BUSA 4000 challenge 5

Protectionism

National economic policies that restrict free trade. Usually intended to raise revenue or protect domestic industries from foreign competition.

Customs

The checkpoint at national ports of entry where officials inspect imported goods and levy tariffs.

Tariff

A tax on imports (e.g., Citrus, textiles).

Nontariff trade barrier

Government policy, regulation, or procedure that impedes trade.

Quota

Quantitative restriction on imports of a specific product (e.g., Imports of Japanese cars).

Investment barriers

Rules or laws that hinder foreign direct investment (e.g., Mexico's restrictions in its oil industry).

Harmonized code

Standardized worldwide system that determines tariff amount.

Subsidies

are government grants (monetary or other resources) to firm(s), intended to ensure their survival or success by facilitating production at reduced prices, or encouraging exports.

Economic freedom

is the absence of government coercion so that people can work, produce, consume, and invest however they want to.

The Index of Economic Freedom

assesses the rule of law, trade barriers, regulations, and other criteria.

Free trade area

Simplest, most common arrangement. Member countries agree to gradually eliminate formal trade barriers within the bloc, while each member maintains an independent international trade policy with countries outside the bloc. One example is N A F T A.

Customs union

Similar to a free trade area except the members harmonize their trade policies toward nonmember countries, by enacting common tariff and nontariff barriers on imports from nonmember countries. M E R C O S U R is an example.