International Trade Agreements: Click To Edit Master Subtitle Style
International Trade Agreements: Click To Edit Master Subtitle Style
4/7/12
ECONOMIC INTEGRATION
THE POLITICAL AND ECONOMIC AGREEMENTS OF COUNTRIES THAT GIVE PREFERENCE TO MEMBER COUNTRIES TO THE AGREEMENT.
4/7/12
THREE WAYS
Global
Integration - through the World Trade Organization Integration two countries decide to cooperate closer together, usually in the form of tariff reductions Regional Integration group of
Bilateral
4/7/12
major multilateral forum through governments can come to agreements and can settle disputes regarding trade. GATT (General Agreements on Tariffs and Trade) predecessor of the WTO.
The
4/7/12
in 1947
Composed
of 23 Countries under the United Nations. the time it was replaced by the WTO in 1995 there were 125 member nations
By
4/7/12
MOST-FAVORED-NATION (MFN)CLAUSE
Member nation must open its market Any sort of discrimination was
DISCRIMINATION
was 4/7/12
AREAS:
Trading services not covered by GATT rules Trading services grew more important
AREAS:
shelter under the MFN became free riders to the benefits of the GATT. compliance with agreements
4/7/12
which made trade agreements more tedious, thus, accomplished less of what it envisioned.
The WTO
Adopted
some of the principles on free trade under the GATT but expanded its mission to include the ff:
trade in services, investment, intellectual property, sanitary measures plant health
4/7/12
The WTO
Has
nearly 150 members that collectively account for more than 97% of world trade. Conference highest level decision-making body in the WTO
General
and working parties deal with individual agreements areas include: environment,
4/7/12Other
EXCEPTIONS:
Developing countries manufactured products have been given preferential treatment over those from industrial countries. Concessions granted to members within a regional trading alliance have not been extended to countries outside the alliance.
4/7/12
Settlement of Disputes
Countries
may bring charges of unfair trade practices to WTO Panel, accused country may appeal. limit on stages of deliberations rulings are binding.
Time WTO
Penalties include:
4/7/12
Doha Round
Commenced
Disputes
resulted in the split between developed members (US, Japan and the EU) and developing nations (Brazil and India) over the large agricultural subsidies maintained by the richer nations
4/7/12
BILATERAL AGREEMENTS
Preferential
Trade Agreements (PTAs) or Free Trade Agreements (FTAs) agreements are relatively easy for countries to meet their trade objectives because it is easier to resolve issues in a smaller setting as compared to WTO.
Bilateral
4/7/12
Trade Agreements (RTAs) a.k.a. spaghetti bowl integration confined to a region and involving more than two countries.
REASONS WHY NEIGHBORING COUNTRIES ALLY WITH RTAs Distance short for trading Homogeneity in consumer tastes, history, 4/7/12 and interests
PURPOSES:
Abolish all tariffs between member countries Each member country maintains its own external tariff against non-FTA countries.
Customs
Union
PURPOSES:
4/7/12
Eliminate internal tariffs Member countries levy common external tariff on goods being imported from non-members
EFFECTS OF INTEGRATION
Social,
cultural, political and economic effects EFFECTS the shifting of resources from inefficient to efficient companies as trade barriers fall
STATIC
EFFECTS the overall growth in the market and the impact 4/7/12
DYNAMIC
CREATION production shifts to more efficient producers for reasons of comparative advantage. DIVERSION trade shifts to countries in the group at the expense of trade with countries not in the group.
TRADE
4/7/12
from the European Economic Community to European Community to European Union most and successful regional trade group trade of goods, services, capital, people Common external tariff,
The
Free 4/7/12
Bodies:
European Commission
The political leadership and direction Manages the annual budget of the EU,
THREE FUNCTIONS:
Initiator of proposals for legislation Guardian of Treaties Manager and executor of Union Policies and international trade policies
4/7/12
Council
state/government of each member country. representing the different ministers in each country conjunction with the parliament.
Parliament
4/7/12
Court of Justice
application of EU treaties
individuals, firms and organizations fined by the Commission fro infringing treaty law.
EURO:
Bank
Established on January 1, 1999 Resulted in new bank notes in 2002 Does not include the UK, Denmark,
4/7/12
of the EU Corporate
Strategy:
Companies need to:
determine where to produce products. Determine what their entry strategy will be. Balance the commonness of the EU with National difference.
Main
Involves
free trade in goods, services, and investment A large trading bloc but includes
4/7/12
is a free trade agreement instead of a customs union or a common market, its cooperation goes beyond tariff reductions. Covered:
Market access Trade Rules Services
Areas
4/7/12Investment
IMPACT of NAFTA: trade and investment among the member countries has increased significantly. for CORPORATE STRATEGY:
NAFTA is viewed as one big regional
market allowing a company to rationalize production, products, financing and the like.
4/7/12
(LAIA) 4/7/12
4/7/12
4/7/12
multi-lateral economic cooperation in trade and investment in the Pacific Rim. the Pacific Rim
Composed on 21 countries that border Free and open trade in the region by
4/7/12
2010 for the industrial nations and by 2020 for the rest of the members.
AGREEMENTS
supply of a good; it takes the form of a producers alliance or an international commodity control agreement.
TWO TYPES
1. PRODUCERS ALLIANCE
between producing and exporting countries, such OPEC 4/7/12
Exclusive membership agreements
consuming countries to control prices through buffer stocks or quotas without engaging in price stabilization mechanisms.
4/7/12
BUFFER STOCK SYSTEM: there is purchasing of a supply of commodities from the market and hold the same as security. SYSTEM: producing countries divide total output and sales to stabilize the price.
Most effective if a single country has a large
QUOTA
4/7/12
a producer cartel that relies on quotas to influence price. is a group of commodity-producing countries that have significant control over supply and that band together to control output and price.
COUNTRIES: Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the UAE 4/7/12 and Venezuela.
MEMBER
from non-OPEC countries a have increased because revenues accruing to the competitors are higher. to roadblocks to production, BP, ExxonMobil, and Shell invested in areas like:
Caspian Basin Gulf of Mexico
Due
4/7/12