Download International Trade Agreements

International Trade Agreements
Terms of Trade
 The rate at which a country a country’s ______________ are exchanged
for its ________________
 Terms of trade establish an ____________________________ for one
product in terms of another product
Arguments for Restriction of Trade
 Negative effects on __________________________________: Importing
goods, without increasing exports, results in the exporting of jobs
 Retaliation: Domestic producers argue that we should not let
____________________________________ into our country if our goods
are __________________________ from their markets
 Prevents Dumping: The deliberate practice of selling a product abroad at a
lower price than the ___________________________
 Protection: Trade restrictions offer protection to “vital” industries (ex.
Military equipment, nuclear technology) and can also be used to protect
developing or “infant” industries from foreign competition
Present barriers to trade include:
 Tariffs (import duties): These are _________________________ placed
on certain imported goods
 Subsidies: _______________________________ to domestic producers
(ex. Softwood lumber industry)
 Trade Sanctions and embargoes: Gov’t may impose trade sanctions on a
nation whose ________________________________ are unacceptable
(ex. South Africa during Aparthied, Cuba and the United States
Visible trade refers to _______________________________ being traded.
 Non-merchandise (or invisible trade) is the exchange of
___________________________________________________________
_____________________________. Invisible trade consists of money
flows often without tangible products traded in return.
Canadian Trade Policy
 During the past 150 years, trade restrictions have decreased globally in
general
 The US has greatly influenced Canadian National Trade Policy
 Why?
________________________________________________________________
General Agreement on Tariffs and Trade (GATT)
 This was an ____________________________ agreement developed in
1947 designed to _____________________ trade barriers among
member nations
 In 1995 __________________________________________________
replaced GATT and grew to 132 members (countries)
 Since 1995, 12 more countries have joined the WTO and average tariffs
have continued to fall
Free Trade
 Within a free trade area, trade between member nations is conducted
without ______________________
 The North America Free Trade Agreement (NAFTA) established in 1994
allowed for free trade between
_________________________________________________________
NAFTA
 Advocates of NAFTA pointed out that the Canadian economy would
____________________ if it did not freely trade with the US
 Opponents of NAFTA warned of the potential ______________________
that could occur if businesses were to relocate to Mexico to take
advantage of lower wages and lower standards for worker safety and
environment