today’s schedule – 12/7 trade barriers and agreements ppt
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Today’s Schedule – 12/7
• Trade Barriers and Agreements PPT• Free Trade Discussion/Debate• International Trade Project• HW–Read 18.2
Trade Barriers
• Preventing a foreign G or S from freely entering a nation’s territory
Import Quotas
• Limit on the amount of a G or S that can be imported–Often done to give U.S. businesses an
advantage in the U.S. market•Ex: Cotton
Tariffs
• Tax on imported goods• Custom Duty- a tax on certain items
purchased abroad
Effects of Trade Barriers• Limit supply• Limit specialization• Increased prices–Tariffs imposed on businesses are
passed along to consumer• Trade wars–Retaliation against a country
Arguments in Support of Trade Barriers• Protect jobs–Preventing foreign competition
• Protects infant industries –From more mature companies
• Necessary for national security–In time of war, want to produce G in the
U.S.• Protects foreign workers
Arguments For Free Trade• Forces specialization–Focus on industry nation is best at producing–Force workers to obtain skills necessary to
produce that G or S• Provides jobs and increased wages to workers
in other countries• Keeps prices low–Forces competition among domestic and
foreign businesses
International Trade Agreements
• Cooperation between at least two countries to reduce trade barriers and tariffs and to trade with one another• MFN Status–All countries with this status receive the
same benefits as given to one
International Trade Agreements
• World Trade Organization–Sponsor conferences to negotiate
reduced trade barriers–Enforces trade rules/agreements
• European Union–Collective of European countries who
act like one market
International Trade Agreements
• NAFTA–Free trade among Canada, U.S. and
Mexico•All tariffs to be eliminated by 2009
–Major protest over this•Move factories to Mexico along with jobs
International Trade Agreements
• APEC- Pacific Rim Countries• MERCOSUR- South American Countries• CARICOM- Caribbean Countries
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