Lesson 4

Activity 1: Debate

Two groups of four students each will debate the advantages and disadvantages of completely free international trade. After the first student from each side has spoken, the second student will question the opponent’s arguments, looking for holes and inconsistencies. The third student will attempt to answer these arguments. The fourth student will present a summary of each side’s arguments. Finally, the class will vote on which team has offered the more compelling argument.

Activity 2: Case Study – First in Asia and the World

In your team read the case study at the end of Chapter 5. Discuss the issues in the case and then answer the questions. You may need to look up more information about DHL on the internet. Be sure to challenge members of the team about the issues and answers.

1. As the first to set up an international air express business in 1969, DHL had the first-mover advantage over other companies. Is being a first mover as advantageous for a service company such as DHL as it is for a manufacturing company such as Boeing? Explain.
2. What elements are necessary for a service company to achieve global success? Instead of relying on local agents, DHL prides itself on having its own staff of around 290,000 people across the globe. What are the merits and drawbacks of this international staffing approach?
3. What do you think are the dangers, if any, of being a first mover?

Activity 3: Dealing with Risk

In this activity your team will develop a security plan for a company that is just entering the international marketplace. The company manufactures mechanical parts for high speed rail and has plants in the US currently. It plans to locate plants in Asia to better serve that region. Your plan should address:

1. Physical security of personnel, equipment, and structures
2. Security of information
3. Risk for compromising of employees

Be specific about what measures you recommend that the company put in place both at the new sites and for employees traveling between the US and Asia.

Activity 4: Teaming Up

With your team, imagine that the United States slapped an anti-dumping duty of 30 percent on aircraft parts imported from China that it believed were being dumped in the U.S. market. Imagine that China then slapped a 35 percent countervailing duty on U.S. auto imports, saying that a recent federal bailout is tantamount to an unfair subsidy for U.S. automakers. You will need to do some research on anti-dumping and countervailing duty to discuss the questions.

1. What political, economic, or cultural motives do you think are behind the U.S. anti-dumping duty against China’s aircraft parts?

What motives do you think are behind China’s countervailing duty against U.S. autos?

1. Should countries experiencing economic difficulties be allowed to erect temporary tariff and non-tariff barriers? Explain.

Activity 5: Case Study – Down With Dumping

In teams, read through the case study discussing issues it presents and how it relates to international economics and trade. Use the questions below to discuss the case.

1. People love finding a bargain on their favorite items while shopping. But few people would likely want those items made in the home market (which would create jobs) if it meant paying a higher price for them. do you agree with this sentiment? Explain.
2. Do you think that people from different cultures would respond differently to the above question? If so, explain.
3. The WTO cannot punish individual companies, but can only direct its actions toward governments of countries. Why do you think the WTO was not given authority to charge individual companies with dumping?

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