Please think about these questions in advance. There is no written assignment, but I present these as examples of typical "exam" questions that draw upon readings, class discussion, and group presentations.

Please keep in mind the following:

1. Global perspective: Every country in the world struggles with trade policy issues. In other words, is it better to allow free trade even if that means harm to domestic producers, or should we protect domestic producers (and jobs) with tariffs and quotas?

2. Educational objective: By the end of this course, I would like every student to be able to make a logical, well-supported argument in favor of free trade AND I would like every student to be able to make a logical, well-supported argument that addresses the limitations of free trade.

Discussion questions:

1. In the presentations Monday, we saw several examples of trade policy questions in which tariffs might protect a specific interest group (e.g., domestic manufacturers or domestic workers in that industry). Consider the two statements below. Which best describes the argument for free trade?

[a] A country should avoid imposing tariffs because the benefits to tariffs are less than the harm to others around the world. One must think globally.

[b] A country should avoid imposing tariffs because the benefits to tariffs are outweighed by the harm to others WITHIN the country. Tariffs are not in a country's self interest.

2. What are the arguments for the protection of home industries via, tariffs, quotas, subsidies, regulations, etc? To what extent is each of these arguments consistent with "pure free trade"? With Porter's position in "the competitive advantage of nations"?

3. Is trade policy between/among nations a prisoners' dilemma?

4. Milton Friedman, a Nobel Laureate in economics, argued that "the social responsibility of business is to make a profit." If one accepts this premise, what is wrong with "predatory pricing" or dumping"?

5. True or false. If an industry in a particular country is protected by tariffs, there is no need for the companies in that industry to innovate. Explain your answer, and explain how your explanation can be applied to whether free trade or trade restrictions (e.g., tariffs, quotas) is good for a nation.

6. Do you think that a country should allow domestic production in any or all of the following industries to "go away" because other countries are more efficient in production? Sugar, automobiles, shrimp, catfish, lumber, airplanes, steel, wool products, apples, dairy products.

7. If there are two counties and each makes its home markets completely free according to Porter (e.g., allows imports, prevents monopolies, etc.), will the two counties by equally successful? Innovative? Competitive? Why or why not?

8. You are presenting what you have learned about trade to a group of Washington apple farmers. Many of their members have gone bankrupt due to inexpensive apple juice concentrate from China and inexpensive apples from New Zealand. They are arguing for protection via U.S. trade policy. What do you say to them?