For this assignment, you will read and respond to a case study about US shrimper

Question

For this assignment, you will read and respond to a case study about US shrimpers who believe that shrimp imports should be restricted. You will read an article about the shrimpers’ position on trade restrictions and then craft a response to their efforts to reduce imports to the US. Instructions

1. Click the link below to read the case study of shrimp imports. •My Shrimp Tastes Better than Your Shrimp!

2. •Write five arguments, one for each type you’ve read about, that explain why the shrimpers demand further reduction of shrimp imports, or even a ban on shrimp imports. The five arguments are as follows: The jobs argument The national-security argument The infant-industry argument The unfair-competition argument The protection-as-a-bargaining-chip argument

Explanation / Answer

The shrimpers demand further reduction of shrimp imports because of the following reasons:

1. Job Argument - Increase in the imports by 70 per cent leads to decline in the prices of domestic shrimps by 41 per cent. Since the supply curve is upward sloping, any decline in the domestic prices will lead to decline in the amount of the quantity sold. This decline will lead to reduction in the demand of the factors of production. Thus, labor employed will decline and this will increase unemployment rate in the economy.

2. National security Argument - Increase in the imports from other countries also lead to issues related to national security of the country. This could lead to increased interference from importing countries.

3. Infant industry argument - It has been observed that foreign countries are selling at low prices in the domestic market but the new entrants cannot utilize economies of scale initially because the cost of production is high and also units produced are low initially. Thus, infant industries have to keep their prices high initially till they are able to utilize economies of scale. Thus, they need some protection to remain in the industry.

4. Unfair Competition Argument - The competition is unfair between domestic players and foreign importers because foreign goods are being dumped in U.S. at below cost. This raises the price difference between domestic goods and foreign goods and gives advantage to foreign players. Thus, tariffs should be imposed on them to reduce this price difference.

5. Protection as a bargaining chip argument - A threat can be used to by imposing tariffs on other products untill the dumping from such countries comes to an end.

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