The Global Trade Environment Chapter 3

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.

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.

Location: ___________________________ 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: ___________________________

At the heart of the WTO system, known as the _____________________, are the WTO’s agreements, negotiated and signed by a large majority of the world’s trading nations, and ratified in their parliaments. Essentially, WTO agreements are ______________, guaranteeing member countries important trade rights.

GATT & WTO One problem: politicians in many countries are resisting the WTO’s plans to move swiftly in removing __________________________. i.e., issues pertaining to ________ & _________________________ remain unresolved.

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 & Social Policies & Institutions L Free Trade Area Customs union Common market Economic union H

________________ (Association of the Southeast Asian Nations) Before a Free Trade Zone you must have an ______________________________ Group.

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.

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

Singapore Was once a ____________ colony. 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.

Singapore: _____ sq mi. & ____________ Total land area & Population: Singapore: _____ sq mi. & ____________ Rhode Island: _____ sq. mi. & _________

North American Free Trade Agreement: NAFTA (Free Trade Area) i.e., economic cooperation between________, ____________, & _______________: NAFTA reduces tariffs & other trade barriers between the countries.

FTAA: Free Trade Area of the ____________________ A proposed trade initiative between the _______, ________________ & ____________________. It will include 34 countries with a population of 800 million.

_________ 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.

______________________________ Sometime countries or groups join with other groups to form a Free Trade Area

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).

SADC (_______ ____________Development Community) Customs Union: Elimination of ____________ barriers of trade + Establish common _____________ barriers SADC (_______ ____________Development Community)

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?

___________ American Integration System (CAIS) ___________ Unions ___________ American Integration System (CAIS) __________Community

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?

Boliva Peru Ecuador Columbia Which member of the Andean Community recently adopted the American dollar as its official currency? Boliva Peru Ecuador Columbia

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:

Customs Union: i. e. , European Union and ________ initiated a C. U 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

_________________________ : 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.

MERCOSUR (_______________________________): it is a customs union that’s evolving into a common market. Which MERCOSUR member has the largest economy & therefore wields a disproportionately strong influence over MERCOSUR’s development: Chile & Bolivia are: associate members.

U.S. 9,629,091 sq. km.; 3,716,829 sq. mi. Brazil: 8,511,965 sq. km.; 3,285,618 sq. mi. Brazil Literacy rate: United States = 97%; Brazil = 83%

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

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.

The EU currently constitutes the world’s _________________ bloc. ________________________________________ The EU currently constitutes the world’s _________________ bloc.

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 the world's ____________ _____________________ and thus plays a key role in international negotiations.

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. Bulgaria Turkey Romania

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.

Maastricht Treaty It called for the creation of a ______________________ in Europe _________: a single European currency

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.