Chapter 17: International Trade Section 4: Modern

Transcript:Chapter 17: International Trade Section 4: Modern:
Chapter 17: International Trade Section 4: Modern International Institutions pgs.532-537 Regional Trading Groups & Customs Unions Following the failed protectionist policies of the 1930s, nations have sought to expand trade & reduce trade barriers. They have organized regional trading groups to create free-trade zones, specific regions in which trade between nations takes place w/o protective tariffs. Some have created customs unions, agreements that abolish trade barriers among the members and establish uniform tariffs for non-members. Some of these are called common markets. As a result of these efforts, global tariffs have dropped by about 1/3. Group 1-The European Union In 1957, six European nations recognized the benefits of abolishing trade barriers & started the Common Market. In 1993, it evolved into the European Union, or EU, and members surrender some sovereignty is specified area, which makes it unique. The union has the same currency (the euro) and the same foreign policy. The EU grew and by 2007 it now has 27 members. The EU accounts for about 20% of global exports and imports, making it the world’s biggest trader. It has the ultimate goal that Europe’s national borders will be no more a barrier to free trade than are the borders of the U.S. states. Group 2- NAFTA In 1994, the North American Free Trade Agreement, or NAFTA started between Canada, the U.S., & Mexico. It is the largest free-trade zone in the world. It immediately eliminated tariffs on half of the goods exported to Mexico from the U.S. The agreement called for an eventual phase-out of all trade barriers on goods & services. It also called for improved protection of intellectual property rights, stronger environmental & worker protections & standardized investment policies. Economically, NAFTA appears to have achieved its intended result. Two-way agricultural trade between Mexico and the U.S. has increased 125%. Overall trade between the three partners more than doubled during the 1st ten years. Group 3-Mercosur Mercosur (Mercado Comun del Cono Sur) This group promotes the movement of goods and people in South America. Formed in 1995, Mercosur eliminated tariffs on 90% of goods traded between the group’s full members (Argentina, Brazil, Paraguay, & Uruguay). Venezuela became a full member in July 2006. Counting associate members Mexico, Chile, Bolivia, and Peru, Mercosur has become the world’s 4th largest trade association. Group 4-ASEAN The Association of Southeast Asian Nations was formed in 1967 to accelerate economic growth, social