TYPES OF

GOVERNMENT AND
THEIR IMPACT ON
TRADE POLICIES

Presented By:
Shreya Bhattacharji (105)
Shreya Mishra(127)
Shivi Shrivastava(143)
DEFINITIONS
 Government:
A government is the body through which a political
unit exercises its authority, controls and
administers public policy, and directs and controls the
actions of its members or subjects.
Role:
 Bind Sovereignty
 Security
 Economic Development
 Maintain Law & Order
 Policies Formulation
 Trade Policy:
It is a governmental policy controlling foreign trade.
GOVERNMENT INTERVENTION IN
TRADE
Economic Uneconomic
Rationales Rationales

Maintaining
Preventing
essential
Unemployment
industries

Dealing with
Protecting Infant
unfriendly
Industries
countries

Maintaining or
Promoting extending
Industrialisation spheres of
influence

Improving
Preserving
competetive
national identity
position
CONSTITUTIONAL MONARCHY
JAPAN
 It is a form of government where in a monarch
acts as head of the state within the parameters
of a written constitution
 Japan --Nippon and Nihon
 WW1 – Manchuria – WW2
 May 1947, Constitutional Monarchy
 Prime Minister--Head of government-- Naoto Kan
 Emperor - -Head of State -- Emperor Akihito
  Legislative--Bicameral Diet --House of
Representatives and House of Councillors
 TRADE POLICIES
 Japanese trade is often called ‘processing trade’
 Programs to support Exports & Imports:
a. Special deduction of export income
b. Develop world class industries
c. Import tariff refund
d. Japan Export-Import Bank
 Ban on import of: rice, milk, sugar and sugarcane, and
wheat Despite huge imports of food
 Tariff duties
 Consumption Tax
 Internal Tax
TRADE ADVANTAGES
  Is a member of the G8, APEC, "ASEAN Plus
Three“ & WTO
 Powerful and Impartial Civil Service – METI
 Easy access to credit and loans with low-
repayment probability
 Exchange Rate- Appreciating Yen
 Trade Liberalization - Lowering tariffs rates
SOCIALIST GOVERNMENT
FRANCE
 Socialism is an economic and political
theory advocating public or common
ownership and cooperative management of
the means of production and allocation of
resources
 Government owns the major firms but the
prices is market mechanism driven
FRANCE CONTD..
 France is a semi presidential republic with its
main ideals expressed in the Declaration of
the Rights of man and of the citizen
 Although privatisation is there but Industries
such as aeronautics, defence, automobiles,
and telecommunications are still with
government
TRADE POLICIES

 France is one of the EU’s major importer and

exporter with everything from raw
commodities to automobiles
 In 1992, the Treaty of Maastricht was signed.
 Member states of the European Union have
established a Community Integrated Tariff
(TARIC) system, where duties are applied to
imports from non-EU countries
TRADE POLICIES CONTD..
 Duties levied on imports from non-EU
countries, are moderate.
 Most raw materials enter duty-free or at low
rates, most manufactured goods are subject
to rates between 5 and 17 percent
 France, share common trade and tariff
policies with the rest of the EU countries,
has discussed the erection of trade barriers
against non-EU companies and products
COMMUNIST GOVERNMENT
CHINA
 A communist government is a centrally
planned system built on state ownership of
all factors of production and control of all
economic activities.

 There is no right to property

TRADE POLICIES
 Throughout the reform period, the government
reduced tariffs and other trade barriers, with
the overall tariff rate falling from 56% to 15%.
 By 2001, less than 40% of imports were subject
to tariffs and only 9 % of import were subject to
licensing and import quotas.
 Trade has increased from under 10% of GDP to
64% of GDP over the same period
 The trade policy, allows producers to avoid
paying the Value Added Tax (VAT) since 2002,
has resulted in an overdeveloped export sector
of China.
TRADE POLICIES CONTD..
 Apart from import prohibitions China has
continued to use non-tariff border measures
(such as import and export licensing) as
instruments of its trade and industrial
policies.
 China has continued to reform its Customs
transit system to simplify Customs
declaration procedures.
 Government do impose tariffs as a
mechanism to control imports from other
countries.
CAPITALIST GOVERNMENT
UNITED STATES OF AMERICA

 An economic system in which investment in 
and ownership of means of production ,
distribution, and exchange of wealth is made
and maintained chiefly by private
individuals or corporations, especially as
contrasted to cooperatively or state-owned
means of wealth.
UNITED STATES OF AMERICA CONTD..

 Witnessed Dramatic Change

 Lead a world of imports
 One of the top 3 exporters
 Trade regulated by: Office of the United
States Trade Representative.
 The U.S. has agreements in force with 17
countries
TRADE POLICIES
 Congress can enact laws
 Example:
 Establish tariff rates
 Implement trade agreements
 Provide remedies against unfairly traded imports
 Congress has delegated some powers to the
Executive Branch
 US is a member of several international trade
organizations
 Purpose is to come to an agreement on trade
issues with other countries.
TOP US IMPORT SALES
10. Video equipment ; 2.3

9. Telecommunications
equipment ; 2.4

8. Computers ; 2.6

1. Crude oil ; 12.1

7. Cotton apparel and

household goods; 2.8

6. Automotive parts and

accessories ; 3

5. Computer accessories ; 3.4 2. Medicinal, dental and

pharmaceutical preparations ; 5.3

4. Other household goods ; 3.9

3. Passenger cars ; 5.2
TOP US EXPORTS
10. Plastic materials ; 2.4

9. Electric apparatus ; 2.5 1. Civilian aircraft including parts; 7.1

8. Medicinal equipment ; 2.5

7. Passenger cars ; 2.6

2. Medicinal, dental and pharmaceutical preparations ; 4.4

6. Telecommunications equipment ; 2.7

3. Semiconductors ; 3.5
5. Automotive parts and accessories ; 2.8

4. Other industrial machines ; 2.9

   The United States
   Current Bilateral/Multilateral FTA's
   Proposed Bilateral/Multilateral FTA'
DEMOCRACY
INDIA
 Democracy means a form of government in
which the supreme power is vested in the
people and exercised directly by their
elected agents under a free electoral system.
EARLIER TRADE POLICIES
 Belief in import substitution
 Complex system of licensing and control over
imports through non-fiscal and fiscal barriers.
 Trade Policy Reforms one of the major planks
of the new economic policies initiated from
July 1991 onwards.
 Changes include reduction of trade barriers,
simplifying procedures
TRADE POLICIES
 Free repatriation of profits and capital
investment is permitted
 Export profits are exempt from income tax
 Higher royalty payments of 8% (net of taxes)
are permitted on export sales as compared to
5% on domestic sales.
 Export commissions upto 10% are also
permissible.
 TRADE POLICIES CONTD..

 Inputs required to be imported for export

production are exempted from customs duty
under the Advance License Scheme.
 EPCG scheme: allows import of capital goods
at concessional rates of duty, subject to an
export obligation
 Export Oriented Units (EOUs) and Export
Processing Zones (EPZs) enjoy special
incentives
Thank You!
REFERENCES:
 http://en.wikipedia.org/wiki/Economy_of_the_United_States
 http://www.economywatch.com/international-
trade/usa.html
 http://www.suite101.com/content/top-us-imports--exports-
2009-a204269
 http://www.bls.gov/news.release/ximpim.nr0.htm
 http://www.nationsencyclopedia.com/economies/Europe/Fr
ance-INTERNATIONAL-TRADE.html
 http://www.buyusa.gov/france/en/116.htmlhttp://www.sta
te.gov/r/pa/ei/bgn/4142.htm
 http://www.economywatch.com/foreign-direct-
investment/countries/japan.html
 siteresources.worldbank.org/INTRANETTRADE/.../JapanTrad
ePolicy_eng.doc : Article By Junichi Goto Kobe University