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Trade Agreements

Trade Agreements. Unit 2 Activity 10. GATT - General Agreement on Tariffs and Trade. Each agreement was called a round Geneva Annecy Torquay Geneva II Dillon Kennedy Tokyo Uruguay. GATT - General Agreement on Tariffs and Trade. The outcome of each round

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Trade Agreements

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  1. Trade Agreements Unit 2 Activity 10

  2. GATT - General Agreement on Tariffs and Trade • Each agreement was called a round • Geneva • Annecy • Torquay • Geneva II • Dillon • Kennedy • Tokyo • Uruguay

  3. GATT - General Agreement on Tariffs and Trade • The outcome of each round • Each agreement bound members to reduced tariffs • Economic benefits • Increased the trade for countries • Economic set-back • Trade in services and "intellectual property" such as computer software has grown much more rapidly than traditional merchandise exports, and has made rules designed for trade in manufactured goods obsolete

  4. GATT’s Three Basic Principles • nations are to limit imports only through tariffs and not through quotas or other non-tariff barriers • multilaterally negotiated tariff reductions • signatory countries agree not to discriminate between member states

  5. NAFTA - North American Free Trade Agreement • Participating Nations • United States • Mexico • Canada

  6. NAFTA Agreement • Progressively eliminates almost all U.S.-Mexico tariffs over a 10-year period, with a small number of tariffs for trade-sensitive industries phased out over a 15-year period. Mexico-Canada tariffs are also phased out over a 10-year period. Tariff reduction schedules between the United States and Canada negotiated in the Canadian Free Trade Agreement are retained. Eliminates other barriers to trade such as import licensing requirements and Customs user fees. Establishes the principle of national treatment, for ensuring that NAFTA-origin products trade between NAFTA countries will receive treatment equal to similar domestic products. Guarantees service providers of the three countries equal treatment in the NAFTA area, including the right to invest and the right to sell services across borders. Establishes five basic principles to protect foreign investors and their investment into the free trade area: (a) nondiscriminatory treatment, (b) freedom from performance requirements, (c) free transference of funds related to an investment, (d) expropriation only in conformity with international law, and (e) the right to seek international arbitration for a violation of the agreement's protections.

  7. NAFTA - North American Free Trade Agreement • Economic benefit • created the world’s largest free trade area • Eliminate barriers to trade and facilitate the cross-border movement of goods and services. • Promote conditions of fair competition. • Increase investment opportunities • Economic Set-back • negative impacts on farmers in Mexico who saw food prices fall based on cheap imports from U.S • negative impacts on U.S. workers in manufacturing and assembly industries who lost jobs • more than a million Mexican farmers and their families have had to abandon their land and livelihood because they are unable to compete with subsidized food crops from the United States

  8. CAFTA - Central American Free Trade Agreement • Originally, the agreement encompassed the United States and the Central American countries of Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua, and was called CAFTA. In 2004, the Dominican Republic joined the negotiations, and the agreement was renamed DR-CAFTA.

  9. CAFTA - Central American Free Trade Agreement • The agreement would eliminate almost all trade barriers between the United States, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and also the Dominican Republic.

  10. CAFTA - Central American Free Trade Agreement • thanks to the cheaper imports the demand for imported good rises and with the increase in volume of imported goods the revenue from internal indirect taxes rises too • for U.S. companies, CAFTA would offer guaranteed reciprocal access for our most competitive exports, including agricultural products • allow slightly higher sugar shipments to the USA, above the annual U.S. sugar import quota, which is designed to prop up domestic prices • as negotiated, will harm, rather than help, farmers and workers in Central America who are struggling to overcome poverty • estimate that there would be a net loss of fiscal revenue due to the CAFTA in all countries

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