In the first session we explore the topics and issues of international trade. We will review highlights from history, describe notable current trade laws, and introduce the WTO.

Chapter 1 - Introductory Trade Issues: History, Institutions, and Legal Framework

Lecture PPT

What Next for the US-China Trade War?
(Aug 2019) This video has the latest news about the escalation in US tariffs against China.

US-China Trade War: The Guns of August
(Aug 2019) This article highlights the increase in US tariffs against China.

The following podcasts discuss the rationale behind trade agreements.

What Are Trade Deals For? Part 1

What Are Trade Deals For? Part 2

What Are Trade Deals For? Part 3

Trade Talks Episode 42: Trump and Tariff Tweets: It's More Complicated Than That
This is a podcast that discusses the difficulty of comparing average tariff rates between countries to decide who is more protectionist.

Trade Policy Review: US (2017)
This is a review of US trade policies conducted by the WTO.

Trade Policy Review: China (2016)
This is a review of China's trade policies conducted by the WTO.

US Tariff Profile
This is a WTO summary of tariffs in the US.

Brazil Tariff Profile
This is a WTO summary of tariffs in Brazil.

China Tariff Profile
This is a WTO summary of tariffs in China.

India Tariff Profile
This is a WTO summary of tariffs in India.

Kenya Tariff Profile
This is a WTO summary of tariffs in Kenya.

This session presents the simplest model of trade between two individuals. The chapter emphasizes the importance of the assumptions in generating the model results. Students learn how trade creates surplus value and how it is distributed.

Chapter 2 - A Pure Exchange Model of Trade

Chapter 3 - The Pure Exchange Model and Market Ethics

Bernie Madoff, Steve Jobs, and Wall Street Greed - The American Magazine
About Wall Street greed.

Self-interest, without morals, leads to capitalisms self-destruction - FT.com.pdf
Why self-interest requires moral behavior.

This session presents the first formal model of production and trade, introducing the principle of comparative advantage.

Chapter 4 - Production, Trade and Comparative Advantage

Read sections 1 to 7

This session introduces the Ricardian model of international trade between countries and illustrates the effects of trade on national welfare and real wages. Students learn some of the surprising outcomes, such as, that less productive nations may nonetheless benefit from free trade with its more productive neighbors.

Chapter 5 - The Ricardian Model of Comparative Advantage (Redux)

Read sections 1 to 10

The pure exchange model introduces the notion that trade can redistribute income. The immobile factor model introduces a realistic issue (factor immobility) into the Ricadian model and provides a reason for the redistribution of income. The factor proportions (or H-O) model is the second major trade model presented formally. This session presents the key assumptions of the model then builds the key relationships between endowments and outputs in the Rybczynski theorem and the relationship between output prices and factor prices in the Stolper-Samuelson theorem. Both of these relationships are extended to the more general versions of the theorems, the magnification effects.

Chapter 6 - A Pure Exchange Model Again with Three Traders
Read sections 1 to 6

Chapter 7 - Factor Mobility and Trade
Read sections 1 - 10

Chapter 8 - The Heckscher-Ohlin (Factor-Proportions) Model
Read sections 1 - 7

This class develops the H-O theorem predicting the pattern of trade between countries and the redistributive effects on income due to trade. It also introduces the factor-price equalization theorem and discusses the issue of factor mobility across countries.

Chapter 8 - The Heckscher-Ohlin (Factor-Proportions) Model
Read sections 8-12

This class considers the specific factor model and several economies of scale models including monopolistic competition.

Chapter 8 - The Heckscher-Ohlin (Factor-Proportions) Model
Read sections 13 - 17

Chapter 9 - Economies of Scale and International Trade
Read sections 1 - 7

Chapter 13 - Political Economy and International Trade
Read 13-1, 13-2, and 13-7

The rise of China and the future of US manufacturing
(Jan 2018) This article discusses the effects of the China Shock on US manufacturing jobs.

Reconsidering the ‘China shock’ in trade
(Jan 2018) This article offers a more complete analysis of the job effects in the US due to the China Shock.

This session first shows a representation of a free trade equilibrium in a partial equilibrium model. This model is then used to demonstrate the price effects of a tariff in large and small country cases. After explaining the concepts of consumer and producer surplus, the welfare effects of a tariff are presented. Finally a tariff setting game between governments is used to identify the motivation for trade wars.

Chapter 10 - Trade Policy Effects with Perfectly Competitive Markets
Read sections 1 - 10

What Are Trade Deals For? Part 4

Trade policy analysis is continued with a look at import quotas, VERs, export taxes and export subsidies. The similarities between the policies is noted. Although the small country welfare effects of each policy are not yet included in the notes, students should be able to apply the principles learned to evaluate those situations. The effects of retaliation to an export subsidy with a countervailing duty is also presented.

Chapter 10 - Trade Policy Effects with Perfectly Competitive Markets
Read sections 11 to 24

Chapter 14 - Political Economy and International Trade
Read sections 1 -7

Trade Talks Episode 49: Are Trump's Steel Quotas Worse than His Steel Tariffs?

Concerns about domestic policy effects on international trade flows have become increasingly widespread. This session will emphasize three key ideas. The first is that domestic government policies, such as production subsidies or consumption taxes, can actually be a cause of international trade. The second is to show the welfare effects of domestic policies when a country is open to international trade. The third is to show that combinations of domestic policies can duplicate the effects of trade policies.

Chapter 11 - Domestic Policy Effects on International Trade
Read sections 1 - 8

Trade Talks Episode 48: Trump Buys the Farmers

Domestic Support Policies
A briefing paper by the Economic Research Service at the US Dept. of Agriculture

This is perhaps the most important session in a trade course. It will first identify a series of market imperfections and distortions and point out how these are likely to be prevalent in the real world. Next it shows that in the presence of a market imperfection, carefully selected trade policies can often be used to raise the national welfare of a country. Third it is shown that carefully selected domestic policies are often superior to trade policies as a way of promoting the national welfare of a country.

Chapter 12 - Trade Policies with Market Imperfections and Distortions
Read sections 1 - 5

Trade and the Environment in the WTO
This press brief provides an overview of the work by the WTO Committee on Trade and the Environment

More Examples of the Theory of the Second-Best.

Chapter 12 - Trade Policies with Market Imperfections and Distortions
Read sections 5 - 10

Trade and the Environment in the WTO
This press brief provides an overview of the work by the WTO Committee on Trade and the Environment

In this session we'll review the course findings by focusing on what trade theory teaches us about the controversy over free trade.

Chapter 14 - Evaluating the Controversy Between Free trade and Protectionism
Read sections 1 - 6

The Truth about Trade
(June 2016) This article discusses the mistakes politicians often make understanding trade issues.

The Real Problem with Free Trade
A Project Syndicate opinion article by Jayati Ghosh highlighting some of the current perceptions about free trade.

TENTATIVE FINAL EXAM - 5:20 - 7:20pm