文档介绍：Chapter 11
Controversies in Trade Policy
1
anization
Introduction
Sophisticated Arguments for Activist Trade Policy
Globalization and Low-Wage Labor
Summary
2
Introduction
Two controversies over international trade arose in the 1980s and 1990s.
In the 1980s a new set of sophisticated arguments for government intervention in trade emerged in advanced countries.
These arguments focused on the “high-technology” industries that came to prominence as a result of the rise of the silicon chip.
In the 1990s a dispute arose over the effects of growing international trade on workers in developing countries.
3
Sophisticated Arguments for Activist Trade Policy
There are two kinds of market failure that seem to be present and relevant to the trade policies of advanced countries:
Technological externalities
The presence of monopoly profits in highly concentrated oligopolistic industries
4
Technology and Externalities
Externalities
Firms in an industry generate knowledge that other firms can also use without paying for it.
In high-tech industries firms face appropriability problems.
Example: In electronics, it mon for firms to “reverse engineer” their rivals’ designs.
Sophisticated Arguments for Activist Trade Policy
5
The Case for Government Support of High-Technology Industries
Subsidize the activity with externalities, not all activities in an industry.
For instance, R&D (as opposed to manufacturing) should be subsidized.
How Important Are Externalities?
Externalities are hard to measure empirically.
Problems of appropriability at the level of the nation (as opposed to the firm) are less severe but still important even for a nation as large as the United States.
Sophisticated Arguments for Activist Trade Policy
6
petition and Strategic Trade Policy
In some industries where there are only a few firms in petition:
The assumptions of petition will not apply.
Firms will make excess returns (profits).
There will be an petition over the excess returns.
A subsidy