117

CHAPTER 8
Formulation of National Trade Policies
After studying this chapter, students should be able to:

> Present the major arguments in favor of and against government intervention in
international trade.
> Identify the advantages and disadvantages of adopting an industrial policy.
> Analyze the role of domestic politics in formulating a nation’s international trade
policies.
> Describe the major tools countries use to restrict trade.
> Specify the techniques nations use to promote international trade.
> Explain how countries protect themselves against unfair trade practices.

LECTURE OUTLINE

OPENING CASE: Desmarais Is Tired of Being Dumped On

The opening case illustrates the concept of dumping by exploring the actions of a
Canadian company, Desmarais & Frere, that lost market share to its Asian counterparts
that were dumping products in the Canadian marketplace.

Key Points

• Desmarais & Frere Ltd. is Canada’s largest producer of photo albums with self-
adhesive pages. The company keeps its marketing costs low by marketing most of
its output through 10 customers, including K-Mart and Zellers.

• Desmarais had a strong market position, with some 50-90 percent of the
Canadian market in the 1970s and 1980s. However, for 20 years the company has
been plagued by import competition from low-priced photo albums produced in
Asia.

• Desmarais considered focusing on quality as a means of countering the

competitive threat, but decided that this was not the answer since price is a major
concern of its customers, and because packaging makes it difficult to determine
product quality anyway.

• Desmarais believed that it was victimized by a practice known as dumping,

whereby a foreign firm sells products outside its domestic market for prices below
what it charges in its home market.
118 > Chapter 8

• Because Canadian law prohibits dumping, in 1975 Desmarais petitioned the

Canadian Import Tribunal (CIT) for relief from the low prices charged by Japanese
and Korean producers. After finding the foreign firms guilty of dumping, the CIT
imposed an antidumping duty on the violating firms. However, the CIT’s penalties
applied only to Japanese and Korean producers, and thus did not solve Desmarais’
problem because production of photo albums shifted to other Asian locations.

• Seeking relief from a falling market share, Desmarais filed a second complaint
with the CIT in 1985 against Hong, Kong, South Korea, and the United States, a
third complaint in 1986 against China, a fourth complaint in 1987 against
Singapore, Malaysia, and Taiwan, and a fifth complaint in 1991 against Indonesia,
Thailand, and the Philippines.

• In each case, it was determined that dumping had indeed occurred, and
penalties were imposed accordingly. The case was reviewed again in 1996, and
once again, it was found that Desmarais was vulnerable to dumping by its foreign
competitors. However, the trial for Desmarais is not over yet. Production of photo
albums will probably shift to another country that is not currently covered by the
antidumping tax.

Case Questions

1. What is dumping?

Dumping occurs when a foreign firm sells products outside its domestic market for
prices below what it charges in its home market.

2. Why can dumping plague a firm (or industry) over a number of years?

Dumping can plague a company (or industry) over time because even after a
complaint is successfully filed, violators can simply move their operations to a
country that is not covered by an antidumping tax. Until a “victim” has successfully
launched complaints against all countries, the practice will probably continue.

Additional Case Application

The issue of dumping is not limited to the photo album industry. To see just how
widespread the practice is, students can be asked to identify and find examples of
other dumping cases. This information can then be used as a basis for further
discussion of the types of industries in which dumping is likely to occur, and the
methods its “victims” can use to fight back.

CHAPTER SUMMARY

Chapter Eight explores the issue of national trade policy. The chapter begins with a
discussion of why governments intervene in the free flow of trade and then considers
the various types of trade barriers and how they are used.
 Formulation of National Trade Policies > 119

I. RATIONALES FOR TRADE INTERVENTION

• There are two basic issues to consider when developing a national trade policy.
First, should a national government intervene to protect its domestic firms by taxing
foreign goods entering the domestic market or constructing other barriers against
imports? Second, should a government help domestic firms increase their foreign
sales through export subsidies, government-to-government negotiations, and
guaranteed loan programs?
• In the U.S., the debate has centered on the question of whether the government
should promote free trade or fair trade. Free trade implies minimal government
influence on the exporting and importing decisions of private firms and individuals.
Fair trade (also called managed trade) suggests active intervention by the national
government to ensure that exports receive an equitable share of foreign markets
and that imports into the country are controlled to minimize losses of jobs and
market share in specific industries.
• The “level playing field” argument (whereby foreign firms and domestic
businesses compete on equal terms) is often used to justify policies that restrict
competition from foreign firms.
• Firms are interested in the debate because national trade policy decisions
directly affect the size and profitability of foreign markets and investments, and the
degree to which firms are threatened by foreign imports in their dominant markets.

Industry-Level Trade Arguments

Teaching Note:
It is useful to review the ideas of Adam Smith regarding
free trade (see Chapter 3) before proceeding with the
discussion of why governments intervene in the free flow of goods between nations.

• The national defense argument for intervening in the market suggests that a
nation must be self-sufficient in critical raw materials, machinery, and technology, or
else be vulnerable to threats from other countries. The text provides the example of
the restrictions Japan puts on imported rice, forcing the country to become self-
sufficient.
• The national defense argument is a popular one, and one that has been used to
protect a variety of industries ranging from electronics to steel.
• The infant industry argument is based on the idea that some industries could
thrive if they are protected from foreign competition during their infancy and
adolescence. As the text mentions, Japan has been very successful at nurturing
new industries through various national policies.
• Developing policies based on this argument can help a country develop
economically; however, industries are often selected for protection on a political
basis, and those that are awarded protection are usually reluctant to give it up.
• Maintenance of Existing Jobs. Some countries, particularly high-wage ones,
may be pressured to protect industries to avoid a potential job loss if companies are
driven out of business by foreign competitors.
• Strategic trade theory is based on the idea that a government can make its
country better off if it adopts trade policies to ensure that a domestic firm captures
the monopoly profits that arise from being one of the few firms in an industry. The
text provides an example of the theory using Framatome and Mitsubishi. Use
Figures 8.1 and 8.2 here.
120 > Chapter 8

• Strategic trade theory applies only to markets that are incapable of supporting
more than one or two firms on a worldwide basis. Since favoring certain industries
inevitably hurts other industries, the policy is ineffective for a broad range of
industries.

Discuss Venturing Abroad: Jumbo Battle over Jumbo

Jets
This Box discusses strategic trade theory using the aircraft
industry and the ongoing competition between Boeing and
Airbus. It focuses specifically on Airbus' A-3XX which will compete primarily with
Boeing's long dominant 747.

National Trade Policies

In addition to focusing on the needs of particular industries, governments may also

implement broad policies designed to consider the needs of the economy and society
as a whole. These broad national policies are then followed by specific industry
policies.

• Economic Development Programs. In many countries, the focus of broad

national policies is economic development. Some countries that depend on a
single export commodity will attempt to diversify their economies to minimize risk.
• Some countries will follow an export-promotion strategy (see Chapter 2) as a
means of achieving higher levels of economic development. An export-promotion
strategy encourages a country's businesses to compete in foreign markets by
capitalizing on a particular advantage the country possesses.
• An import-substitution strategy encourages the growth of domestic
manufacturing industries through the erection of high barriers to imported goods.
This policy was used by Australia, Argentina, India, and Brazil after World War II.
• The export-promotion strategy has been more successful at stimulating
economic development than the import-substitution strategy (see Chapter 2).
• Industrial policy is used by a government to promote the competitiveness of
key products and industries with high growth prospects in international markets.
The policies are formulated based on the needs of the national economy. The text
provides an example of how Japan’s Ministry of International Trade and Industry
(MITI) has played a role in managing the economy.
• Critics of industrial policy argue that such programs may not improve the global
competitiveness of a country since bureaucrats cannot perfectly identify the right
industries to favor. Critics further suggest that political clout, rather than potential
international competitiveness, may play a role in determining which industries are
selected.
• Governments struggle to identify what the role of government should be in a
market economy. The text notes, for example, that while the Reagan and Bush
administrations believed that government’s role in the economy should be limited,
and thus did not formally adopt an industrial policy, the Clinton administration
believed that the government should play a much larger role, and consequently
selected five key areas to receive increased federal support.
• Public choice analysis suggests that special interest will often dominate the
general interest on any given issue because special interest groups are willing to
work harder for the passage of laws favorable to their interests than the general
public is willing to work for the defeat of laws unfavorable to their interests. The text
 Formulation of National Trade Policies > 121

provides an example of this phenomenon using the 1920 Jones Act. Map 8.1
should be presented here.
• Because of political ramifications, Congress frequently endorses special
interests. Companies should recognize this situation, and work within it. The text
provides an example of how Tennessee and Kentucky support Japanese
investment since both states have been the recipients of Japanese auto plants.
Show Figure 8.3 here.

II. BARRIERS TO INTERNATIONAL TRADE

Barriers to trade can either be in the form of tariffs or in the form of nontariff barriers.

Tariffs

• A tariff is a tax placed on a good involved in international trade. Most tariffs are
collected on imported goods (import tariffs), but some are collected on goods as
they leave a country (export tariffs) or pass through a country (transit tariffs).
• Ad valorem tariffs are assessed as a percentage of the market value of the
goods, while specific tariffs are assessed as a specific dollar amount per unit of
weight or other standard measure. Compound tariffs include both an ad valorem
and a specific component. Developed nations typically assess ad valorem tariffs.
Discuss Table 8.1 here.
• The harmonized tariff schedule (HTS) is a detailed classification scheme for
imported goods. Companies use the HTS to try to determine what tariffs will be
assessed on their goods. The text provides an example of how the HTS is used.
Show Figure 8.4 here.
• There are two main reasons why tariffs have historically been assessed. First,
they are a source of revenue for governments, particularly in developing countries.
Second, they act as a barrier to trade, and consequently increase the demand for
domestic products. Discuss Figure 8.5 here.

Discuss Bringing the World into Focus:

A Loophole Big Enough to Drive Through
This Going Global Box describes the curious situation that
exists in the auto industry in Poland. Tariffs on imported cars
in Poland are subject to tariffs of $1900 or 33 percent of the car’s value, whichever
is higher. To avoid paying the duty, Poles have taken to disassembling cars, and
bringing them across the border in a piece-meal fashion. Polish customs officials,
while aware of the process, are powerless to do anything about it. This Box fits in
well with the discussion of tariffs, as well as with Review Question 4.

• Tariffs affect both domestic and foreign special-interest groups. The text
provides an example of how a $2000 specific tariff on minivans affects various
interested parties. Discuss Figure 8.6 here.
122 > Chapter 8

Nontariff Barriers

Nontariff barriers (NTBs) include quotas, numerical export controls, and other
nontariff barriers that impede international trade.
• Quotas are numerical limits on the quantity of a good that may be imported into
a country during some period of time. Quotas are frequently used to protect
industries that are politically powerful. A tariff-rate quota imposes a low tariff rate
on a limited amount of imports of a specific good, but then subjects all imports of
the good above that threshold to a prohibitively high tariff. Use Figure 8.7 here.
• Although domestic producers benefit from quotas, the domestic consumer does
not. The text demonstrates that, as a result of quotas, the price of sugar in the U.S.
is roughly double the world price.
• Some countries prohibit any importation of a specific product as a means of
developing local industry.
• Numerical Export Controls. Countries may also use a numeric system to limit
the amount of goods they export. Embargoes are an absolute ban on the export
(or import) of goods to a particular location. They may be used by a country as a
disciplinary measure. Exporting countries may adopt voluntary export restraints
(VERs) in an effort to maintain a friendly relationship with trading partners. A VER
is a promise by a country to limit its exports of a good to another country to a pre-
specified amount or percentage of the affected market.
• Other Nontariff Barriers. The use of tariffs and quotas has been minimized as
a result of international negotiations, and nontariff barriers (NTBs) have become a
common means of protecting industries.
• Some of the more common NTBs include product and testing standards
(requirements that foreign goods meet domestic product standards or testing
standards before they can be sold); access to distribution systems; public sector
procurement policies (policies that give preferential treatment to domestic firms);
local purchase requirements (requirements to purchase goods or services from
local suppliers); regulatory controls; currency controls; and investment controls.
The text provides examples of each type of NTB. Discuss Figure 8.8 here.

III. PROMOTION OF INTERNATIONAL TRADE

Various techniques such as subsidies, the establishment of foreign trade zones, and
export-financing programs are used by governments to promote international business.

Subsidies

• Subsidies reduce the cost of doing business, thus artificially affecting the
competitiveness of receiving firms. In an effort to increase economic activity and
create jobs, governments may employ subsidies such as tax breaks and/or direct
payments to producers. Governments may also provide economic development
incentives to attract investment within their communities. The text provides an
example of how subsidies have affected trading patterns in wheat.
 Formulation of National Trade Policies > 123

Foreign Trade Zones

• Foreign trade zones (FTZ) are geographic areas in which imported or exported
goods receive preferential tariff treatment.
• FTZs are used by governments to encourage regional economic development.
The use of FTZs has grown in recent years. For example, in the U.S., the number
has grown from about 25 in the early 1970s to several hundred today. The text
provides as example of how FTZs have become an important component in the
automobile industry. Show Map 8.2 here.
• Maquiladoras, factories located in the free trade zone in Mexico along the U.S.
border that import finished goods or component parts and re-export them to the
U.S., are the second largest source of foreign exchange earnings in Mexico.
• Maquiladoras have been the target of environmentalists, who claim that the
factories allow U.S. firms to escape environmental laws in their own country. U.S.
union officials, fearing a loss of jobs, have also criticized the maquiladora industry.
The future of the industry is uncertain since NAFTA eliminates the special tariff
advantages of Mexican firms located along the U.S. border.

Export Financing Programs

• Most major trading nations are, through the creation of government owned
agencies, in a position to assist domestic firms with the financing of export sales.
The Export-Import Bank of the United States (Eximbank) offers assistance to
U.S. exporters in the form of direct loans and loan guarantees. The Eximbank may
also arrange for commercial insurance services. Political risk insurance is provided
to U.S. exporters by the Overseas Private Investment Corporation (OPIC). OPIC
was already discussed in Chapter 3.

IV. CONTROLLING UNFAIR TRADE PRACTICES

When governments feel that domestic exporters have received unfair treatment in other
countries they may take retaliatory measures. In the U.S., the International Trade
Commission (ITC) may impose duties to counteract unfair trade practices.

Countervailing Duties

• Countervailing duties (CVD) are ad valorem taxes imposed by the government

of the importing nation to counter the impact of foreign subsidies. The goal of the
CVD is to create a situation in which trade is a result of competitive and
comparative advantage rather than a result of government-provided subsidies.

Antidumping Regulations

• Dumping occurs when (1) a company sells its goods for a lower price in a
foreign market than the price it charges in its home market, in which case it is a
form of international price discrimination, or (2) it sells its goods below cost in the
foreign market, in which case it is a form of predatory pricing.
• Antidumping laws are designed to protect local industries from goods that
have been “dumped” by foreign producers into the local market. However,
determining whether or not dumping has actually occurred can be tricky. The text
demonstrates the difficulty in identifying dumping situations in the auto industry.
124 > Chapter 8

Super 301

• Super 301, a section of the 1974 U.S. Trade Act, requires the U.S. trade
representative to publicly list those countries engaging in the most flagrant unfair
trade practices and to negotiate for the elimination of the practices. If negotiations
are unsuccessful, the executive branch is required to take retaliatory measures.

Teaching Note:
Instructors may wish to discuss the measures taken by the
Clinton Administration in early 1995 to protest unfair trade
practices by the Chinese.

• Super 301 has been the target of much criticism, particularly from the EU, which
argues that the law hinders the development of global trade and promotes
unilateral, rather than multilateral, attempts to redress problems facing international
trade.

Should Countries Enforce their Unfair Trade Practice Laws?

• Unfair trade practice laws are intended to (1) promote global efficiency by
encouraging production in countries that can produce a god most efficiently; (2)
ensure that trade occurs on the basis of comparative advantage (not because of
government subsidies; and (3) protect consumers from predatory behavior.
• Though the intentions of these laws are laudable, they are often enforced in
ways that violate their intent.
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The Great Quota Hustle

The closing case discusses the quota system governing the import of clothing into the
U.S. After a brief discussion of how the system began, the case describes how the
quota system is often manipulated by exporters. The case explains who usually wins
and who loses due to the convoluted structure of the U.S.'s clothing quota rules.

Key Points

• Despite the U.S.'s commitment to free trade principles, trade is anything but free
in the apparel industry.

• The quota system limits the amount of clothing imports from particular countries.

• Clothing manufacturers relocate their factories (and workers) from country to

country in order to be producing in countries from which U.S. clothing imports are
still allowed.
 Formulation of National Trade Policies > 125

• The system fosters falsification of origin documents in order to create the

impression that garments were manufactured in certain countries (from which they
would be allowed into the U.S.).

• Companies holding quotas (that is, permission to export a specific amount of

clothing to the U.S.) make money because they are quota holders, not necessarily
because they are efficient manufacturers.

• The quota system required continuous monitoring by the U.S. government, which
sends teams all over the world to verify that clothing is actually being manufactured
where clothing tags and certificates of origin claim.

Case Questions

1. What was the original purpose of placing quotas on clothing and textile imports?
Are those goals now being met?

They were originally intended to protect domestic manufacturers. However, given labor
rates in the U.S., few U.S. companies are able to domestically produce competitively
priced garments.

2. What is the impact on the U.S. economy of these quotas?

They drive up the cost of imported garments, imposing a "tax" on consumers. The
additional cost of clothes reduces disposable income for buying other goods.

3. Who gains and who loses from the use of these quotas?

The biggest loser is the U.S. consumer. Foreign clothing manufacturers also lose
because they need to produce in countries from which clothing is allowed into the U.S.
-- they can't simply produce in the most efficient location. The winners are those
companies that own quota rights. They are allowed to ship specific amounts of
garments to the U.S. Since quotas limit the supply of clothes, quota holders are able to
charge premium prices for their goods.

4. The quota system is scheduled to be eliminated this decade. Will its elimination
benefit or harm the U.S. economy? Defend your answer.

It should benefit the U.S. economy. The costs associated with the loss of protection for
the few remaining domestic apparel manufacturers will be more than offset by savings
to consumers from more efficiently produced imported clothes.
126 > Chapter 8

VI

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1. What is free trade? Who benefits from it?

Free trade implies minimal government influence on the exporting and importing decisions
of private firms and individuals. Firms that are active in exporting benefit from free trade as
do the firm’s employees, the communities where factories are located, and consumers.

2. What is the infant industry argument?

The infant industry argument suggests that the infant manufacturing sector in a newly
independent country be given protection from foreign competition until it has reached a
level of maturity that will allow it to effectively compete in the marketplace. The text
provides an example of how Japan used the argument to protect certain industries during
the period after World War II.

3. What are the different types of tariffs?

A tariff is a tax placed on a good involved in international trade. An export tariff is levied on
goods as they leave a country, while a transit tariff is levied on goods as they pass through
a country bound for another country. An import tariff is levied on imported goods either on
an ad valorem basis (assessed as a percentage of the market value of the imported good)
or as a specific tariff (assessed as a specific dollar amount per unit of weight or some other
standard measure). Compound tariffs include both ad valorem and specific tariffs.

4. Why is it useful for an importer to seek out an advance tariff classification from the U.S.
Customs Service?

It is important for an importer to seek out advance tariff classification because if a customs
officer subjects imported goods to a higher tariff rate than expected, it can wipe out (or
shrink) the expected profit margin on a product.

5. Why might a nation adopt a VER?

A nation might adopt a voluntary export restraint agreement in an effort to maintain friendly
relations with trading partners. Under such an agreement, a nation would “voluntarily” limit
its exports to another nation to a pre-specified amount or percentage of the affected
market, and avoid a confrontation over trade.

6. What are the major forms of NTBs?

The major forms of nontariff barriers include quotas, numerical export controls, and other
nontariff barriers. Quotas are numerical limits on the quantity of a good that may be
imported into a country during a specific period of time. Numerical export controls limit the
amount of a good that is exported. Examples include embargoes which absolutely ban a
particular export, and voluntary export restraints. Other nontariff barriers include product
and testing standards; restrictions on access to distribution systems; public sector
procurement policies that give preferential treatment to domestic firms; local purchase
requirements; and regulatory, currency, and investment controls.
 Formulation of National Trade Policies > 127

7. What is a FTZ?

A foreign trade zone is a geographic area in which imported or exported goods receive
preferential tariff treatment. Firms using foreign trade zones can reduce and even
eliminate customs duties. Typically, foreign trade zones are used to stimulate economic
development.

8. What is the role of Eximbank?

The Export-Import Bank of the United States (also known as the Eximbank) provides
financing for U.S. exports through direct loans and loan guarantees. The Eximbank also
provides, either directly or through subcontractors, routine commercial insurance services
for Eximbank-supported exports.

9. What is the purpose of a CVD?

A countervailing duty is an ad valorem tariff imposed by the government of an importing

nation to counter the impact of foreign subsidies. Because countervailing duties are
assessed so that they just offset the advantage that an exporter obtains from a subsidy,
trade continues to be driven by the competitive strengths of companies and by the laws of
comparative advantage.

10. What are the two definitions of dumping?

Dumping occurs when a firm sells its goods in a foreign market at a price below what it
charges in its home market. This type of dumping is a form of international price
discrimination. The second form of dumping is when a firm sells its goods below cost in a
foreign market. In such instances dumping is a form of predatory pricing.

Questions for Discussion

1. What are the advantages and disadvantages of an industrial policy?

When a government adopts an industrial policy, it formulates policies based upon the
needs of the national economy that will promote the competitiveness of key products and
industries with high growth prospects in international markets. If the policy works as it is
designed, companies should successfully capture large shares of important, growing
markets. However, the main difficulty with industrial policy is correctly identifying which
industries should receive favorable treatment. It has been suggested that companies that
are selected for preferential treatment may be selected on the basis of their political clout
rather than on their foreign market potential. Firms and employees in industries that are
being threatened by low-priced imports may find themselves without any kind of protection
if the government determines that their companies are not the companies of the future.
128 > Chapter 8

2. Because of Japan’s success in competing in international markets, it has been the target of
numerous complaints that it restricts foreign access to its local markets. As Japan reduces
its barriers to imported goods, who is likely to gain from lowered barriers? Who is likely to
lose from them?

There are at least two constituents that are likely to gain from Japan’s lower barriers to
imported goods. First, Japanese consumers will probably benefit from the lower prices and
increased choice that occurs when competition becomes stronger. In fact, in 1989, trade
barriers cost Japanese consumers between $75 billion and $110 billion. 1 Second, foreign
firms that have been denied access to the Japanese consumers will benefit from its more
open market place. However, Japanese firms that have been protected to a large extent
from foreign competition in their domestic market place, such as food and beverages,
metals, machinery, chemicals, textiles, and apparel, will probably find that lowered barriers
will have a negative effect on their profits. 2 In addition, some Japanese workers may find
themselves unemployed as their companies respond to increased competition with layoffs.

3. Strategic trade theory applies to industries that are composed of only a few firms
worldwide. List as many industries as possible that fit this description.

Students will probably identify a number of different industries that fit this bill. Among those
on the list will probably be the airline industry, consisting of Boeing, McDonnell Douglas,
and Airbus, and the accounting industry, consisting of the Big Six accounting firms.

4. Since 1992 Indonesia has imposed high export taxes on the export of raw wood and on
sawn timber. Why would they do this? (Hint: what is the impact of export tariffs on the
domestic market for wood and timber? Which domestic industries would benefit from this
impact?) Who is hurt by high export taxes?

Export tariffs have the effect of reducing the amount of a product that is exported.
Countries often impose such tariffs to limit exporting of products that are in short supply.
Indonesia’s imposition of export tariffs on raw wood and sawn timber will have the effect of
increasing the supply of those products within the domestic marketplace. Certainly,
construction and building companies would stand to gain from these tariffs, as would those
industries using wood as a raw material, such as furniture makers. While the tariffs may
benefit these industries, one might argue that the timber industry could demand a higher
price for its products if it were permitted to export them with incurring duties.

5. Should we worry if foreigners sell us goods cheaply?

Probably not. If the foreign exporter is engaging in predatory pricing with the hope of
eventually driving domestic competitors out of business, worry might be justified. However,
if the foreigner has a comparative advantage in the good being exported, cheap imported
goods benefit the exporting nation and the importing nation as well. Consumers are paying
less for goods that are being produced more efficiently (in and absolute or relative sense)
elsewhere.
 Formulation of National Trade Policies > 129

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Essence of the exercise
This exercise requires students to report on trade barriers that various countries impose on
certain products. Students are required to complete the assignment by accessing information
both via the Internet and through published sources.
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Essence of the exercise
This exercise is designed to introduce the student to various sources of information available
to companies that wish to expand internationally. Students are asked to take on the role of an
exporter and learn about the exporting process.

Answers to the follow-up questions.

1. Find out which branch office of the US&FCS serves your local market. You can do this by
using A Basic Guide to Exporting from your library, looking in your local phone book,
calling your congressperson’s office (the staff there are experts about the federal
bureaucracy), asking a local banker, or chatting with local chambers of commerce. Ask the
local US&FCS office to send you literature on its activities and a list of its “Country Desk
Officers” (experts knowledgeable about the markets in specific countries) and “Industry
Desk Officers” (experts knowledgeable about the international markets for individual
products).

The answer to this question is clearly city-specific. Instructors may want to follow the
suggested search path, or simply call their Chamber of Commerce to identify the local
branch of the US&FCS. The local office of the US&FCS should be able to send instructors
information about its activities. The information will probably include several telephone
numbers that exporters can call for information. The telephone number of the U.S. Trade
Information Center is 1-800-USA-TRADE.

2. Find out which state agencies in your state are responsible for promotion of exports by
local businesses. Ask them about their export development programs.

Again, the response to this question will be city-specific, and will probably be affected by
the size of the city in question. In larger cities, students will probably find that extensive
export development programs are available, while smaller cities may have rather limited
resources. Typically, cities will run various seminars on exporting, provide lists of written
material on trade, and have information on trade shows.
130 > Chapter 8

3. Identify the SBA district office in your area. Ask how it can help local firms identify
promising export markets.

Information about the Small Business Administration can usually be obtained from the local
Department of Commerce.

4. Locate any private organizations in your area (profit and nonprofit) that provide trade
development services. Ask them about the types of services they offer to their members
and to newcomers like yourself.

The answer to this question will again be dependent on the location and size of the city in
question. Larger cities will tend to have more resources available than smaller ones.
Students may wish to contact the local Department of Economic Community Development,
which may provide market research information, information on country markets and
regulations, and consulting services on an individual basis.
1
“Japan’s Price Of Protection,” Fortune, March 6, 1995
2
“Japan’s Price Of Protection,” Fortune, March 6, 1995