Monday, December 17, 2012

Hurricane Sandy: trade barrier unintentionally

Disater happens unintentionally. When it make loss, it also creat trade barrier unawares. As we all know tariff protect national bussiness from the foreign competitors. To some degrees, disaters and other uninterntionally events act the same role.

When Hurricane Sandy came,  lots of foreign bussiness were influenced by transporting goods or dilivering late. When the Fuel Prices have been going up and up, the transportation costs increased. When Somalian Pirates appeared, goods on shiping decreased.

This kind of event shrinks the export but less import even when countries have more comparative advantage. Obviously, this kind of event reduce the countries' comparative advantage.For instance, Somalian Pirates reduce the transportation costs of foreign goods.

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