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1、TradeandInvestmentPoliciesLearningObjectivesToseehowtradeandinvestmentpolicieshavehistoricallybeenasubsetofdomesticpoliciesToexaminehowhistoricalattitudestowardtradeandinvestmentpoliciesarechangingToseehowgloballinksintradeandinvestmenthavemadepolicymakerslessabletofocussolely
2、ondomesticissuesTounderstandthatnationsmustcooperatecloselyinthefuturetomaintainaviableglobaltradeandinvestmentenvironmentRationaleandGoalsofTrade andInvestmentPoliciesNationalSovereigntyStandardofLivingQualityofLifeForeignPolicyRationaleandGoalsofTradeandInvestmentPoliciesGov
3、ernmentpoliciesaredesignedtoregulate,direct,andprotectnationalactivities.Theexerciseofthesepoliciesistheresultofnationalsovereignty,whichprovidesagovernmentwiththerighttoshapetheenvironmentofthecountryanditscitizens.Thedomesticpolicyactionsofmostgovernmentsaimtoincreasethestan
4、dardoflivingofcitizensandtoimprovethequalityoflife,andtoachievefullemployment.Thesepoliciesaffectinternationaltradeandinvestmentindirectly.RationaleandGoalsofTradeandInvestmentPolicies(cont.)Inmoredirectways,acountrymayalsopursuetechnologytransferfromabroadortheexclusionoffore
5、ignindustriestothebenefitofdomesticinfantfirms.Governmentofficialscanalsodevelopregulationsonimportstoprotectcitizens.Nationsinstituteforeignpolicymeasuresdesignedwithdomesticconcernsinmindbutexplicitlyaimedtoexerciseinfluenceabroad.Amajorforeignpolicygoalisnationalsecurity.Th
6、ePriceofProtectionismIndustryTotalCoststoNumberofCostperConsumersJobsSavedJobSaved(in$millions)Textilesand apparel$27,000640,000$42,000CarbonSteel6,8009,000$750,000Autos5,80055,000$105,000Dairyproducts5,50025,000$220,000Shipping3,00011,000$270,000Meat1,80011,000$160,000TheEffe
7、ctsofTariffsIncreaseInflationarypressures.Specialinterests’privileges.Governmentcontrolandpoliticalconsiderationsineconomicmatters.Thenumberoftariffstheybegetviareciprocity.WeakenBalance-of-paymentspositions.Supply-and-demandpatterns.Internationalunderstanding(theycanstarttrad
8、ewars).RestrictManufacturer’supplysources.Choicesavailabletoc
