International treaty that committed signatories to lowering barriers to the free flow of goods across national borders and led to the WTO
Tariff
A tax levied on imports (or exports)
Specific Tariff
Tariff levied as a fixed charge for each unit of good imported
Ad Valorem Tariff
A tariff levied as a proportion of the value of an imported good
Subsidy
Government financial assistance to a domestic producer
Import Quota
A direct restriction on the quantity of a good that can be imported into a country
Tariff Rate Quota
Lower tariff rates applied to imports within the quota than those over the quota
Voluntary Export Restraint (VER)
A quota on trade imposed from the exporting country's side, instead of the importer's; usually imposed at the request of the importing country's government
Quota Rent
Extra profit producers make when supply is artificially limited by an import quota
Local Content Requirement
A requirement that some specific fraction of a good be produced domestically
Administrative Trade Policies
Administrative policies, typically adopted by government bureaucracies, that can be used to restrict imports or boost exports
Dumping
Selling goods in a foreign market for less than their cost of production or below their "fair" market value
Antidumping Policies
Designed to punish foreign firms that engage in dumping and thus protect domestic producers from unfair foreign competition
Countervailing Duties
Antidumping duties
Infant Industry Argument
New industries in developing countries must be temporarily protected from international competition to help them reach a position where they can compete in world markets with the firms of developed nations
Strategic Trade Policy
Government policy aimed at improving the competitive position of a domestic industry and/or domestic firm in the world market
Smoot-Hawley Act
Enacted in 1930 by the U.S. Congress, this act erected a wall of tariff barriers against imports into the United States