+ Foreign Trade U.S. Trading with other Countries

+ International Trade It is the exchange of materials between countries The U.S. trades to other countries and we let other countries sell products to American consumers The U.S. tried to keep a favorable balance of trade, which means more sold to other countries than what is brought in from other countries Is this true of the United States?? ?Do we sell more than we bring in??

+ Trade Surplus vs. Trade Deficit More exports than imports Economic activity in the U.S. increases New jobs are created as businesses grow to meet consumer demands Amount exported is less than the amount imported Jobs are lost as economic activity slows down During the 1990s we were buying more foreign goods than people in other countries were buying American goods This continues today because we import more goods than we export

+ Trade Sanctions vs. Trade Embargos Limits the amount of goods a country may send into the United States Sanctions are used for many reasons Punishment for actions against another country Countries that violate human rights An embargo stops trade with a country The U.S. might impose an embargo for political reasons The U.S. has had trade embargos on countries such as Cuba, Iraq, and North Korea

+ Key Trade Organizations GATT WTO NAFTA EU

+ Key Trade Organizations International trade is increasing. The world’s economies are becoming more closely tied together. The idea of capitalism and free trade is spreading world wide. Businesses have branches in many countries. This is called globalization. Trade agreements between countries are sometimes made to help increase free trade. There are groups of countries that work together to reduce tariffs and quotas to help businesses in each country.

+ What is GATT GATT= General Agreement on Tariffs and Trade Founded after WWII in 1947 Formed and led by the United States Purpose: encourage world trade and postwar economic recovery 23 member countries 8 meetings held around the world Made agreements to reduce tariffs on manufactured goods

+ What is WTO? WTO= World Trade Organization Formed in 1995 Place where trade agreements can be made Oversees international trade agreements and handles trade disagreements Offers help to developing countries About 150 member countries

+ What is NAFTA? NAFTA: North American Free Trade Agreement (NAFTA) Formed in 1992, took effect in 1994 Canada, United States and Mexico Agreement lowered tariffs in order to increase trade between the countries Those in favor of NAFTA: thought it would create more jobs Fears of NAFTA: companies will leave, go to Mexico, jobs leaving

+ What is the EU? EU= European Union Idea began after WWII Uniting European countries was the best way to have peace Common market was created, trade barriers removed Now has 25 countries More than just an economic union Allows citizens of EU countries to travel across borders more easily A single form of money was introduced, the EURO (12 countries use it)