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Chapter 2 International Trade Frameworks and Policy

Chapter 2 International Trade Frameworks and Policy. The Historical Dimension. The rise and fall of the Roman Empire and the emergence of feudalism can be attributed to trade. The Historical Dimension.

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Chapter 2 International Trade Frameworks and Policy

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  1. Chapter 2 International Trade Frameworks and Policy

  2. The Historical Dimension • The rise and fall of the Roman Empire and the emergence of feudalism can be attributed to trade

  3. The Historical Dimension • The principal approaches used to implement this emphasis was the Pax Romana, or the “Roman Peace,” and the common coinage

  4. The Historical Dimension • The Smoot-Hawley Act raised import duties to reduce the volume of imports into the United States to help restore domestic employment

  5. The Historical Dimension • Global division • After 1945, the world was split into West and East • With Soviet Union as the leader of the Eastern bloc and the United States for the Western world

  6. The Historical Dimension • Global division • The charter for an International Trade Organization (ITO), a series of agreements among 53 countries, was signed in 1948 • It was designed to cover:

  7. The Historical Dimension • Global division • The General Agreement on Tariffs and Trade (GATT) was initiated in 1947 • The World Bank and the International Monetary Fund were created

  8. Transnational Institutions Affecting World Trade • General Agreement on Tariffs and Trade (GATT)

  9. Transnational Institutions Affecting World Trade • World Trade Organization (WTO) • Created in _______ • Responsible for:

  10. Transnational Institutions Affecting World Trade • The Doha Round was initiated to:

  11. Transnational Institutions Affecting World Trade • International Monetary Fund (IMF) • Developed in ___ • Designed to provide ____________

  12. Transnational Institutions Affecting World Trade • World Bank • Also recognized as the International Bank for Reconstruction and Development, was formed in ____ • Key functions:

  13. Transnational Institutions Affecting World Trade • World Bank • Current areas of focus:

  14. Transnational Institutions Affecting World Trade • World Bank • Major challenge -

  15. Transnational Institutions Affecting World Trade • Regional institutions • European Coal and Steel Community – • Customs unions - • European Union (EU) -

  16. Transnational Institutions Affecting World Trade • Regional institutions • North American Free Trade Agreement (NAFTA), MERCOSUR - Latin America, and Gulf Cooperation Council (GCC) - • Transatlantic Business Dialogue (TBD)

  17. Trade Positions Compared • International trade positions have changed substantially when measured in terms of _______________ • The ____ share of total world export has declined precipitously since 1950s • An important development is the rise of __________

  18. Trade Positions Compared • Factors behind the decline in U.S. international competitiveness: • Perception within the U.S. private sector about international marketing being risky and complicated

  19. The Impact of Trade and Investment • The effect of trade – Export is important as it:

  20. The Impact of Trade and Investment • The effect of trade – Importance of imports:

  21. The Impact of Trade and Investment • The effect of international investment • Foreign direct investmentis extensive in many U.S. industries • Almost one in seven U.S. manufacturing employees works for a ____________

  22. The Impact of Trade and Investment • Even though theory suggests an open investment policy that welcomes foreign corporations, some degree of uneasiness exists about the rapid growth of such investment

  23. The Impact of Trade and Investment • Restriction on investments may:

  24. Policy Responses to Trade Problems • Have consisted mainly of political ad hoc reactions, which over the years have changed to protectionism • Voluntary import restrictions

  25. Policy Responses to Trade Problems • Non-tariff barriers

  26. Policy Responses to Trade Problems • Export promotion efforts • Earn foreign currency, encourage domestic employment, and increase domestic economic activity • Offering mixed aid credits

  27. Policy Responses to Trade Problems • Formation of export consortia

  28. A Strategic Outlook for Trade and Investment Policies • A U.S. perspective • Improve the quality and amount of information government and business share to facilitate competitiveness • Overcome its export reluctance and its short-term financial orientation • Invest in its people, providing education and training suited to the competitive challenges

  29. A Strategic Outlook for Trade and Investment Policies • Closer government–business collaboration is seen as one key to enhanced competitiveness

  30. A Strategic Outlook for Trade and Investment Policies • An international perspective: • Bilateral or multilateral trade and investment negotiations must continue • Design new mechanisms to evaluate restraint measures

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