trade

Examples of trade in the following topics:

• Decline in International Trade

• International Trade

• Absolute Advantage and the Balance of Trade

  • Absolute advantage and balance of trade are two important aspects of international trade that affect countries and organizations.
  • Absolute advantage and balance of trade are two important aspects of international trade that affect countries and organizations .
  • A positive balance is known as a trade surplus if it consists of exporting more than is imported; a negative balance is referred to as a trade deficit or, informally, a trade gap.
  • The balance of trade is sometimes divided into a goods and a services balance.
  • The European Free Trade Agreement has helped countries international trade without worrying about absolute advantage and increases net exports.

• Trade Blocs and Common Markets

  • A trade bloc is an agreement where regional barriers to trade are reduced or eliminated among the participating states.
  • The North American Free Trade Agreement (NAFTA) is an example of a formal trade bloc.
  • Trade blocs can be stand-alone agreements between several states, such as the North American Free Trade Agreement (NAFTA) or part of a regional organization, such as the European Union.
  • However, entering a trade bloc also strengthens ties between member parties.
  • For better or for worse, trade blocs are prevalent.

• Global Trade: Inequalities and Conflict

  • Global trade (exchange across international borders) has increased with better transportation and governments adopting free trade.
  • The United States is party to many trade agreements, but one of the best known is the North America Free Trade Agreement (NAFTA).
  • Like other free trade agreements, NAFTA promotes free trade among members, which include the United States, Canada, and Mexico.
  • But as trade has become more global and more complex, trade negotiations have expanded to include more countries.
  • Analyze the impact of global trade on society and industry, ranging from mercantilism to free trade orientation

• Promoting Free Trade

  • According to the law of comparative advantage, the policy permits trading partners mutual gains from trade of goods and services.
  • Unilateral promotion of free trade is when a country decides to reduce its own trade barriers without any promise of action from its trading partners.
  • Examples of multilateral promotion of free trade are trade agreements such as the North American Free Trade Agreement (NAFTA) in which the US, Mexico, and Canada agreed to allow free trade among one another.
  • Governments can promote free trade and impact economic growth.
  • Describe the effects of free trade and trade barriers on long run growth

• Costs of Trade

  • Economic inefficiency can be created through trade diversion.
  • When free trade is applied to only the high cost producer it can lead to trade diversion to not the most efficient producer, but the one facing the lowest trade barriers, and a net economic loss.
  • The nature of industries and trade increases economic inequality.
  • Economists have studied free trade extensively and although it creates winners and losers, the main consensus is that free trade generates a large net gain for society.
  • Free trade does not have tariffs and results in net gain for society.

• Technological Barriers

  • Standards-related trade measures, known in WTO parlance as technical barriers to trade play a critical role in shaping global trade.
  • As tariff barriers to industrial and agricultural trade have fallen, standards-related measures of this kind have emerged as a key concern.
  • These standards-related trade measures, known in World Trade Organization (WTO) parlance as "technical barriers to trade," play a critical role in shaping the flow of global trade.
  • But standards-related measures that are non-transparent, discriminatory, or otherwise unwarranted can act as significant barriers to U.S. trade.
  • Most countries are now part of the World Trade Organization.

• Trade and Globalization

  • Countries engage in international trade for two basic reasons, each of which contributes to the country's gain from trade.
  • The World Trade Organization (WTO) was formed to supervise and liberalize international trade on January 1, 1995 under the Marrakech Agreement.
  • If a government removes all trade barriers, a condition of free trade exists.
  • In 2008, China's two-way trade totaled US $2.56 trillion.
  • In 2001, it also joined the World Trade Organization.

• Economics

  • Trade barriers are government-induced restrictions on international trade, which generally decrease overall economic efficiency.
  • Trade barriers are government-induced restrictions on international trade.
  • Man-made trade barriers come in several forms, including:
  • Most trade barriers work on the same principle–the imposition of some sort of cost on trade that raises the price of the traded products.
  • If two or more nations repeatedly use trade barriers against each other, then a trade war results.