This subject offers a broad understanding of international trade issues and policy. The impact of protectionist instruments and the role of international agreements and organisations in moderating protectionist behaviour are examined using economic theory. The history of Australian protectionism will be used as an example to illustrate how attitudes to protectionism can evolve over time. This example will illustrate that a national mindset, as well as self-interest, influences the formation and evolution of policy. The effects of various trade and investment policies on developing countries is also explored.
|Academic unit:||Bond Business School|
|Subject title:||International Trade|
Delivery & attendance
|Attendance and learning activities:||It is very important that students attend both the weekly lecture and tutorial. While there are no formal attendance requirements, missing classes would seriously disadvantage students.|
|Prescribed resources:|| |
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Assurance of learning
Assurance of Learning means that universities take responsibility for creating, monitoring and updating curriculum, teaching and assessment so that students graduate with the knowledge, skills and attributes they need for employability and/or further study.
At Bond University, we carefully develop subject and program outcomes to ensure that student learning in each subject contributes to the whole student experience. Students are encouraged to carefully read and consider subject and program outcomes as combined elements.
Program Learning Outcomes (PLOs)
Program Learning Outcomes provide a broad and measurable set of standards that incorporate a range of knowledge and skills that will be achieved on completion of the program. If you are undertaking this subject as part of a degree program, you should refer to the relevant degree program outcomes and graduate attributes as they relate to this subject.
Subject Learning Outcomes (SLOs)
On successful completion of this subject the learner will be able to:
- Explain the concept of comparative advantage and how it can be used to counteract mercantilism and other populist protectionist notions.
- Explain the Heckscher-Ohlin, Specific Factors, and Imperfect Competition models of international trade and the implications of each.
- Apply appropriate economic theory to analyse different trade policies and their political economy considerations.
- Explain the role of the WTO and preferential trade agreements.
- Demonstrate knowledge of how trade and investment policies affect developing countries.
|Skills Assignment||Short answer questions||10%||Week 5||1, 3.|
|Skills Assignment||Short answer questions||10%||Week 10||1, 3.|
|Case Analysis||Case analysis examining the consequences of various trade policies||10%||Week 12||1, 3, 4, 5.|
|Paper-based Examination (Closed)||Comprehensive final examination consisting of short answer and essay questions||40%||Final Examination Period||1, 2, 3, 4, 5.|
|Paper-based Examination (Closed)||Mid-semester examination consisting of short answer and essay questions||30%||Week 7 (Mid-Semester Examination Period)||1, 2, 3.|
- * Assessment timing is indicative of the week that the assessment is due or begins (where conducted over multiple weeks), and is based on the standard University academic calendar
- C = Students must reach a level of competency to successfully complete this assessment.
|High Distinction||85-100||Outstanding or exemplary performance in the following areas: interpretative ability; intellectual initiative in response to questions; mastery of the skills required by the subject, general levels of knowledge and analytic ability or clear thinking.|
|Distinction||75-84||Usually awarded to students whose performance goes well beyond the minimum requirements set for tasks required in assessment, and who perform well in most of the above areas.|
|Credit||65-74||Usually awarded to students whose performance is considered to go beyond the minimum requirements for work set for assessment. Assessable work is typically characterised by a strong performance in some of the capacities listed above.|
|Pass||50-64||Usually awarded to students whose performance meets the requirements set for work provided for assessment.|
|Fail||0-49||Usually awarded to students whose performance is not considered to meet the minimum requirements set for particular tasks. The fail grade may be a result of insufficient preparation, of inattention to assignment guidelines or lack of academic ability. A frequent cause of failure is lack of attention to subject or assignment guidelines.|
For the purposes of quality assurance, Bond University conducts an evaluation process to measure and document student assessment as evidence of the extent to which program and subject learning outcomes are achieved. Some examples of student work will be retained for potential research and quality auditing purposes only. Any student work used will be treated confidentially and no student grades will be affected.
Students must check the [email protected] subject site for detailed assessment information and submission procedures.
Policy on late submission and extensions
Late submissions will normally not be accepted. Homeworks will be collected at the start of the lecture in the specified week and/or as prescribed. Please make sure your work is stapled together.
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Feedback on assessment
Feedback on assessment will be provided to students within two weeks of the assessment submission due date, as per the Assessment Policy.
Accessibility and Inclusion Support
If you have a disability, illness, injury or health condition that impacts your capacity to complete studies, exams or assessment tasks, it is important you let us know your special requirements, early in the semester. Students will need to make an application for support and submit it with recent, comprehensive documentation at an appointment with a Disability Officer. Students with a disability are encouraged to contact the Disability Office at the earliest possible time, to meet staff and learn about the services available to meet your specific needs. Please note that late notification or failure to disclose your disability can be to your disadvantage as the University cannot guarantee support under such circumstances.
The notion of gains-from-trade is introduced. Using examples, political economy reasons for the persistence of protectionism are examined. The role and effectiveness of the WTO is also considered.
The distinction between absolute and comparative advantage and a review of the standard partial equilibrium treatment of mutual gains from engaging in international trade. Comparative advantage is explained using a numeric Ricardian model. Mutual gains from engaging in international trade are illustrated using a two-countries, two-goods model.
How can similar countries gain from trade? This can occur through economies of scale or monopolistic competition. We also examine learning-by-doing and we show that dumping can often be accounted for in terms of price discrimination rather than predatory behaviour.
Two-countries, two-goods, two-factors framework are used to show the Heckscher-Ohlin model and the Stolper-Samuelson theorem. Within this framework, we can identify which factor owners will lobby for protectionism by making use of the Stolper-Samuelson theorem. Introduce specific factors to show why everyone within an import competing sector advocates for protectionism.Finally, look at political models of trade policy; place a heavy emphasis on the collective action problem
Compare alternative protectionist instruments. Introduce the concept of an ‘optimal tariff’ and identify flaws associated with this concept. The Effective Rate of Protection measures are discussed.
Considers the history of Australian protectionism and the forces that eroded the protectionist consensus.
Some of the WTO issues are considered, including agriculture, trade in services, intellectual property rights, and trade and the environment. Focus is given to the economics of customs unions and regionalism versus multilateralism.
International factor mobility in the form of foreign direct investment and migration are introduced. The circumstances under which foreign direct investment will be used as opposed to contracting out production to a foreign firm are examined.
The infant industry argument for protection emphasising the ‘second best’ nature of this argument is introduced. With the import-substitution approach to industrialisation, we examine why it is now generally regarded as a failure. Introduce the possible causes for the success of the ‘tiger economies’.
The issue of foreign direct investment and technology transfer are introduced. The issues of transfer pricing, corruption and labour practices by multinational corporations are discussed.