-liberalization+deregulation

-the golden straitjacket of economic policy

It refers to a competitive situation where a company, state, or nation attempts to undercut the competition's prices by sacrificing quality standards/worker safety (often defying regulation) or reducing labor costs.

-Priority:settle disputes through consultations not through judgement

-Under GATT, rulings could be accepted only by consensus

-Under WTO, rulings are automatically accepted unless it is not rejected by consensus

-Dispute Settlement Body (establishes dispute panels)

-No direct enforcing power:granting the right for the plaintiff to retaliate (engage into compensatory measures) provided that the loosing defendant doesn't bring its policy in line with the ruling.

-Critisism:lengthy process+open for delaying tactics

-The levers:the mechanism used to make trade gradually freer-consisted of elaborate horse-trading negotiations ("rounds") resulting in tariff reductions.

-The rachets, prevent backsliding, consisted of rules preventing countries from going back on their previous commitments, except under certain conditions.

-The MFN clause is based on the idea that countries should treat all their trade partners equally-that no one country should be "more favoured". It means no country should give special treatment to goods+services coming from one particular trading partner.

-The WTO has made the MFN clause part of its rules.

-Countries should also not give preferred treatment to their own products+services- which is called national treatment.

-Macroeconomic conditions (economic+political stability, inrastructure, human capital)

-Economic+political institutions (business environment, level of democracy, corruption, rule of law)

-Technologycal development+efficiency (innovation, imitation, market efficiency)

-Asymmetric dependencies (FDI exporters vs. FDI importers) +the sovereignity of economic policies

-In the long run, negative effect on the CA balance in FDI importing countries (external indebtedness)

-Oversized budget subsidies for green-/brown-field investments

-The use of obsolete technologies (with damaging effect on the human environment)

-Negative effects on domestic companies:brain-drain (the absorption of well-educated labor force), the suffocation of infant industries, unfair competition+the ousting of domestic companies

Inward/outward flow of FDI: FDI realized in/by a country in a given year

Inward/outward stock of FDI: inward/outward flows of FDI accumulated up to a given year

-Direct incentives:tax allowances, low corporate income tax rate, direct budget subsidies to green-/brown-field investments, governmental investment promotion agency

-Indirect incentives:competitive economy, attractive business environment (economic+political stability, developed economic+political institutions, well-educated labor force) 

-According to the theory, there's an efficiency loss in case of protection due to distorted incentives to underconsume+overproduce

-In small countries, import tariffs cause losses

-According to the estimates, total costs of import protection are modest these days

-International competition provides enrepreneurs with incentives to innovate +improve cost-efficiency

-Avoiding inefficient small scales of production

-Owing to the export-orientation, the industrial mix shifts toward more productive sectrors

-In large countries, the gain in terms of trade can outweigh the efficiency losses relatedto import tariffs

-The optimum tariff rate

-Limitations:

1.small countries can't influence world prices

2.can easily lead to retaliation+trade war

-Protectionist trade policy might be easily captured by interest groups (rent seekers)

-Rent seeking in relation to import protection implies real costs to the economy

-Rent seeking+ import quotas

-Rent seeking vs. welfare-oriented trade policy

1.The restriction phase (1979-89)

2.The relaxation phase (2000-2016)

3.The regulation phase (2017-)

-a tax levied when a good is imported 

-specific tariff:levied as a fixed charge for each unit of imported goods

-ad valorem tariff:levied as a fraction of the value of imported goods

-specific export subsidy:a payment/unit exported

-ad valorem export subsidy:a payment as a proportion of the value exported 

-a restriction on the quantity of a good that my be imported

-is usually enforced by issuing licences/quota rights

-A binding import quota'll push up the price of the import bc. the quantity demanded'll exceed the quantity supplied by home producers+ from imports

-no gov. revenue, the revenue from selling imports at high prices goes to quota licence holders->quota rents

-the restraints are usually requested by the importing country

-the profits/ rents from this policy are earned by foreign govs. /producers

-Foreigners sell a restricted quantity at an increased price

-it is like an import quota

-a regulation that requires a specified fraction of a final good to be produced domestically 

-each currency has its gold parity (exchange rate between national currencies also fixed)

-the central bank is ready to convert the national currency to gold at the given parity

-free flow of capital across borders

->monetary+ exchange rate stability->enhanced financial globalization