Rhetorical context assignment Essay Example | Topics and Well Written Essays - 500 words

Rhetorical context assignment - Essay Example A poll, published the same day he delivered his speech, had it that only 26 per cent of the public approved his handling of the Vietnam War. With the rest 74 per cent being against his handling of the war, it was evident that majority were for the view that the United States should stop its bombardment of Northern Vietnam. The Pacifica Radio/UC Berkeley had reported that, the advisory body of current and retired President’s advisers that President Johnson constituted on Match 25 to 26, had advised him against increasing war troops in Vietnam in for peaceful negotiations. According to the HistoryPlace article titled, ‘President Lyndon Baines Johnson decides not to seek re-election’, there was popular and political erosion for the support of the war. The Democrats were against the decisions and led various demonstrations in America. Moreover, the Newshistory.com article titled ‘President Johnson Orders Air Strikes against North Vietnam’, had it that, th ere was a reason for America escalating the war on Vietnam because the Asian communists went on provoking America to shoot and bomb Northern Vietnam. In this case, there were different reactions on this topic according to different affiliations. As he stated in his speech, peaceful negotiations were the only way out, and this move was preferred by the rhetoric of the time. The rhetoric of stopping the Northern Vietnam bombardment and seeking peaceful negotiation inspired the president to deliver this speech. In this case, the rhetor was responding; to the idea that the bombardment of the Northern Vietnam should be de-escalated. Secondly the people’s opinion favored peaceful negotiations rather than war in approaching the situation in Vietnam. He used his speech to show the benefits of peaceful negotiations to the Northern Vietnam, a move which was meant to gladden the majority who were against his former stand. The rhetor was also aware that his

Research Proposal Example | Topics and Well Written Essays - 3000 words

Research Proposal Example Exemplary programs that effectively accomplish this goal can be seen as a model for others educational agencies in the area to follow. Due to the explosive growth of the at-risk population over the past few decades, it is now time to reflect on the successes and failures of various initiatives and policies designed to reverse the trend and help young people in this population graduate. Providing a wide range of educational options to at-risk youth is a relatively new concept in American education, but one that is gaining momentum nationwide. Educators and other interested stakeholders are now working hard to determine the types of programs that, if properly implemented, can help at-risk youth to be successful. The knowledge gained from this research study will be useful in providing much needed information to the public and private educational sectors. This study will, therefore, provide information that individuals associated with educating at-risk youth can use to implement more ef fective programs that reach this population in a positive way. Statement of the Problem The problem is that high school students around the country are dropping out of school at alarming rates (Bracy, 2006). ... 270). Many strategies being implemented today focus on the needs of students at-risk of dropping out of school prior to graduation. Community members and concerned stakeholders, namely the public at large, sincerely hope that these new initiatives will provide a much needed spark to the role that education plays in society and, in particular, to the at-risk student population. Significance of the Problem This proposed study is important because it will examine avenues that local and state governments can explore to encourage young people to graduate high school. Because many areas of the country have historically encountered great difficulty in this area, various programs have been introduced and developed over time to help address the problem. Current data indicates, however, that these programs are not having much, if any, impact on graduation rates in many areas (Quach, 2005, p. 71). This study will then focus on discovering those initiatives that proving effective and can serve a s models for future at-risk education in other localities across the country. American society has long feared the implications of an uneducated populace. The purpose of the educational system in this country has been predicated on the premise that teachers prepare young people to become positive contributors to society (Sadker & Sadker, 2010). The significance of this reality is that educated people tend to offer their community more valuable services and skills and are less likely to exhibit negative behaviors. Currently, however, America is suffering from high drop out rates and some states are beginning to see a significant decrease in the number of at-risk youth going on to

The Performance Of The Nestle Company Business Essay

The Performance Of The Nestle Company Business Essay Nestlà © is a multinational packaged food company founded and headquartered in Vevey, Switzerland. It came into being from a merger in 1905 between the Anglo-Swiss Milk Company for milk products established by the Page Brothers in Cham, Switzerland, in 1866 and the Farine Lactà ©e Henri Nestlà © Company set up in 1867 by Henri Nestlà © to provide an infant food product. Trademark of Nestlà © is birds in a nest, derived from Henri Nestlà ©s personal coat of arms, suggests the values upon which he originated his Company. Several of Nestlà ©s brands are globally renowned, which has made the company a global market leader in many product lines, including milk, chocolate, confectionery, bottled water pet food. (Strategic HRM, n.d.). Nestles Brands are: 1. Milk Nutrition 2. Beverages 3. Prepared dishes cooking aids 4. Chocolates confectioneries Objectives of Nestle To manufacture and market the Companys products in such a way as to create value that can be unremitting over the long term for shareholders, employees, consumers, and business partners. It does not favor short-term profit at the expense of successful long-term business development. It recognizes that its clients have a genuine and reasonable interest in the behavior, beliefs and actions of the Company behind brands in which they place their trust and that without its patrons the company would not exist. Nestlà © thinks that, as a common rule, legislation is the most useful protection of responsible demeanor, though in certain areas, extra supervision to staff in the form of deliberate business principles is advantageous consecutively to guarantee that the highest standards are met all the way through the organization. Nestlà © is aware of the fact that the success of a company is the expression of professionalism, conduct and the conscientious attitude of its management and employees. Consequently recruitment of the right people and constant training and development are essential. Nestlà © persists to preserve its dedication to follow and value all applicable local laws in each of its markets. (Strategic HRM, n.d.). Core values of Nestle A requirement for dealing with people is reverence and reliance. Integrity and transparency in dealing with people are very important for good communication. This is balanced by open dialogue with the purpose of sharing competencies and boosting creativity. To communicate is not only to notify; it is also to pay attention and to take on a discussion. The eagerness to collaborate, to facilitate others and to be trained is a requirement for progression and promotion in Nestle. (Strategic HRM, n.d.). Nestle is a human company Nestlà © is a human Company providing a rejoinder to individual human needs all over the world with explicit concern for the comfort of both its patrons and its employees. This can be seen in its approach and its sense of conscientiousness towards people. (Strategic HRM, n.d.). After analyzing Nestle it has been seen that it has to follow all three models High Performance, High Involvement High Commitment. Since Nestlà © simultaneously aspires to boost sales and profits and, to raise the standard of living everywhere, it is active and the quality of life for everyone. Nestlà © is also swayed that it is the people who form the vigor of the business and that nothing can be attained without their loyalty and their vigor, which makes people its most significant asset. Participation of people at all levels starts with suitable information on the Companys activities and on the explicit aspects of their work. Everyone is invited to contribute towards improvements enhancing Company results and personal progress through open communication and dynamic collaboration. (Strategic HRM, n.d.). Nestlà ©s Culture Theres a very strong organizational culture in Nestlà ©. It believes on team work. The head office provides the guide lines to the zonal managers and informs them about their budget limitation. The zonal managers are totally independent in constructing their plans and the usage of budget. Likewise, the regional managers are independent in their areas. They are given a specific target and a certain amount of budget. The discretion is theirs to make plan and attain the targeted result in the certain given budget. The internal control system of the organization is very strong and effective as well. Due to the strong check and balance, they can make eradications and amendments in their plans. If the plan does not work properly, the manager can take corrective measures. No one from the company can challenge his power. The betterment towards the achievement of goals can only be done through the collective commitment. (Nestle Report, n.d.) HR PRACTICES in Nestle Human resource planning and requirements in Nestlà © Planning consists of those guidelines which encompasses a sound basis for efficient and effective HR Management in the Nestlà © Group around the world. They are flexible and dynamic and may require adjustment to various circumstances. Hence its application will be influenced by good judgment, compliance of the local market laws, keeping in mind the specific context. Its spirit should be respected under all circumstances. As Nestlà © is operating all over the world, it is necessary that labor laws and practices be respected everywhere. Degree of development of each market and its capacity to advance in the management of their human resources should also be taken into consideration. (Nestle HRM, n. d.) HR policies are addressed to all those who have a liability in managing people as well as to HR professionals. The Nestlà © Management and Leadership Principles include the guidelines influencing all the Nestlà © employees in their action and in their dealings with others. The Corporate Business Principles comprises of the basic principles which Nestlà © endorses and subscribes to on a worldwide basis. Both these documents are the pillars on which Nestlà ©s present policy has been built. (Nestle HRM, n. d.) HR managers and their staff are there to provide professional support in handling employee matters but should not substitute themselves to the responsible manager. Their major liability is to contribute effectively to the quality of HR management throughout the organization by proposing adequate policies, ensuring their consistent application and coherent implementation with fairness. (Nestle HRM, n. d.) Recruitment The recruitment process at Nestle is evidently distinct. People with qualities like dynamism, realism, pragmatism, hard work, honesty and trustworthiness are welcomed there. Nestlà © follows a set process for hiring more employees. The major document in this connection is the Recruitment Requisition Form. A recruitment opportunity could arise either after discussing or planning a position on the termination of some employee or on an urgent need basis. After receiving the document the human resource department puts up an advertisement in the newspaper or it directly contacts placement officers at various institutes. Approximately eight to ten best resumes are selected and presented to the divisional heads. On their recommendation the candidates are called for interviews and the most suitable are finally selected. (Nestle HRM, n. d.) Training From the factory floor to the top management, training at Nestlà © is incessant. Since it is mainly given by Nestlà © people, it is always significant for the professional life. Throughout the world, each country runs its own training programs (e-Learning, classroom courses, external courses), and it has five training centers in France, UK, Spain, Mexico and Brazil. Nestle provides the following- Literacy training to promote vital literacy skills, particularly for workers who operate new equipment (Mission-directed Work Team Approach). Employees are also sent abroad to study markets, consumer tastes and others. Nestle Apprenticeship Programs. Local Training Programs-on issues ranging from technical, leadership, and communication and business economics. Rive-Reine, their International Training and Conference Centre in Switzerland is where Nestlà © people from all over the world meet to exchange information and ideas in seminars and training courses (Strategic HRM, n.d.). Performance management Formal assessment is done by Line Managers and HR once a year with feedback. Nestle gives subordinates the freedom to ask question for an unfair evaluation. Explicit key Performance Indicators have been listed by the HR department. One of the important key performance indicators is achievement following the Nestle management and leadership principles. Remuneration structure and promotion criterion depends on the individuals performance. (Strategic HRM, n.d.). Compensation Nestle endeavors to offer fair compensation. Remuneration level is above the average in industry. The inconsistent component of the salary is relatively immense to reward individual performance. In case of higher management level, the inconsistent part is associated with individual team target achievements. (Strategic HRM, n.d.). Rewards incentives Passion to Win awards- These quarterly awards have been institutionalized to reward those who over-achieve their targets. Long-service Awards are given to recognize employees who have been with the company for more than 30 years. Nestle Idea Award- the company institutes Nestle Idea Award every quarter to distinguish and honor employees who come up with significant and pioneering ideas which have the prospective of being implemented at Nestle. (Strategic HRM, n.d.). Benefits The following benefits are provided to all employees at Nestle Leave-Personal Medical (fixed no. per year). Children Education Assistance Scheme. Provident fund. Retirement Gratuity Scheme. Group Insurance Accidental Insurance Scheme. Conveyance Reimbursements. Residential Accommodation. Monthly health check-ups free consultation for self family etc. (Strategic HRM, n.d.). Employee relations Nestle provides a very healthy working environment which is one of the reasons why Nestlà ©s employees organizational commitment is very high. Employee turnover is less than 5%, which is considered to be very low for a multinational corporation. Nestle has an open culture upward communication particularly in case of grievance, redressal is encouraged. Work and Life stability is given substance, as illustrated in the Nestle Human Resource Policy document. Nestle Family annual events are organized by their HR department and employees along with their families are invited. Strong emphasis is laid on safety of employees (Nestle Policy on Health and Safety at Work. (Strategic HRM, n.d.). Change management Nestle has attuned to the dynamic external environment for the last 140 years since its commencement in 1866 without trailing its elementary beliefs and core values. It manages change and coerces sustainable advantageous growth by following the policy of making plodding changes as a substitute of making radical and precarious changes. (Strategic HRM, n.d.). Safety health Nestlà © considers its people as its most valuable asset and ranks the highest priority on protecting them. In every country where Nestle operate, it emphasizes the need for safe working environments, which must meet the strict global corporate standards. They are determined to provide a safe working environment for all employees, contractors and visitors and are vigilant in continuing to implement Health and Safety practices and programs at all the sites. à ¢Ã¢â€š ¬Ã‚ ¢ Valuing people by providing a safe place to work. à ¢Ã¢â€š ¬Ã‚ ¢ Identifying, assessing and reducing risk and preventing injury or illness to employees, contractors and visitors. à ¢Ã¢â€š ¬Ã‚ ¢ Operating business to meet health, safety, legislative and other requirements applicable to Nestlà ©. à ¢Ã¢â€š ¬Ã‚ ¢ Continually monitoring, reviewing and establishing new objectives aimed at eliminating or minimizing work related injury or illness. à ¢Ã¢â€š ¬Ã‚ ¢ Developing and implementing effective and efficient injury management systems which enable a safe and sustainable return to work for affected employees. à ¢Ã¢â€š ¬Ã‚ ¢ Providing information, training and supervision to employees and contractors to ensure they understand their roles and responsibilities in eliminating or minimizing the risk of workplace injury or illness. à ¢Ã¢â€š ¬Ã‚ ¢ Encouraging a similar Health and Safety commitment from our suppliers and contractors. à ¢Ã¢â€š ¬Ã‚ ¢ Consulting with employees and other stakeholders on Health and Safety matters. (Nestle HRM, n. d.) Contribution of human resource planning towards organizational objectives Nestle is the world leader in FMCG industry. People rely on the products offered by the company. Nestle in this present era is heading towards implementing and adopting new strategies to retain its customer and to get more clientele as well. Nestle tries to evaluate its strengths and weaknesses along with opportunities and threats to assess the need of implementing strategic policy. HR as discussed above plays a significant role to capturing and sustaining Nestle status and consumers in the market. This is possibly done through the constant effort on the part of strategic human resource management and their planning as discussed in this paper to keep up the pace with modern revolutions, technological advances and changing perceptions of the people and consumers world over. List of References Nestle HRM. (n.d.). Scribd Inc. Retrieved March 13, 2011 from http://www.scribd.com/doc/37163662/Nestlle-Project-HRM-Project Nestle Report. (n.d.). Scribd Inc. Retrieved March 13, 2011 from http://www.scribd.com/doc/30801788/Nestle-Report Strategic HRM. (n.d.). Scribd Inc. Retrieved March 13, 2011 from http://www.scribd.com/doc/6694518/StrategicHrm Upson, M. (2011). What is strategic human resource management? Retrieved March 14, 2011 from http://www.wisegeek.com/what-is-strategic-human-resource-management.htm Task 3 Briefing paper for the client Every organization has people; that implies they have human resources. Not considering the size of an organization or the extent of its resources, the organization endures and flourishes because of the competence and performance of its employees. The actions to take full advantage of those capabilities and that performance are essential regardless of whether the organization refers to them as Human Resource Management, Human Resource Development or Human Resources or has no official name for those actions at all. These activities are the liability of all people in the organization. (McNamara, n.d.). Implementation of straight-forward, unambiguous and brief HR policies and job descriptions are important for a number of reasons in an organization. Failing to implement policies and job descriptions leaves the company open to legal challenges, grievances and law charges, particularly if you contradictorily apply your human resources policies and your pay structure/system. (Absolute HR Solutions, n.d.). Grievances and lawsuits lead to: Increased costs that affect companys profits Increased turnover Negative morale The company can keep away itself from these troubles if you implement HR policies, procedures according to the labor laws. (Absolute HR Solutions, n.d.). The company requires human resources policies and procedures and current job descriptions so that the staff is treated uniformly athwart a variety of employment issues. Moreover, human resource polices facilitate if legal situations arise. (Absolute HR Solutions, n.d.). Impact of organizational structure and culture on the management of HR Organizational culture generates a number of diverse concepts, strategies, and situations which influence every level of scheduling when it comes to any type of hierarchical organization. The implications of organizational structure and culture apply to companies, corporations, charitable organizations, governments, and even sports teams/organizations. (Implications of Organization Structure Culture, 2007). Many leadership theorists and coaches have found that ineffective leadership often tends to be one of the major causes of an organizations retreating and deterioration. A governmental example from history can be ancient Rome. During a series of terrible emperors, the structure and culture was strong enough to often overcome it, even for decades at a time-but without strong top end leadership eventually the mid level governing and organizational culture collapsed, resulting in the ultimate failure of the culture. To be healthy for the long term, a corporation must have strong human resource management, leadership and a strong organizational culture. Though some of the strongest companies or organizations may be able to tread water for a long period of time, or even do well, if the culture starts to erode, its only a matter of time until the larger structure collapses. (Implications of Organization Structure Culture, 2007). Enormous human resource management and good leadership is needed for an organization to have strong culture, even great organizational culture will eventually become dull, and then erode completely without strong HR to help keep everything running smoothly. (Implications of Organization Structure Culture, 2007). Leaders must have a deep understanding of the identity and impact of the organizational culture in order to understand what kind of human resource management and adjustment is needed within the company, as well as perceiving how to communicate their vision to the rest of the company. (Implications of Organization Structure Culture, 2007). From corporations to government to sports teams, the study of how structure and culture impacts the management can reflect a better way to make an entity work. Use a sports team as an example: most teams who have the only head coach as the GM doesnt do well as compared to the teams who split the duties between two individuals who can work together towards the same common goal. (Implications of Organization Structure Culture, 2007). Recommendations to improve the effectiveness of HRM Organizational efficacy depends on having the right people in the right jobs at the right time to meet quickly changing organizational needs. Right people can be selected by performing the role of Human Resource function. A strategic approach to managing employment relations which emphasizes that leveraging peoples capabilities is critical to achieving sustainable competitive advantage, this being achieved through a distinctive set of integrated employment policies, programs and practices. According to this human resource management should not only handle recruitment, pay, and discharging, but also must make the most of an organizations human resources in a more strategic manner. An important aspect of an organizations business focus and direction towards achieving high levels of competency and competitiveness would depend very much upon their human resource management practices to contribute effectively towards profitability, quality, and other goals in line with the mission and vis ion of the company. Staffing, training, compensation and performance management are fundamentally central tools in the human resources practices that shape the organizations role in satisfying the needs of its stakeholders. Common rules and procedures of human resource management must be adhered to by the organization which forms basic guidelines on its practices. Teamwork amongst lower levels of staff and the management should be formed and continue to assist in various aspects that would reckoned necessary in eliminating communication breakdowns and encourage better relationship among workers. The management should emphasize on first-rate corporate culture in order to develop employees and generate an optimistic and favorable work environment. An HR strategy should aim to capture the people element of what an organisation is tending to achieve in the long run, guarantying that It has the right people in place It has the right mix of skills Employees display the right attitudes and behaviors, Employees are developed in the right way. (Groenewald, 2011).

Free Awakening Essays: The Pigeon House :: Chopin Awakening Essays

The Pigeon House in The Awakening "In a little four-room house around the corner. It looks so cozy, so inviting and restful."(79) With this description Chopin introduces the reader to Edna’s new residence, which is affectionately known as the pigeon house. The pigeon house provides Edna with the comfort and security that her old house lacked. The tranquility that the pigeon house grants to Edna allows her to experience a freedom that she has never felt before. The first taste of this newfound freedom is the satisfaction that Edna feels in being able to provide for herself with her own money. The fact that she no longer has to rely on her husband’s money breaks the last tie that she had with him: "I know I shall like it, like the feeling of freedom and independence."(80) In her mind now, her marriage is dead, and Mr. Pontellier has no control over her. Financial freedom is not the only thing the pigeon house gives to Edna; it also allows her both physical and spiritual freedom. When Edna kisses Arobin in her husband’s house, she feels "reproach looking at her from the external things around her which he had provided for her external existence."(84) Yet, her first night at the pigeon house she spends with Arobin, and this time feels no reproach or regret. As for the spiritual ramifications provided by her new home, Chopin writes, "There was a feeling of descending in the social scale, with the corresponding sense of having rise n in the spiritual.., she began to look with her own eyes... no longer was she content to feed upon opinion."(94) The pigeon house provides a way for Edna to escape from the society that she hates. She has the freedom to make the decisions in her life now; and she decides that she is going to live life by her own rules, not the rules that society has laid out for her. When she is within her home, she is free from the pressures of being the "mother women" which society forces her to be. The pigeon house nourishes this newfound freedom, allowing it to grow and gain strength. Without the environment provided by the pigeon house, it is doubtful as to whether Edna would have ever "awakened" from the stupefied state that society was forcing her to live in.

Use of Angels in Smith’s Annunciation and Plath’s Black Rook in Rainy W

Use of Angels in Smith’s Annunciation and Plath’s Black Rook in Rainy Weather  Ã‚   Since biblical times, people have looked to angels as sources of comfort, inspiration, protection, and solace. Yet very little is said in the Bible about what angels actually are; the Bible focuses mainly on their deeds, and leaves their nature to the imagination. Consequently, few people really understand them, and the very notion of angels is a rather open-ended idea subject to personal interpretation and design. Poets, never ones to let a chance at interpretation go by, have written about angels, using them as both subject and metaphor. Two poems of note where angels are used as metaphors are "Annunciation", by Kay Smith and "Black Rook in Rainy Weather", by Sylvia Plath. In these poems, angels are referenced not for their own sake, but rather for the metaphorical meanings which the reader may glean from them. In "Annunciation", Smith uses an angel to represent greatness left pursued yet unattained a life, while Plath uses angels to represent unusual occurences which brighten or a dd meaning to an otherwise dreary life. "Annunciation" begins with a note about the standard artistic depiction of the Annunciation, in which the angel Gabriel appears to the Virgin Mary to declare that she will be the Mother of God. Smith notes that in paintings of the event, Mary is always reading a book; she seems trying to keep her place in the book, despite the arrival and great presence of Gabriel. In the poem, Smith herself paints a portrait of a young girl at a crossroads: two girls at a museum in Italy on some sort of trip. "We two sometimes women" (line 20) implies that the girls are fairly young, but since they seem to be alone together they have likel... ...vene in the lives of the faithful in times of trial. Plath uses angels as a metaphor for strength and hope in a time of darkness. Angels are so commonly felt but poorly understood that it is possible to attach many different meanings to them. In poetry, angels can represent a spectrum of ideas and feelings, from awe to hope to strength to fear, just to list a few examples. In "Annunciation", Kay Smith uses the majesty and biblical significance of the angel Gabriel to represent a feeling of greatness and destiny that the speaker let slip through her grasp. In "Black Rook in Rainy Weather", Sylvia Plath uses angels to symbolize the brightness and hope that make an otherwise bleak and dreary life livable. Clearly, angels, like our lives themselves, can have whatever meaning we choose endow upon them. "In the arms of the angels, may you find some comfort here."

My Scholarship

Learning is never confined within the four walls of a classroom. However, it is through the four portals of the academe wherein the appreciation of learning begins. It is a domain wherein Ideas and theories clash, different views and perspectives are expressed and the onward steps to civilization are witnessed. Indeed, the education system is one of the most potent instruments of every country. It establishes the foundation of a strong and every state. Anyone who receives good training is armed with confidence, stature and grace. Education acts as an efficient shield against any adversities that are encountered in the real world. An educated individual enjoys the privileges of encountering different chances and opportunities that can improve his or her life and therefore contribute to the whole community. For every parent, seeing their child attain a degree is something that they can be proud of. All the years of struggles and hardships has finally come to an end since education is indeed, one of the best gifts that any parent can provide. Likewise, this scenario has also created a great impact and change in my life. It has been quite some time when I received my high school diploma. Looking back, the ephemeral and nostalgic moments bring back a hodge-podge of bitter-sweet memories. But I guess, none can be sweeter when I was admitted in the College of Technology. The institution offers two year courses to bachelor degrees in computer-related courses such as programming, network administration etc. The institution is known for drafting students who have the potential to pursue a bachelor degree. For two and a half years, I have survived all the storms that came along my way. It was indeed a great battle, but I managed to pull it off. All the blood, sweat and tears that I have rendered are worth the wait since I was able to finish my two year course. However, this did not prevent me from achieving one of my most precious dreams—and that is to attain a bachelor degree. Fueled with motivation and desire, I started to work so that I can support myself. Afterwards, I gathered all my guts and applied for a degree in the college. Unfortunately, my hopes and dreams seemed to disappear into thin air. My GBA did not qualify. The college requires a grade of more than three and a half. I must admit that at some point I felt discouraged. It seemed that hope has finally betrayed me. But then again, the warrior in me refused to give up.   I know that rough seas make a skillful sailor. I continued working for three long years. I consider it as a blessing when I was immediately hired right after I graduated. Those opportunities do not usually come to other individuals. Others have to wait for months before they can finally get a decent job. Mostly of my previous work were on a temporary basis. Yet in a short span of time that I have stayed in a particular company, I have gained a lot. The experiences I have encountered exposed me to different situations wherein my decision making skills were continuously challenged. Those were the times when I seized the opportunity to develop more of my talents and skills. I knew that in the future, I would surely benefit from it. During those moments, each day is a lesson learned mistakes to correct and small steps to the fulfillment of my long term goals and dreams. As I overcome the challenges that I encountered I am gaining more experiences that are related to my course. The jobs that I have entered served as a good training ground and inspiration for me to pursue my dreams. As I continue with my life, the awaited opportunity came and knocked me off by surprise. The minister of high education announced that the government is now opening its doors to individuals who want to pursue their degrees in the United States. Scholarships were offered to those who are highly interested. At first, I have no idea that such situation would occur. This is most especially true when the 9/11 attacks took place. Before the tragic event, the ministry of the higher education used to launch scholarship programs to different countries. These include the United States and the United Kingdom. However, when the attacks occurred, scholarship programs in the United States were suspended until 2004. By the time 2004 came, the king of Saudi Arabia negotiated with the American government. The two parties decided to open the scholarship program once again. At first I was having doubts on whether I should seize such opportunity—to a certain extent that the mere thought of applying for the scholarship program sent shiver to my spine. Finally I gathered all my guts and fill out the online application. Hesitations, anxieties and nervousness accompanied me as I answered every question. Will I be accepted? Will I be rejected? These are the questions that entered my mind. Deep inside of me, I know that I have the smallest chances of being accepted. I know that there are other individuals who are better than me and competition is indeed very fierce and stiff. Yet, ten minutes after, a shocking revelation engulfed my soul. I received an email stating that I was chosen as one of the scholarship program’s candidates. At first, I cannot believe my eyes. It seemed like I was trapped in a beautiful dream wherein waking up translates to a sorrowful requiem. Honestly, I found it hard to convince myself that I was among the chosen few. There are many aspirants and I am included in the crà ¨me of the crop. A miracle was happening and I could not believe my eyes. All the memories that I had three years ago flash back. During those times I was heavily preoccupied in processing my application for a university in Saudi Arabia and several minutes later, the last thing I knew was that I was already a candidate for the United State’s scholarship program. I wasted no time and immediately processed all my papers and necessary documents. I now have the chance and the opportunity that I have been waiting for such a long time. Now that it was already within my grasp, I never wanted it to vanish in an instant. Upon the completion of the requirements, I submitted it to the ministry of higher education. Afterwards, I got my schedule for the initial interview. Armed with courage and bravery I faced the scrutinizing eyes and critical minds of the panelists. The panel was comprised of respectable members of the academe. Doctors and professors who are working in Saudi Arabia universities are chosen to be among the panelists and they know whether the applicants or students were serious via asking certain questions like: why are you going there? and why did they choose such majors? Through answering those questions, the panel determined whether the applicant is indeed serious about the scholarship program. I was hoping that I would pass the interview and my instincts never failed me. I saw my name in the list. A month later, I was required to take yet another test. It is similar to SAT which seems to be its counterpart in Arabic. The exam concentrated on math, physics and chemistry. When I was told that I passed the exam, I could not feel anything but joy and excitement. I was aware that I was already on the final step. I had another interview in the United States’ embassy in Saudi Arabia. This time, the interview is for my visa. An American guy asked me questions that are related to my degree of specialization, the reason behind choosing it, the state where I came from and how long will I stay in the country. I gathered all my confidence and answered all the questions with honesty. After that I was told that I will get my visa after a week. Within the week, I was filled with joy and enthusiasm as I received my passport and student’s visa. The long wait is over, my destiny’s already fulfilled.   

The Political Economy of International Trade

The Political Economy of International Trade Chapter Outline OPENING CASE: Why Are Global Food Prices Soaring? INTRODUCTION INSTRUMENTS OF TRADE POLICY Tariffs Subsides Country Focus: Subsidized Wheat Production in Japan Import Quotas and Voluntary Export Restraints Local Content Requirements Administrative Polices Antidumping Policies Management Focus: U. S. Magnesium Seeks Protection THE CASE FOR GOVERNMENT INTERVENTION Political Arguments for Intervention Country Focus: Trade in Hormone-Treated Beef Economic Arguments for Intervention THE REVISED CASE FOR FREE TRADE Retaliation and Trade War Domestic Politics DEVELOPMENT OF THE WORLD TRADING SYSTEM From Smith to the Great Depression 1947-1979: GATT, Trade Liberalization, and Economic Growth 1980-1993: Protectionist Trends The Uruguay Round and the World Trade Organization WTO: Experience to Date The Future of the WTO: Unresolved Issues and the Doha Round Country Focus: Estimating the Gains from Trade for America FOCUS ON MANAGERIAL IMPLICATIONS Trade Barriers and Firm Strategy Policy Implications SUMMARY CRITICAL THINKING AND DISCUSSION QUESTIONS CLOSING CASE: Agricultural Subsidies Learning Objectives 1. Describe the policy instruments used by governments to influence international trade flows. 2. Understand why governments sometimes intervene in international trade. 3. Articulate the arguments against strategic trade policy. 4. Describe the development of the world trading system and the current trade issues. 5. Explain the implications for managers of developments in the world trading system. Chapter Summary This chapter begins with a discussion of the six main instruments of trade policy, including tariffs, subsidies, import quotas, voluntary export estraints, local content requirements, and administrative policies. This section is followed by a discussion of the merits of government intervention into international trade. The author provides a balanced view of this difficult issue. The second half of the chapter focuses on the development of the global trading system. A historical context is provided, along with a view of the global trading system as it exis ts today. The author acquaints the reader with the General Agreement on Trade and Tariffs (GATT) and the World Trade Organization. Opening Case: Why Are Global Food Prices Soaring? Summary The opening case examines why global food prices are rising significantly. For more than two decades, improvements in agricultural productivity and output have contributed to lower food prices, but in 2007, the price of wheat was double its price of just a few months earlier, and the price of corn had risen some 60 percent. Two explanations for the phenomenon are increased demand, and the effects of tariffs and subsidies for bio-fuels. Discussion of the case can revolve around the following questions: QUESTION 1: Food prices have risen dramatically since 2007. Reflect on the reasons for the price increase, and discuss the implications of higher prices for consumers in developed and developing countries. ANSWER 1: For decades, consumers have enjoyed the benefits of increased productivity and output in the global food industry. In 2007, however, everything changed. The price of wheat reached its highest point ever, and the price of corn rose 60 percent over its 2006 price. Two factors contributed to this situation. The first was the increased demand for food from China and India. The second factor involved tariffs and subsidies for bio-fuels. Farmers in the European Union and in the United States are currently the recipients of subsidies for the production of crops used in bio-fuels. As a result, land that might be used for growing food is being converted to bio-fuel crops, pushing up prices on food. While some experts believe that sugar cane may be a better product for bio-fuel production than corn, tariffs on imported sugar cane effectively are keeping the crop out of the market. While all consumers are feeling the pain of higher food prices, the situation is especially dire for consumers in poor countries where calorie intake could be reduced by as much as -8 percent by 2020. QUESTION 2: How has demand for bio-fuels affected the price of food? What are the implications of this trend? Reflect on the role of government in pushing prices up. What role do tariffs and subsidies play in the situation? In your opinion, should the governments of the United States and the European Union bear any responsibility for bringing food prices back down? ANSWER 2: In an effort to slow global warming, both the European Union and the United States have adopted policies designed to increase the production of ethanol and bio-diesel. The policies involve providing subsidies to farmers. The net effect of the subsidies is to encourage farmers to produce less food, and more crops that can be used in bio-fuel production. The situation is exacerbated by high tariffs on alternative products that can be used for bio-fuel production – particularly sugar cane. Most students will recognize that the combined effect of the subsidies and tariffs are creating a difficult situation for consumers, while at the same time protecting producers. Some students may note the irony of the situation. Consumers, hit by higher prices at the pump are putting more pressure on companies to develop cheaper and more environmentally friendly sources of energy, but in doing so are actually contributing to higher prices at the grocery store. Some students may wonder whether it makes more sense to consider non-food related sources of energy. Honda Motors is currently developing a car that runs on Teaching Tip: To expand this discussion, consider {http://www. businessweek. com/bwdaily/dnflash/content/may2008/db20080513_317940. htm? chan=search}, {http://www. usinessweek. com/globalbiz/content/may2008/gb20080520_439607. htm? chan=search}, and {http://www. businessweek. com/magazine/content/08_19/b4083026413508. htm? chan=search}. Video Note: There are two iGlobes directly related to this case. The first is Supply, Price of Food Increase Hardship for World’s Poor, and the second is Agricultural Problems Lead to Farmer Suicides in India. Chapter Outline with Lecture Notes, Video Notes, a nd Teaching Tips INTRODUCTION A) This chapter explores the political reality of international trade. Free trade refers to a situation where a government does not attempt to restrict what its citizens can buy from another country or what they can sell to another country. While many nations are nominally committed to free trade, they tend to intervene in international trade to protect the interests of politically important groups. B) The major objective of this chapter is to describe how political realities have shaped, and continue to shape, the international trading system. INSTRUMENTS OF TRADE POLICY A) In this section, the text reviews seven main instruments of trade policy. These are: tariffs, subsidies, import quotas, voluntary export restraints, local content requirements, antidumping policies and administrative policies. Tariffs B) A tariff is a tax levied on imports (or exports) that effectively raises the cost of imported (or exported) products relative to domestic products. Specific tariffs are levied as a fixed charge for each unit of a good imported, while ad valorem tariffs are levied as a proportion of the value of the imported good. The important thing to understand about a tariff is who suffers and who gains. The government gains, because the tariff ncreases government revenues. Domestic producers gain, because the tariff affords them some protection against foreign competitors by increasing the cost of imported foreign goods. Consumers lose since they must pay more for certain imports. C) Thus, tariffs are unambiguously pro-producer and anti-consumer, and tariffs reduce the overall efficiency of the world economy. Subsidies D) A subsidy is a government payment to a domestic producer. By lowering costs, subsidies help domestic producers in two ways: they help producers compete against low-cost foreign imports and they help producers gain export markets. However, many subsidies are not that successful at increasing the international competitiveness of domestic producers. Moreover, consumers typically absorb the costs of subsidies. Country Focus: Subsidized Wheat Production in Japan Summary This feature explores the subsidies Japan continues to pay its wheat farmers. Tens of thousands of Japanese farmers continue to grow wheat despite the fact that the wheat grown in North America, Argentina, and Australia is far cheaper and of superior quality. The Japanese farmers stay in business thanks to the hefty subsidies paid by the Japanese government. As a result, wheat prices in Japan are substantially higher than they would be if a free market were allowed to operate. Suggested Discussion Questions 1. Who are the winners and who are the losers from Japanese wheat subsidies? Discussion Points: Students will probably recognize that, as is usually the case with protectionist measures, the subsidies Japan pays its wheat farmers benefit the farmers, but cost the average consumer in the form of higher wheat prices. In fact, in 2004, Japanese consumers covered $700 million in subsidies! The subsidies also limit imports of wheat, which negatively affects foreign wheat farmers. 2. Why does Japan continue to subsidize its wheat farmers when cheaper wheat is readily available in international markets? Discussion Points: Thanks to subsidies, wheat prices in Japan are between 80 and 120 percent higher than they are in world markets. In fact, if the subsidies were eliminated, Japanese wheat production would cease entirely. However, at least for now, because politicians count on the votes of the wheat farmers, there appears to be no plan to end the subsidies. Teaching Tip: To extend this discussion, consider discussing Japan’s role in the production of rice. For more on this, go to {http://www. businessweek. com/globalbiz/content/may2008/gb20080522_132137. htm? chan=search}, and {http://www. businessweek. com/globalbiz/content/may2008/gb20080522_132137_page_2. htm}. Import Quotas and Voluntary Export Restraints E) An import quota is a direct restriction on the quantity of some good that may be imported into a country. A tariff rate quota is a hybrid of a quota and a tariff where a lower tariff is applied to imports within the quota than to those over the quota. A voluntary export restraint is a quota on trade imposed by the exporting country, typically at the request of the importing country’s government. F) While import quotas and voluntary export restraints benefit domestic producers by limiting import competition, they raise the prices of imported goods. The extra profit that producers make when supply is artificially limited by an import quota is referred to as a quota rent. Local Content Requirements G) A local content requirement demands that some specific fraction of a good be produced domestically. As with import quotas, local content requirements benefit domestic producers, but consumer face higher prices. Administrative Policies H) Administrative trade polices are bureaucratic rules that are designed to make it difficult for imports to enter a country. The effect of these polices is to hurt consumers by denying access to possibly superior foreign products. Antidumping Policies I) Dumping is variously defined as selling goods in a foreign market below their costs of production, or as selling goods in a foreign market at below their â€Å"fair† market value. Dumping is viewed as a method by which firms unload excess production in foreign markets. Alternatively, some dumping may be the result of predatory behavior, with producers using substantial profits from their home markets to subsidize prices in a foreign market with a view to driving indigenous competitors out of that market. Once this has been achieved the predatory firm can raise prices and earn substantial profits. J) Antidumping polices (also known as countervailing duties) are policies designed to punish foreign firms that engage in dumping. The ultimate objective is to protect domestic producers from â€Å"unfair† foreign competition. Management Focus: U. S. Magnesium Seeks Protection Summary This feature explores the dumping charged levied by U. S. Magnesium against Chinese and Russian producers. According to U. S. Magnesium, the sole American producer of magnesium, Russian and Chinese producers were selling magnesium significantly below market value in an effort to drive U. S. Magnesium out of business. The company failed a complaint with the International Trade Commission (ITC) which ultimately ruled in favor of U. S. Magnesium. Suggested Discussion Questions 1. What is dumping? Were Chinese and Russian producers guilty of dumping? How did U. S. Magnesium justify its claims against Russian and Chinese producers? Discussion Points: Dumping is defined as selling goods in a foreign market below the cost of production, or below fair market value. In 2004, U. S. Magnesium claimed that China and Russia had been dumping magnesium in the United States. The company noted that in 2002 and 2003, magnesium imports rose, and prices fell. While the ITC ruled in favor of the American company, some students might question whether the fact that the Chinese could sell their product at low prices might simply reflect the country’s significantly lower wage rates. . What does the ITC’s ruling mean for American consumers of magnesium? In your opinion, was the ruling fair? Discussion Points: The ITC ruled in favor of U. S. Magnesium finding that indeed China and Russia had been dumping their product in the United States. Fines ranging from 50 to 140 percent on imports were imposed against China, and 19 to 22 percent on Russian com panies. Most students will note that while the ITC’s decision is a good one for U. S. Magnesium and its employees. for consumers, the ruling means magnesium prices that are significantly higher than those in world markets. Students will probably argue that this result is unfair, and should be revisited. Teaching Tip: U. S. Magnesium’s web site is available at {http://www. usmagnesium. com/}. THE CASE FOR GOVERNMENT INTERVENTION A) In general, there are two types of arguments for government intervention, political and economic. Political arguments for intervention are concerned with protecting the interests of certain groups within a nation (normally producers), often at the expense of other groups (normally consumers). Economic arguments for intervention are typically concerned with boosting the overall wealth of a nation (to the benefit of all, both producers and consumers). Political Arguments for Intervention B) Political arguments for government intervention cover a range of issues including protecting jobs, protecting industries deemed important for national security, retaliating against unfair foreign competition, protecting consumers from â€Å"dangerous† products, furthering the goals of foreign policy, and protecting the human rights of individuals in exporting countries. Protecting Jobs and Industries C) The most common political reason for trade restrictions is â€Å"protecting jobs and industries. † Usually this results from political pressures by unions or industries that are threatened by more efficient foreign producers, and have more political clout than the consumers who will eventually pay the costs. National Security D) Protecting industries because they are important for national security is another argument for trade restrictions. The U. S. overnment protects industries like steel, aerospace, and electronics, on the basis of this argument, and has made special arrangements to protect the semiconductor industry. Lecture Note: In the United States, the Bureau of Export Administration enhances the nation's security and its economic prosperity by controlling exports for national security, foreign security, foreign policy, and short supply reasons. To learn more, go to {http://www. bis. doc. gov/about/index. htm}, click on Policies and R egulations and then on Export Administration Regulations. . Retaliation E) Government intervention in trade can be used as part of a â€Å"get tough† policy to open foreign markets. By taking, or threatening to take, specific actions, other countries may remove trade barriers. But when threatened governments do not back down, tensions can escalate and new trade barriers may be enacted. Lecture Note: The trading relationship between China and the United States is an ongoing topic of discussion for many. To expand the discussion on the role of government and retaliatory trade measures, consider {http://www. businessweek. om/globalbiz/content/may2008/gb20080528_845850. htm? chan=search} Protecting Consumers F) Consumer protection can also be an argument for restricting imports. The Country Focus below suggests that the European Union’s concern over beef was, in part, due to an interest in protecting consumers. Since different countries do have different health and safety standards, what may be acceptable in one country may be unacc eptable in others. Furthering Foreign Policy Objectives G) On occasion, governments will use trade policy to support their foreign policy objectives. One aspect of this is to grant preferential trade terms to countries that a government wants to build strong relations with. Trade policy has also been used several times as an instrument for pressuring punishing â€Å"rogue states† that do not abide by international laws or norms. In recent years the United States has imposed trade restrictions against Libya, Iran, Iraq, North Korea, Cuba, and other countries where governments were pursuing policies that were not viewed favorably by the U. S. government. A serious problem with using trade as an instrument of foreign policy is that other countries can undermine any unilateral trade sanctions. The U. S. Congress has passed two acts, the Helms-Burton Act and the D’Amato Act, in an effort to protect American companies from such actions. Protecting Human Rights H) Concern over human rights in other countries plays an important role in foreign policy. Governments sometimes use trade policy to improve the human rights policies of trading partners. Governments also use trade policies to put pressure on governments to make other changes. Unless a large number of countries choose to take such action, however, it is unlikely to prove successful. Some critics have argued that the best way to change the internal human rights of a country is to engage it in international trade. The decision to grant China most favored nation status was based on this philosophy. Country Focus: Trade in Hormone-Treated Beef Summary This feature describes the trade battle between the United States and the European Union over beef from cattle that have been given growth hormones. It outlines the basic issues that led to the dispute, and shows how the World Trade Organization has treated the case. Suggested Discussion Questions 1. Why is the European Union so concerned about beef from cattle that have been given growth hormones? Discussion Points: Some students may argue that the European Union’s ban on growth hormones in cattle was little more than a thinly veiled form of protectionism. Australia, New Zealand, and Canada, which also use the hormones in their cattle industry, were also affected by the ban. The European Union claimed that it was merely protecting the health of its citizens, however studies showed that the hormones posed no health issues for people. 2. Why did the WTO rule against the European Union? Discussion Points: The World Trade Organization ruled against the European Union stating that the European Union’s ban on imported hormone treated beef had no scientific justification. Even so, the European Union refused to lift the ban, which had strong public support, and in the end, the European Union was assessed punitive tariffs. The European Union held on to its principles though, and as of 2008, continued to maintain its restrictions on hormone treated beef despite the resulting punitive tariffs. Teaching Tip: The WTO maintains a site for students. Go to {www. wto. org} and click on the students icon to search the site, research countries, and even see a list of internships that are available at the WTO. Economic Arguments for Intervention I) Economic arguments for intervention include the infant industry argument and strategic trade policy. The Infant Industry Argument J) The infant industry argument suggests that an industry should be protected until it can develop and be viable and competitive internationally. Unless an industry is allowed to develop and achieve minimal economies of scale, foreign competitors may undercut prices and prevent a domestic industry from developing. The infant industry argument has been accepted as a justification for temporary trade restrictions under the WTO. K) A problem with the infant industry argument is determining when an industry â€Å"grows up. † Some industries that are just plain inefficient and uncompetitive have argued they are still infants after 50 years. The other problem is that given the existence of global capital markets, if the country has the potential to develop a viable competitive position its firms should be capable of raising the necessary funds without additional support from the government. Strategic Trade Policy L) Strategic trade policy suggests that in cases where there may be important first mover advantages, governments can help firms from their countries attain these advantages. Strategic trade policy also suggests that governments can help firms overcome barriers to entry into industries where foreign firms have an initial advantage. THE REVISED CASE FOR FREE TRADE A) While strategic trade policy identifies conditions where restrictions on trade may provide economic benefits, there are two problems that may make restrictions inappropriate: retaliation and politics. Retaliation and Trade War B) Krugman argues that strategic trade policies aimed at establishing domestic firms in a dominant position in a global industry are beggar-thy-neighbor policies that boost national income at the expense of other countries. A country that attempts to use such policies will probably provoke retaliation. Domestic Politics C) Governments do not always act in the national interest when they intervene in the economy. Instead special interest groups may influence governments. Thus, a further reason for not embracing strategic trade policy, according to Krugman, is that such a policy is almost certain to be captured by special interest groups within an economy, who will distort it to their own ends. DEVELOPMENT OF THE GLOBAL TRADING SYSTEM A) Many governments recognize the value of unrestricted free trade, but are hesitant to unilaterally lower their trade barriers in case other countries do not follow suit. Since World War II, and international trading framework has evolved that enables governments to negotiate a set of rules to govern cross-border trade and lower trade barriers. For the first 50 years, the framework was known as the General Agreement on Tariffs and Trade (GATT). More recently, it has been known as the World Trade Organization (WTO). From Smith to the Great Depression B) Up until the Great Depression of the 1930s, most countries had some degree of protectionism. Great Britain, as a major trading nation, was one of the strongest supporters of free trade. C) Although the world was already in a depression, in 1930 the United States enacted the Smoot-Hawley Act, which created significant import tariffs on foreign goods. As other nations took similar steps and the depression deepened, world trade fell further. 1947-1979: GATT, Trade Liberalization, and Economic Growth D) After WWII, the U. S. and other nations realized the value of freer trade, and established the General Agreement on Tariffs and Trade (GATT). E) The approach of GATT (a multilateral agreement to liberalize trade) was to gradually eliminate barriers to trade. Over 100 countries became members of GATT, and worked together to further liberalize trade. Teaching Tip: A full review of GATT, containing an actual copy of the agreement, is available at {http://www. ciesin. org/TG/PI/TRADE/gatt. html}. 1980-1993: Protectionist Trends F) During the 1980s and early 1990s the world trading system as â€Å"managed† by GATT came under strain. First, Japan’s economic strength and huge trade surplus stressed what had been more equal trading patterns, and Japan’s perceived protectionist (neo-mercantilist) policies created intense political pressures in other countries. Second, persistent trade deficits by the United States, the world’s largest economy, caused significant economic problems for some industries and political problems for the government. Third, many countries found that although limited by GATT from utilizing tariffs, there were many other more subtle forms of intervention that had the same effects and did not technically violate GATT (e. g. VERs). The Uruguay Round and the World Trade Organization G) Against the background of rising protectionist pressures, in 1986 GATT members embarked on their eighth round of negotiations to reduce tariffs (called the Uruguay Round). This was the most ambitious round to date. Services and Intellectual Property H) One goal was to expand beyond the regulation of manufactured goods and address trade issues related to services and intellectual property, and agriculture. The World Trade Organization Lecture Note: To see current issues at the WTO, go to {http://www. wto. org/} and click on â€Å"News. † I) When the WTO was established, its creators hoped the WTO’s enforcement mechanisms would make it a more effective policeman of the global trade rules than the GATT had been. The WTO encompassed GATT along with two sister organizations, the General Agreement on Trade in Services (GATS) and the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). WTO: Experience to Date J) At the time of its establishment, the great hope was that the WTO might emerge as an effective advocate and facilitator of future trade deals, particularly in such areas as services. In general, the experience so far has been encouraging. WTO as Global Police K) So far, the WTO’s policing and enforcement mechanisms are having a positive effect. In general, countries have adopted WTO recommendations for trade disputes. Expanding Trade Agreements L) In 1997, 68 countries that account for more than 90 percent of world telecommunications revenues pledged to open their markets to foreign competition and to abide by common rules for fair competition in telecommunications. Similarly, 102 countries pledged to open to varying degrees their banking, securities, and insurance sectors to foreign competition. Like the telecommunications deal, the agreement covers not just cross-border trade, but also foreign direct investment. The WTO in Seattle: A Watershed? M) The 1999 meeting of the WTO in Seattle was important not only for what happened between the member countries, but also for what occurred outside the building. Inside, members failed to agree on how to work toward the reduction of barriers to cross-border trade in agricultural products and cross-border trade and investment in services. Outside, the WTO became a magnet for various groups protesting free trade. The Future: Unresolved Issues and the Doha Round N) Substantial work still remains to be done on the international trade front. Four issues on the current agenda of the WTO are the rise of anti-dumping policies, the high level of protectionism in agriculture, the lack of strong protection for intellectual property rights in many nations, and continued high tariffs on nonagricultural goods and services in many nations. Lecture Note: The European Union’s trade commissioner is urging nations to complete Doha round negotiations prior to the beginning of a new administration in the United States. Further details can be found at {http://www. businessweek. com/globalbiz/content/jan2008/gb20080128_519854. htm? chan=search}. Anti-Dumping Actions O) There has been a proliferation of antidumping actions in recent years, perhaps because of the rather vague definition of what constitutes dumping. The WTO is encouraging members to strengthen the regulations governing the imposition of antidumping duties. Protectionism in Agriculture P) The WTO is concerned with the high level of tariffs and subsidies in the agricultural sector of many economies. However, the advanced countries of the world defend the current system because they want to protect their producers from lower-cost producers from developing nations. Protecting Intellectual Property Q) The agreement to protect intellectual property (TRIPS) obliges WTO members to grant and enforce patents lasting at least 20 years and copyrights lasting 50 years. The basis for this agreement was a strong belief among signatory nations that the protection of intellectual property rights is an essential element of the international trading system. Market Access for Nonagricultural Goods and Services R) The WTO would like to bring down tariff rates on nonagricultural goods and services, and reduce the scope for the selective use of high tariff rates. The hope is that at some point, rates would move to zero. Country Focus: Estimating the Gains from Trade for America Summary This feature explores the results of a study by the Institute for International Economics. The study, which estimated the gains to the U. S. economy from free trade, found that the United States’ GDP was more than 7 percent higher as a result of reductions in trade barriers than it would have been if the barriers remained. The study also estimated that if tariffs were reduced to zero, significant gains would still result. Suggested Discussion Questions 1. What does the Institute for International Economics suggest about the benefits of free trade? Discussion Points: The Institute for International Economics found that thanks to reductions in trade restrictions, the United States’ GDP was up. The Institute also estimated that even greater gains in the country’s GDP would occur if protectionism was eliminated all together. Students should recognize that these findings follow the principles of Adam Smith and David Ricardo and suggest that free trade is beneficial. 2. According to the Institute for International Economics study, a move oward free trade would cause disruption in employment. Is it still worth pursuing free trade if it means that some people lose their jobs? Discussion Points: This question should prompt a strong debate among students. Some students will probably suggest that the costs in terms of lost wages and benefits associated with free trade outweigh the benefits that would be gained. Other students howev er, will probably argue that since protectionism typically benefits only a few at the expense of others, while free trade generates greater economic growth and higher wages, a free trade policy should be followed. Teaching Tip: The Web site for Institute for International Economics is available at {http://www. iie. com/}. A New Round of Talks: Doha R) In late 2001, the WTO launched a new round of talks at Doha, Qatar. The agenda includes cutting tariffs on industrial goods and services, phasing out subsidies to agricultural producers, reducing barriers to cross-border investment, and limiting the use of anti-dumping laws. FOCUS ON MANAGERIAL IMPLICATIONS A) What does all of this mean for business? Managers need to consider how trade barriers impact firm strategy, and what role they can play in promoting free trade or trade barriers. Trade Barriers and Firm Strategy B) Trade barriers are a constraint upon a firm’s ability to disperse its productive activities. First, trade barriers raise the cost of exporting products to a country. Second, voluntary export restraints (VERs) may limit a firm’s ability to serve a country from locations outside that country. Third, to conform to local content requirements, a firm may have to locate more production activities in a given market than it would otherwise. All f the above effects are likely to raise the firm’s costs above the level that could be achieved in a world without trade barriers. In addition, the threat of antidumping action could limit the ability of a firm to use aggressive pricing as a way to gain market share. Policy Implications C) In general, international firms have an incentive to lobby for free tra de, and keep protectionist pressures from causing them to have to change strategies. While there may be short-term benefits to having governmental protection in some situations, in the long run these can backfire and other governments can retaliate. Critical Thinking and Discussion Questions 1. Do you think the U. S. government should consider human rights when granting preferential trading rights to countries? What are the arguments for and against taking such a position? Answer: China is frequently cited as a violator of human rights, and can form the basis for a discussion of this question. While the answer to the first question clearly is a matter of personal opinion, in stating their opinions, students should consider the following points. Trade with the U. S. is very important to China, as China views the U. S. as an important market. The U. S. is also an important source of certain products. Thus, the U. S. has some leverage with trade when trying to influence China’s human rights policies. For this policy to have much effect, however, other nations important to China must adopt similar policies. Otherwise China will simply choose to work with other countries, and U. S. consumers and producers may be more negatively impact than the Chinese. Another concern with tying MFN status to human rights is that denying MFN may make the human rights situation worse rather than better. By engaging in trade, the income levels in China will increase, and with greater wealth the people will be able to demand and receive better treatment. 2. Whose interests should be the paramount concern of government trade policy – the interests of producers (businesses and their employees) or those of consumers? Answer: The long run interests of consumers should be the primary concern of governments. Unfortunately consumers, each of whom may be negatively impacted by only a few dollars, are less motivated and effective lobbyists than a few producers that have a great deal at stake. While in some instances it could be argued that domestic consumers will be better off if world-class domestic producers are nurtured and allowed to gain first mover advantages in international markets, it is doubtful that the government will be better than international capital markets at â€Å"picking winners†, and will more likely pick the firms with the greatest political clout. While employees may well lose jobs if there are more efficient foreign competitors, some would argue that this is just the nature of competition, and that the role of government should be to help these employees get jobs where they can be efficiently employed rather than to protect them from reality in inefficient firms. 3. Given the arguments relating to the new trade theory and strategic trade policy, what kind of trade policy should business be pressuring government to adopt? Answer: According to the textbook, businesses should urge governments to target technologies that may be important in the future and use subsidies to support development work aimed at commercializing those technologies. Government should provide export subsidies until the domestic firms have established first mover advantages in the world market. Government support may also be justified if it can help domestic firms overcome the first-mover advantages enjoyed by foreign competitors and emerge as viable competitors in the world market. In this case, a combination of home market protection and export-promoting subsidies may be called for. . You are an employee of an U. S. firm that produces personal computers in Thailand and then exports them to the U. S. and other countries for sale. The personal computers were originally produced in Thailand to take advantage of relatively low labor costs and a skilled workforce. Other possible locations considered at that time were Malaysia and Hong Kong. The U. S. government decides to impose punitive 100 percent ad valorem tariffs on imports of computers from Thailand to punish the country for administrative trade barriers that restrict U. S. exports to Thailand. How should your firm respond? What does this tell you about the use of targeted trade barriers? Answer: As long as the manufacturing requirements haven't changed significantly, looking at Malaysia or Hong Kong again for production would appear obvious. By the U. S. government introducing a specific ad valorem tariff on Thai computer imports, it would be easy to get around these by looking at other locations. Hence such targeted trade barriers can often be easily circumvented without having to locate production facilities in an expensive country like the U. S. 5. Reread the Management Focus feature on U. S. Magnesium Seeks Protection. Who gains most from the anti-dumping duties levied by the United States on imports of magnesium from China and Russia? Who are the losers? Are these duties in the best national interests of the United States? Answer: Most students will probably recognize that U. S. producers and their employees are the primary beneficiaries of the anti-dumping duties levied by the United States on Chinese and Russian magnesium imports. As a result of the duties, consumers in the United States will pay higher prices for magnesium-based products. Some students may suggest that by imposing the duties, the United States runs the risk of retaliatory measures from both China and Russia. Closing Case: Agricultural Subsidies Summary The closing case examines the effects of subsidies paid to U. S. cotton farmers. The United States currently pays about $5 billion to cotton farmers for a crop that is worth just $4 billion. The lower prices resulting from the subsides and the excess production they encourage, have had particularly devastating effects on cotton farmers in poor countries. Some estimates show, for example, that the subsidies and excess production in the United States has cost the African country of Benin more economically than it receives in aid from the United States. Discussion of this case can revolve around the following questions: QUESTION 1: Why do you think that the U. S. government pays subsidies to farmers? ANSWER 1: The United States initially began paying subsidies to farmers in the middle of the Great Depression. Many students will probably suggest that the subsidies are still being paid simply because they have been in place for so long. Other students however, may note the power of agricultural lobbyists and the fact that without the subsidies, U. S. farmers could not compete in world markets. This suggests that the government has some incentive to continue with its current policies. QUESTION 2: What is the impact of farm subsidies on the price of agricultural products in the United States, and on prices elsewhere? ANSWER 2: The subsidies paid to U. S. farmers currently run around $29 billion annually. They encourage farmers to produce more products than are needed, and in doing so depress global prices. Cotton subsidies for example, pushed the price of cotton to just $0. 5 in 2006, about half the 1995 price. For farmers in poor countries, the drop in prices has pushed income levels down over 20 percent. QUESTION 3: Who benefits from U. S. farm subsidies, who are the losers? ANSWER 3: Most students will recognize that the primary beneficiaries of the subsidies are farmers. As a result of the subsidies, consumers mus t pay more, and producers in other countries are faced with falling prices, and ultimately lower incomes. QUESTION 4: What would happen if the United States (and other countries) stopped paying subsidies to farmers to grow certain crops? Who would benefit, who would lose? ANSWER 4: If the United States stopped paying subsidies to farmers, consumers would initially see prices fall. Later however, as some farmers, without the support of the subsidies, went out of business, consumers would probably see prices rise to some degree as supply and demand moved together. Producers in other countries like Benin would benefit from increased demand and higher prices. Video Note: The iGlobe Agricultural Problems Lead to Farmer Suicides in India explores the effects of cotton subsidies on farmers in India. The iGlobe is a good complement to the Closing Case. Continuous Case Concept As automakers establish production operations in multiple countries around the world, and rely on suppliers from numerous countries, the question of tariffs and quotas becomes more important. In this chapter’s Continuous Case Concept, explore what happens if a country places a tariff or other trade barrier on imported cars. †¢ Ask students to consider, for example, how consumers would react if the U. S. charged a tariff on every car that is imported from Japan. What would be the likely reaction of Japanese automakers? What would American producers do? †¢ Next, ask students to consider whether such as tariff is â€Å"fair. Who really pays the tariff? Who benefits from the tariff? Who would benefit from free trade in automobiles and car parts? †¢ Finally, explore how efforts by both the United States and the European Union to increase the production of ethanol and bio-diesel (see Opening Case) could impact the auto industry. Honda is currently a market leader in the hybrid vehicle market, but is hampered by the lack of infrastructure to fully support the industry. In 2008, Toyota established a goal to sell 500,000 hybrid vehicles. This exercise works well after the notion of trade barriers has been introduced. It can also be used in a summary discussion of the chapter’s material or in conjunction with the Opening Case. globalEDGE Exercises Use the globalEDGE Resource Desk {http://globalEDGE. msu. edu/ResourceDesk/} to complete the following exercises. Exercise 1 Your company is considering exporting its pharmaceutical products to Japan, but management’s current knowledge of the country’s trade policies and barriers for this sector is limited. Conduct the appropriate level of research in a trade barriers database to identify any information on Japan’s current standards and technical requirements for pharmaceutical products. Prepare an executive summary of your findings. Answer: The quickest way to reach this information would be to search globalEDGE using the phrase â€Å"trade barriers database† at http://globaledge. msu. edu/ResourceDesk/. Once at the Market Access Database website, select â€Å"Trade Barriers Database. † On the search option â€Å"Select Country,† choose â€Å"Japan,† and on the search option â€Å"Select Sector,† choose â€Å"Pharmaceuticals. † A series of reports are listed from which those with more general titles will provide adequate insight for the exercise. Search Phrase: â€Å"Trade Barriers Database† Resource Name: Market Access Database Website: http://mkaccdb. eu. int/ globalEDGE Category: â€Å"Research: Multi-Country† Exercise 2 You work for a national chain of clothing stores that is considering importing textiles from India into the U. S. You want to determine whether the goods are subject to import quotas. Using information provided by the U. S. Customs and Border Protections, prepare a report highlighting the elements that determine whether a shipment is subject to this type of trade restriction. Answer: The U. S. Customs and Border Protections website hosted by the U. S. government offers considerable information on the details of importing or exporting into or out of the U. S. The information for the exercise can be reached by searching for the phrase â€Å"U. S. Customs and Border Protections† at http://globaledge. msu. edu/ResourceDesk/. This resource can also be found under the globalEDGE category â€Å"Research: Government Resources. † Once on the website, click on â€Å"Trade† and select â€Å"Textiles and Quotas† under â€Å"Trade Program Areas. The report, â€Å"Are my Goods Subject to Quotas? ,† is readily available. Search Phrase: â€Å"U. S. Customs and Border Protections† Resource Name: United States: U. S. Customs and Border Protections Website: http://www. cbp. gov/ globalEDGE Category: â€Å"Research: Government Resources† Additional Readings and Sources of Information Economists Rethink Free Trade http://www. businessweek. com/magazine/content/08_06/b4070032762393. htm? chan=search Brazil Urges EU to Scrap Biofuel Tariffs http://www. businessweek. com/globalbiz/content/jul2007/gb2007076_483689. htm? chan=search