International Trade Ready for life and work: In order to be able to write relevant, accurate and significant reports, the students will need to access real life situations and make conclusions based on appropriate theoretical frameworks

International Trade

Ready for life and work:

• In order to be able to write relevant, accurate and significant reports, the students will need to access real life situations and make conclusions based on appropriate theoretical frameworks.
• To train the researching method, the student will need to find the relevant information and discriminate high value sources from low quality sources.
• All this will allow students go gain the skills of producing high quality work requested by the management of firms to make informed and correct decisions on trade questions.

Learning outcomes covered in this assignment:

• Examine international trade data to critically discuss economic theorems and apply in diverse contexts.
• Evaluate arguments for and against intervention in the trade process to justify arguments in favour and against globalization.
• Compare and contrast economic and political condition in poor and rich countries to critically assess the incentives and consequences of trade liberalization globally.
• Assess the impact of protectionist policies on the welfare in rich and poor countries to decrypt the political economy of trade reform.

Maximum wordcount: 1200 words

1. Theory question: tariff in a small country

[24 points, wordcount recommendation: appox. 500-600 words]

1. Collect and present yearly data for imports of vehicles to Vietnam and exports of iron

and steel of Vietnam for the year 2018-2020. Present the average for the time frame

of imports and exports. Present the three main countries which export vehicles to

Vietnam and also the three main countries which import iron and steel from Vietnam.

(4 points)

2. Assume that Vietnam has imposed no tariff on imports for vehicles. Present a graph

showing this free trade situation, using Vietnam’s production possibility curve for

vehicles and for iron&steel. Attempt at depicting the situation as closely to the real

data as possible. Briefly explain your graph. Presenting a graph showing the market

for domestic supply and demand for one good will not be awarded any marks. (5

points)

3. Assume now that Vietnam imposes a tariff of 65% on imported vehicles. Present the

dynamics of this change in your graph. Discuss the dynamics briefly. (6 points)

4.  What are the welfare implications of the tariff for Vietnam? Discuss by using your graph as a basis. (5 points)
5. Assume now that the Vietnamese Dong appreciates towards the world currencies.

Present the graph of c) showing these changes. Assume that world demand for

iron&steel is perfectly inelastic. What would you expect to happen as a consequence

of the appreciation? Discuss. (4 points)

2. Inequality and poverty reduction through international trade

[18 points, wordcount recommendation: approx. 400-500 words]

1. Collect data for a year of your choosing after 2010 and present the key indicators

for the trade relations between South Africa and Vietnam for that year. Briefly

present the key points of the trade agreement between those two countries. (5

points)

2.   Choose two suitable products within the top 5 export and import products between

the two countries. Chose a trade model covered in class, briefly present the

model. Use the chosen model to discuss if this model can explain the trade

between the two countries of the two goods you chose. (6 points)  

3.   Present an approximation of the terms of trade between the two countries for the

two chosen goods for the years 2010-2019. Collect and present the Gini

coefficient for both countries for the years 2010-2019. Present poverty data of the

two countries for the years 2010-2019. Briefly explain your findings. (4 points)

4.   Do your findings in part b) and c) confirm or contradict the Stolper-Samuelson

theorem? Explain. Using external sources and your own deduction to discuss if

there is evidence that international trade contributed to poverty reduction in one or

both countries. (3 points)

Rubric Assignment 3