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Business-Government Trade Relations

Business-Government Trade Relations. What is the role of government? Promoting “trade”? What are the “tools” nations use?. Wild, Wild, & Han. Chapter 6. Why do governments intervene in TRADE?. Political motives: Protect jobs National security Gain influence Economic motives:

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Business-Government Trade Relations

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  1. Business-Government Trade Relations What is the role of government? Promoting “trade”? What are the “tools” nations use? Wild, Wild, & Han. Chapter 6

  2. Why do governments intervene in TRADE? • Political motives: • Protect jobs • National security • Gain influence • Economic motives: • Protect young industries • Pursue specific trade goals • Cultural motives: • National identity/pride • To share “the Swedish way”

  3. How does a country PROMOTE trade? Subsidies: Financial assistance (cash) Export financing: Export/Import Bank Foreign trade zones: Regions with fewer restrictions Special government agencies: Exporrådet

  4. How does a country RESTRICT trade? Tariffs (duties; “tull”): Tax on items Quotas: Only so many “widgets” may enter Embargoes: A form of protests Local content requirements: Use of local resources Administrative delays: “Bureaucracy” Currency controls: To restrict exchange rates

  5. Managing global trade… GATT: Just what is says – a “General Agreement on Tariffs & Trade” World Trade Organization

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