past few years, with a prominent increase in the unemployment rate. Moreover, the growing numbers of import of Chinese goods, which are available at cheaper rates comparatively, have decreased the purchase of domestic goods in the USA This has ignited the debate to, either increase tariffs on such items to protect domestic firms and industries, or to protect the needs of civilians. From the last few years, many governments, including that of USA, U.K and several other facing the challenges of economic downturn, are looking for alternate measures, as protectionism does not seems to provide long term solution for economic crises.

Because of the removing tariff barriers incoming of the products will grows. Because every company wants make more profit from income. That is why we also prefer removing tariffs. (impotance of non tariff barriers, 2013)

A Tariff in general is a comprehensive tax on goods and services that are imported. The main aim of a tariff is to create security to the domestic product of a nation from the imported goods which are cheaper and have a huge production capacity. Furthermore tariffs also aid in balancing the prices in a country. This paper describes the roles tariffs play in a country and also pros and cons of tariffs.

With the development of the manufacturing sector, consumption of manufactured goods would increase, resulting in a decrease of imported manufactured goods. This will reduce an economy’s dependency on trade. Furthermore, if the phenomenon has any affect on world markets, it will improve the terms of trade (TOT).

the last two decades, implemented protectionist policies to soften the impact of declining comparative advantage. These policies included; border protection, support of agricultural product prices, subsidies on agricultural inputs and quantitative restrictions on imports of certain agricultural commodities. However, the majority of quantitative restrictions were lifted after the GATT multinational panel declared it illegal in 1988. The implementation of protections is attributed to Japan’s rapid industrial growth in the 1980’s, which further deteriorated comparative advantage. Although Japan’s economy has slowed in the recent years, the agricultural sector still has not caught up with the population boom. Furthermore, the inability to reallocate resources resulted in the strengthening of protectionist policies and widened the gap of international agricultural trade. Additionally, the farming sector was able to retain strong political influence which increased the reluctance of the Japanese government to lift protections. Ultimately, the longer Japan keeps agricultural protectionist policies in place, it will become more difficult for Japan to reallocate resources to accommodate free trade.

If local company product not as good as imported products, civilian may buy imported products. It would decrease the demand for local goods, which mean local brands might be broke up. According to Baghdasaryan D. and Žigić K (2010), government tariffs’ target is preventing imported products to have higher competitive position than internal products. Furthermore, tariffs could protect domestic industry. Therefore, government applies a tax to increase the price of imported goods for helping regional brands to survive in the market. Additionally, some countries tend to open market in worldwide after they regard that their economic would not have obvious affect from other countries especially developed countries, they require their products to have same treatment in other countries, this requirement not only benefit to the exported countries’ industry but also may offer well known product to the world. Gene, Joel and Chantal (2009) claims that, in the World Trade Organisation (WTO), countries should obligate the General Agreement on Tariffs and Trades (GATT), but the people of developing country doubt that GATT and WTO could benefit to their own country because the organisation was held by industrialised countries. The successful case like India and China who have joined the WTO after they dismiss tariffs barrier. So, tariffs, in most case, effect imported goods’ price for influencing the demand on imported goods. The reason for this is

Protection of local industry: import tariffs have the outcome of raising the value of imported products comparative to similar goods produced in the local market. This places foreign producers at a competitive disadvantage when selling in the resident

In this section, you will write a two- to three-sentence response to each of the following items.