International Trade: Rodamia

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Week Four’s International Trade Simulation is set in the country of Rodamia. As a Trade Representative of Rodamia, one will evaluate what products need to be produced in the country and what products should be imported or exported. Further, the Trade Representative will determine when to impose trade restrictions and negotiate trade agreements. The objective of this paper to discuss the advantages and limitations of international trade, highlight four key points in the simulation as they relate to assigned reading, and apply the simulation to the workplace. Advantages and Limitations of International Trade

In January 2004 of the simulation, the President has asked the Trade Representative to determine whether or not there are trade opportunities with neighboring countries, and if so, determine the composition of said trades. To fulfill the President’s request, the Trade Representative recommended giving export incentives to cheese and DVD players, as Rodamia has a comparative advantage; and the importing of corn from Uthania and Watches from Suntize. No recommendation for trade with Alfazia is made at this time.

In July of 2004, President Jacobs requests the Trade Representative determine whether or not to levy an anti-dumping tariff or to impose a quota restriction on imports from Suntize due to a recently discovered dumping margin of 25% to equal the price or watches. In response, the Trade Representative decided to levy a tariff at $40.00 per unit. This is equal to 25% of the export price, equaling the dumpling margin. The down side of this decision is that Rodamia’s domestic industry can be harmed.

In response to a “corn boom” in January of 2005, President Jacobs makes another request of his Trade Representative: access whether or not a brief tariff should be imposed on imported corn from Alfazia and Uthania. If a tariff is to be imposed, the President needs to know at what level the tariff will be imposed. In reply, the Trade Representative...
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