AEM 230 Final

AEM 230 Final - Trade& Finance Final 09:07:00 ←...

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Unformatted text preview: Trade & Finance Final 11/05/2009 09:07:00 ← Carbaugh “International Economics” ← Chapters 7,8,9,10,12,16,17 ← ← North American Free Trade Agreement • NAFTA’s origins o Mexico = domestic economic reforms in the 1980’s o Tariffs cut and non-tariff barriers reduced, joined GATT in 86 o Privation, deregulation, Canada/US Free Trade Agreement 89 • Effective in 1994 - Objectives o Increase trade within region relative to outside trading o Increase competitiveness and exports to other countries o Enhance industrial complementary • Side agreements – obstacles to agreement o Investigate abuses in environment or labor o Impose fines/trade sanctions if a country failed to enforce • Other Effects o US job losses because of imports/plant relocations to MX/CA o United States was the obvious dominant partner ← European Union • 1957 – Treaty of Rome : 6 member European Community o Belgium, Luxembourg, Netherlands, France, Germany, Italy • Objectives o Unify post WWII Europe o Abolish trade restrictions and impose a common external tariff, free up movement of capital and labor o Common polices for agriculture/transportation/competition • 1971 – adopted 10 year plan • 1973 –UK, Ireland, Denmark 1981-Greece 1986 – Spain/Portugal • 1987 – Single Europe Act o common policy making in environment, monetary policy, health/safety, foreign policy • 1991 – Maastrict Treaty o coordination of key areas, movement towards common currency, name “European Union” • 1994 – European Economic Area (EEA) agreement with European Free Trade Association (EFTA) • 1995 – Austria, Finland Sweden • 1999 – Agenda 2000 3 year transition to Euro currency (2002) • 2004- Cyprus, Czech Rep. Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, Slovenia • Political Benefit – 5.3% increase in GDP $679.5 billion gain ← ← Preferential Trade Agreement • 1) Free Trade Area o Reduced trade barriers among members but each member maintains its own tariffs and other trade barriers with other nations i.e. US/Canada FTA (89) , NAFTA (93) • 2) Customs Union o No trade barriers among members and common external tariffs and non tariff barriers with other nations i.e. “Benexlux” precursor to EU Mercosur – Argentina, Brazil , Uruguay, Paraguay • 3) Common Market o customs union plus harmonization of national tax systems, social insurance, agricultural policies, labor/capital migration, fixed exchange rates with each other i.e. European Community, European Monetary System • 4) Economic Union o common market plus harmonization of all econ policies, common currency, common foreign policy...
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AEM 230 Final - Trade& Finance Final 09:07:00 ←...

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