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Chapter 17

Chapter 17. Global Trade: Europe and the Developed States. The Triad. Basis of global trade in triad of regions (US, EU and East Asia) EU action focused on these regions Rugman - trade greater at regional level than global level Most trade intra-regional.

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Chapter 17

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  1. Chapter 17 Global Trade: Europe and the Developed States

  2. The Triad • Basis of global trade in triad of regions (US, EU and East Asia) • EU action focused on these regions • Rugman - trade greater at regional level than global level • Most trade intra-regional. • Most other trade are inter-regional between triad.

  3. The EU and the WTO • WTO - multi-lateral forum • All EU states represented by Commission • Develops common position based on Common Commercial Policy • Commits EU to fair and free trade

  4. CCP and WTO In line with WTO, CCP comprises three elements: • The dispute settlement mechanism • Trade Policy Instruments. • Monitoring of third party commercial defence actions.

  5. Intra-Industry Trade • EU trades with states in same types of products Created by: • Economies of scale • Specialisation • Taste overlap • Geographic and economic proximity

  6. Intra-Industry Trade Types of trade in IIT: • horizontal trade in similar type of products (in similar class and product range) • trade in vertically differentiated products distinguished by quality and price (such as importing high quality textiles and exporting low quality textiles). • vertical specialisation of production that results in trade of similar types of goods at different stages of the product value chain.

  7. EU and the Triad: Japan • Fifth largest trading partner • 4.5 % of EU exports • 7.2 % of EU imports • 4.1 % of EU FDI Inflows • 5 % of EU stock of FDI • Limited dialogue between partners.

  8. EU and the Triad: the US • 25 % of EU exports • 15 % of EU imports • Largest source of EU FDI inflows and outflows • Bilateral action: `New Trans-Atlantic Agenda’

  9. Major EU-US Controversies • Beef hormone • Bananas • Steel • GMO • Aircraft subsidies • Foreign sales corporations

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