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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