Definition Edit

Neo-mercantilism is a policy regime that encourages exports, discourages imports, controls capital movement, and centralizes currency decisions in the hands of a central government. The objective of neo-mercantilist policies is to increase the level of foreign reserves held by the government, allowing more effective monetary policy and fiscal policy.

Countries such as China and South Korea employ a powerful combination of state subsidies, national standards, preferential government procurement for national firms, and requirements for technology transfer to drive the growth of nationally- based innovation. . . . In the United States, trade and investment policy is predicated on the faith that open markets foster innovation. What's more, U.S. trade policy is ill-equipped to avert the serious damage neo-mercantilism inflicts on U.S. industries until it is too late, such as when heavily subsidized competition of a given product forces American manufacturers to shut domestic production.[1]

References Edit

  1. Rising to the Challenge: U.S. Innovation Policy for Global Economy, at 5.

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