Lecture 6 Nontariff Barriers Econ 340Lecture 6: NTBs 2News: Jan 27 – Feb 2 • Reid opposes Fast Track -- WSJ: 1/30 | Proquest | NYT: 1/31 | Proquest | FT: 1/30 | CTools – Senator Harry Reid, Majority Leader, said that he would oppose passing Trade Promotion Authority (TPA), also known as Fast Track. This is a blow to President Obama's agenda for negotiating trade agreements with Asia and Europe, which are supported by many Republicans. – Fast Track sets a time table for considering international trade agreements, and requires they be voted up or down without amendment. The latter is considered crucial for getting other countries to sign on to agreements, since without it any agreement is subject to change by the US Congress. Obama had called for Fast Track in his State of the Union message the day before. – Reid, like many other Democrats, has long worried that trade agreements will hurt US labor, as well as human rights and the environment. He worries now that it will hurt the Democrats' chances of keeping its majority in the Senate in the 2014 elections. However, until now he has avoided publicly disagreeing with Obama on this. • Google sells Motorola to China's Lenovo -- WSJ: 1/30 | Proquest | NYT: 1/30 | Proquest | FT: 1/30 | CTools – Google, having bought the mobile phone business of Motorola two years ago for $12.5 billion, has agreed to sell it to China's Lenovo for $2.91 billion. Lenovo is the computer company that earlier bought IBM's PC business and, last week, bought IBM's server business. – Google's main motivation in buying Motorola was to obtain its patents, and doing so risked antagonizing other hardware makers that use Google's Android software. In the sale to Lenovo, Google will keep the majority of the patents. – Lenovo is attracted by getting improved access to the US market, but the deal will still have to be approved by CFIUS, the Committee on Foreign Investment in the U.S., which watches for national-security concerns and has blocked other international investments. • Republicans re-open consideration of US immigration reform -- WSJ: 1/31 | Proquest | NYT: 1/28 | Proquest | FT: 2/1 | CTools – Seven months after the Senate passed an immigration bill, Republican leaders of the House of Representatives went public with a set of principles for immigration reform. It includes a path to legal status for many adult illegal immigrants and a path to citizenship for those brought to the US illegally as children. – Many other Republicans oppose this, wanting either to abandon it or postpone it until after the next elections. The latter fear that this issue will divide Republicans at a time when they might otherwise by unified in opposition to Obama. – A major motivation for the pro-reform contingent is to attract Latino and other immigrant voters to the Republican Party. Another is to slow the outflow of high-skilled workers who train in the US but then are not allowed to stay and contribute to the US economy. Lecture 6: NTBs 3News: Jan 27 – Feb 2 • Reid opposes Fast Track – Senator Harry Reid, Majority Leader, said that he would oppose passing Trade Promotion Authority (TPA), also known as Fast Track. This is a blow to President Obama's agenda for negotiating trade agreements with Asia and Europe, which are supported by many Republicans. – Fast Track sets a time table for considering international trade agreements, and requires they be voted up or down without amendment. The latter is considered crucial for getting other countries to sign on to agreements, since without it any agreement is subject to change by the US Congress. Obama had called for Fast Track in his State of the Union message the day before. – Reid, like many other Democrats, has long worried that trade agreements will hurt US labor, as well as human rights and the environment. He worries now that it will hurt the Democrats' chances of keeping its majority in the Senate in the 2014 elections. However, until now he has avoided publicly disagreeing with Obama on this. Lecture 6: NTBs 4Lecture 6: NTBs 5Lecture 6: NTBs 6News: Jan 27 – Feb 2 • Google sells Motorola to China's Lenovo – Google, having bought the mobile phone business of Motorola two years ago for $12.5 billion, has agreed to sell it to China's Lenovo for $2.91 billion. Lenovo is the computer company that earlier bought IBM's PC business and, last week, bought IBM's server business. – Google's main motivation in buying Motorola was to obtain its patents, and doing so risked antagonizing other hardware makers that use Google's Android software. In the sale to Lenovo, Google will keep the majority of the patents. – Lenovo is attracted by getting improved access to the US market, but the deal will still have to be approved by CFIUS, the Committee on Foreign Investment in the U.S., which watches for national-security concerns and has blocked other international investments. Lecture 6: NTBs 7Lecture 6: NTBs 8News: Jan 27 – Feb 2 • Republicans re-open consideration of US immigration reform – Seven months after the Senate passed an immigration bill, Republican leaders of the House of Representatives went public with a set of principles for immigration reform. It includes a path to legal status for many adult illegal immigrants and a path to citizenship for those brought to the US illegally as children. – Many other Republicans oppose this, wanting either to abandon it or postpone it until after the next elections. The latter fear that this issue will divide Republicans at a time when they might otherwise by unified in opposition to Obama. – A major motivation for the pro-reform contingent is to attract Latino and other immigrant voters to the Republican Party. Another is to slow the outflow of high-skilled workers who train in the US but then are not allowed to stay and contribute to the US economy. Lecture 6: NTBs 9Lecture 6: NTBs 10 Outline: Nontariff Barriers • What Are NTBs? • Quotas – Effects Equivalent to Tariffs – Who Gets the Rents • Other NTBs – Tariff-Rate Quotas – Voluntary Export Restraints (VERs) – Variable Levies – Government Procurement Regulations – Customs Procedures – Standards – Unfair Trade Laws – Export taxes • SubsidiesLecture 6: NTBs 11 What Are NTBs? • What Are They? – Any institutional
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