The Global Trade Environment

1
The Global Trade Environment

• Chapter 3

2

• Which of the following countries ranks number 1
  in terms of two-way trade with the United States

Note

• A. Japan
• B. Mexico
• C. Canada
• D. Germany
• E. China

The U.S. buys about -____ of ____________
exports, ___________ buys about ______ of U.S.
exports.
3
GATT the World Trade Org.

• General Agreement on Tariffs and Trade 1982
  principle promote trade among members
  (____________________ clause).
  
• GATT itself had ________________ power.
• __________________________________ (___________)
  the successor to GATT
  
• WTO provides a forum for ______________
  negotiations among its 147 members.

4
The World Trade Organization (WTO) is the _______
international organization dealing with the
global rules of trade between nations. Its main
function is to ensure that trade flows as
smoothly, predictably and freely as possible.
Location ___________________________
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At the heart of the WTO system, known as the
_____________________, are the WTOs agreements,
negotiated and signed by a large majority of the
worlds trading nations, and ratified in their
parliaments. Essentially, WTO agreements are ___
___________, guaranteeing member countries
important trade rights.
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GATT WTO

• One problem politicians in many countries are
  resisting the WTOs plans to move swiftly in
  removing __________________________.
  
• i.e., issues pertaining to ________
  _________________________ remain unresolved.

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Economic Integration Cooperation
Stage of Integration
Elimination of Internal Barriers to Trade
Establish Common External Barriers
Elimination of Restriction on Factor Movement
Harmonization Unification of Economic Socia
l Policies
Institutions
Free Trade Area
L
Customs union
Common market
Economic union
H
8
________________ (Association of the Southeast
Asian Nations)
Before a Free Trade Zone you must have an
______________________________ Group.
9
ASEAN (Association of the Southeast Asian
Nations) an economic cooperation group that
consists exclusively of ___________ countries.
To date, actual economic integration among the
ASEAN countries has been limited. However, the
member nations hope to create a ________
_____________ early in the 21st century.
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Which country is the newest member of ASEAN?
Which ASEAN county ranks number one in terms of
two-way trade with the U.S.?
ASEAN aims and purposes cooperation in the
economic, social, cultural, technical,
educational and other fields, and in the
promotion of regional peace and stability
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Singapore
Michael Fay??

• Was once a ____________ colony.
• Has the _____ largest container port
  (__________________ ranks first).
  
• ___________ is nearly nonexistent.
• Singaporeans believe the U.S. has given
  individuals too many _________, while imprisoning
  American society.

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Total land area Population
Singapore _____ sq mi. ____________
Rhode Island _____ sq. mi. _________
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North American Free Trade Agreement NAFTA (Free
Trade Area)

• i.e., economic cooperation between________,
  ____________, _______________ NAFTA reduces
  tariffs other trade barriers between the
  countries.

14
FTAA Free Trade Area of the ____________________

• A proposed trade initiative between the _______,
  ________________ ____________________. It will
  include 34 countries with a population of 800
  million.

15
_________ was the 1st step toward creating a Free
Trade Area of the Americas (FTAA). The FTAA would
be the _____________ _________________ zone on
earth would offer low or nonexistent tariffs,
streamlined customs, no quotas, subsidies, or
other barriers to trade.
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______________________________
Sometime countries or groups join with other
groups to form a Free Trade Area
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• Free Trade Area Countries that belong to free
  trade area can do maintain ________________
  trade policies with respect to third countries.

The ____________ _______________ ____________ is
an example of a _____ ______________ includes
the current members of the European Union, plus
Norway, Liechtenstein, Iceland (EFTA).
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Customs Union Elimination of ____________
barriers of trade Establish common
_____________ barriers
SADC (_______ ____________Development Community)
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SADC (South African Development Community) fully
developed ____________.
Objective to reduce Member States dependence,
particularly, but not only, on apartheid South
Africa
Which SADC member has the largest economy as
measured by GNP?
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___________ Unions
___________ American Integration System (CAIS)
__________Community
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Andean Community (Customs Union) members agreed
to lower tariffs on _______________-group trade
work together to decide what products each
country should produce.
Which member of the Andean Community has both the
largest economy the largest population?
22
Which member of the Andean Community recently
adopted the American dollar as its official
currency?

• Boliva
• Peru
• Ecuador
• Columbia

23
Central American a _________ _________ is trying
to revive its common market with the Central
American Integration System (CAIS)
The member of the CAIS that has both the largest
economy largest population is
24

• Customs Union i.e., European Union and ________
  initiated a C.U. in an effort to boost two-way
  trade.

E.U.
____________
Pre-May, 2004
May, 2004
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_________________________ the free movement of
factors of production, including labor, capital,
and information.

• Central American Integration System (CAIS)
  Sistema de la Integracion Centroamericana
  SICA and the Andean Community may ultimately
  evolve into true _________________.

CAIS
Andean C.
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MERCOSUR (_______________________________) it is
a customs union thats evolving into a common
market.
Which MERCOSUR member has the largest economy
therefore wields a disproportionately strong
influence over MERCOSURs development
Chile Bolivia are associate members.
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U.S. 9,629,091 sq. km. 3,716,829 sq. mi.
Brazil 8,511,965 sq. km. 3,285,618 sq. mi.
Literacy rate United States 97 Brazil
83
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MERCOSUR

• _____________ is the largest consumer market in
  Latin America and has a population that is
  expected to reach _______ million early in the
  21st century.

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Economic Union a form of regional cooperation
agreement.

• When fully implemented would entail
• The creation of a ________ central bank.
• The use of a ______________ currency.
• _______________ policies on agriculture, social
  services, and welfare.
  
• The ____________ Union is approaching its target
  of completing most of the steps required to
  become a full Economic Union.

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________________________________________
The EU currently constitutes the worlds
_________________ bloc.
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The European Union (EU) is a union of twenty-five
independent states based on the European
Communities and founded to enhance political,
economic and social co-operation. Formerly known
as ___________ Community (EC) or
__________________ Economic Community (EEC).
Why the European Union Why? Because the EU is th
e world's ____________ _____________________ and
thus plays a key role in international
negotiations.
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How large can the European Union become?
The enlarged EU of 25 countries and 454 million
people (U.S. 293 million) will expand even
further in 2007, when Bulgaria, Turkey, and
Romania join - if all goes according to the plans
agreed at Copenhagen.
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Since January 1, 2002, more than 300 million
European citizens have been using the ________ as
a normal part of daily life. It took only 10
years to get from the Maastricht Treaty (February
1992), enshrining the principle of a single
European currency, to the point where _______
notes and coins were circulating in ________ EU
countries.
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Maastricht Treaty

• It called for the creation of a
  ______________________ in Europe

_________ a single European currency
35
The remaining 13 European Union countries will
adopt the euro only when they fulfill certain
economic criteria, namely, a high degree of
_________ stability, a sound fiscal situation,
stable ________________ and converged long-term
_________ ____. The current euro area members had
to fulfill the same criteria.