Policies That Affect Trade With Foreign Nations

Question:-

Choose five U.S. government policies that affect trade with foreign nations.

Answer:-

Five U.S. government policies that affect foreign trade are The General Agreement on Tariffs and Trade (GATT) Act of 1947, International Organic Trade Policy, Antidumping and Countervailing Duty Laws, the Generalized System of Preferences (GSP), and Trade Expansion Act of 1962 (Congressional Research Services, 2020). These policies are directed at the protection of US in the process of foreign trade. Some of these are advantageous for all parties while some are actually barriers to growth.

GATT aimed at reducing tariffs that prevented foreign trade. It resolved trade issues with several countries in terms of international trade relations. The World Trade Organization was the outcome of this act. The Tariff Act of 1930 established the Antidumping and Countervailing Duty Laws. This prevents foreign traders from undercutting producers in the US. Also, it prevents the malpractice of selling at less than fair value by offering financial incentives. The GSP was specially targeted at under-developed countries as a tool to promote economic advancement through the education of foreign trade. The Trade Expansion Act was directed at assistance to agriculture, labor and other home industries in USA.

The three factors of production that affect trade are technology, labor and capital resources. The changes in all of these factors affect the trade and mobility of the country. In the modern context the mobility of labor has formed a part of refugee insurgence. Decrease in labor population is a concern for the country and therefore the refugees are welcomed. In terms of capital mobility, the concerned areas are FDI and short-term foreign investments (Lim & Xavier, 2015). This helps the government in achieving political and financial objectives. The mobility of technology means increases in productivity but it also decreases the dependence on labor. In that case labor mobility can be a burden on the government.