Response to assumptions in comparative advantage. Policy Issue: Should the US government {text:list-item} {text:list-item} *‘Strategic Trade Policy’ involves government intervention. Wherever they think they can succeed {text:list-item} If the industry were good, private investors would invest in it {text:list-item} Few local investors Wherever they think they can succeed {text:list-item} {text:list-item} {text:list-item} {text:list-item} Arguments for Strategic Trade Policy {text:list-item} {text:list-item} {text:list-item} {text:list-item} {text:list-item} {text:list-item} {text:list-item} {text:list-item} {text:list-item} {text:list-item} {text:list-item} {text:list-item} {text:list-item} {text:list-item} {text:list-item} {text:list-item} Laissez-faire -- market forces Targeting industries Policies on intellectual property rights {text:list-item} {text:list-item} Picking winners/ and planning death of losers Regional integration Promote industrialization Maintain spheres of influence U.S.-Japanese Auto Trade {text:list-item} {text:list-i ...