Breaking Down Barriers Lesson 17 Slide 17A

What Does That Mean? TermDefinition General Agreement on Tariffs and Trade GATT; 1947 multilateral agreement eliminating pre- World War II protectionist business and trade practices. World Trade Organization WTO; organization that supervises and promotes free international trade between member nations. free tradethe unrestricted importing and exporting of goods between nations. Free Trade Agreement FTA; when two or more nations agree on the terms of trade between them, committing to reduce or eliminate trade barriers. Slide 17B

What Does That Mean? TermDefinition bilateral agreement an index that includes all of the stocks listed on the NASDAQ. multilateral agreement an agreement between more than two parties. barriers to trade government-imposed restraint on the flow of international goods or services which includes tariffs, quotas, licenses, and local content requirements. Slide 17C

What Does That Mean? Slide 17D TermDefinition Office of the U.S. Trade Representative USTR; a division of the executive branch that develops U.S. international trade and conducts oversees trade negotiations with other countries. International Trade Administration ITA; a division of the Department of Commerce that promotes and advocates for U.S. exports, and enforces U.S. trade laws and agreements. Regional Trade Agreement RTA; a bilateral or multilateral trade agreement within a particular global region. North American Free Trade Agreement NAFTA; a trilateral RTA formed in 1992 between the U.S., Canada, and Mexico.

What Does That Mean? Slide 17E TermDefinition Association of Southeast Asian Nations ASEAN; a multilateral RTA among ten southeast Asian nations promoting trade, economic growth, and social progress. Transatlantic Trade and Investment Partnership TTIP; a proposed free trade agreement between the EU and the US. Trans-Pacific Partnership TPP; a proposed RTA that includes 12 nations throughout the Asia-Pacific region. trade bloca combination of countries in an RTA.

Lesson 16 Objectives  Trace the evolution of free trade from GATT to the World Trade Organization.  Describe the benefits of global free trade.  List four common barriers to global free trade.  Summarize seven major active and proposed regional trade agreements.  List the goals and principles of the WTO. Slide 17F

Goodbye GATT. Hello WTO. Slide 17G  GATT formed in 1947; outdated by 1995  World Trade Organization (WTO) succeeds GATT  Sets the bar for basic rules and terms of free and fair trade; members may improve upon but may not fall upon basic terms  Most nations are members of the WTO

Slide 17H Free Trade: Benefits and Barriers  Benefits: better cheaper goods, economic growth, innovation, employment and higher wages, reduced hostilities  Barriers: tariff, licensing requirements, quotas, local content requirements

Slide 17I Free Trade Agreements  FTAs are directly negotiated between two or more countries  FTA’s expedite and enhanced free trade  Doha Round is WTO negotiation started in slow process  USTR and ITA negotiate and administer U.S trade agreements

Regional Trade Agreements  NAFTA  ASEAN  EU  GCC  MERCOSUR Slide 17J

RTAs coming soon...or not.  TTP: Trans- Pacific Partnership  TTIP: Transatlantic Trade and Investment Partnership Both the TTP and TTIP are controversial and face uphill battles to approval. Criticisms center around environment intellectual property and power struggle issues. Slide 17K

The Big Picture Slide 17L There are many benefits to free trade, including better, cheaper goods, economic growth, increased innovation, and a reduction of hostilities between trading partners. Barriers to trade are tactics which are protectionist in nature, such as tariffs, licenses, and quotas. The WTO multination agreement provides a basic level of free and unrestricted trade. Many countries and economic units negotiate FTAs to expedite and enhance free trade. RTAs are multilateral trade agreements within a particular global region. Two proposed, controversial, and potentially powerful RTAs are TTIP and TPP. To be financially literate in the 21st century, you should know about the benefits of free trade, and about the agreements and organizations that shape global trade.