Notes 14-16 - Day 19 Global Economy Globalization increasing last 30 years Trade as a percent of GDP 1960 9 Trade as a percent of GDP 2000 20 Trade

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Day 19 – Global Economy Globalization – increasing last 30 years Trade as a percent of GDP 1960 – 9% Trade as a percent of GDP 2000 – 20% Trade as a percent of GDP in 2008 – 29% Since the 1980’s the U.S. has had an overall trade deficit, reaching a record 40 billion in 1987, dropping to10 billion by 1991, reaching 600 billion by 2006 (6% of GDP) Overall World GDP was rising 4% a year by 2005, but fell to -1.6% by 2009. Growth and GDP are not proportional with population around the world; many countries with low GDP’s have experienced impressive annual growth. Others, not. Growth rates 2000-2006: Advanced Economies 3.5% or less. Trade Deficit: when a country imports more than it exports, Imports > Exports Trade Surplus: when a country exports more than it imports, Exports > Imports The U.S. has had a significant trade deficit since the early 1980’s, and has been mainly increasing since. 1987 – $40 billion. 1991 - < $10 billion, 2006 600 billion. Also called balance of goods . Free Trade Versus Protectionism: Protectionism: barriers to imports, to protect domestic jobs, industries. Quotas – physical limits on imports Tariffs – taxes on imports Non -tarriff barriers – limits on imports that are more subtle, such as environmental or human rights legislation, or domestic subsidies. These types of “barriers” are more open to interpretation. Free Trade: economic theory suggests that it is better…sometimes comes with costs to certain groups, sectors of the economy. Fair Trade: free trade with fair and full access to markets; also includes concerns about labor practices and human rights, environment, etc. 1
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Trade Partners for 2009 in Billions $ www.census.gov Trade Surplus (we export more) Hong Kong 17.56 Netherlands 16.24 Australia 11.58 United Arab Emirates 10.61 Singapore 6.62 Brazil 6.10 Panama 4.05 Turkey 3.43 Chile 3.41 Qatar 2.21 Trade Deficit (we import more) China -226.83 Mexico -47.54 Japan -44.77 Germany -27.95 Ireland -20.55 Canada -20.18 Venezuela -18.73 Nigeria -15.47 Italy -14.18 Algeria -9.61 2
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Total trade (exports and imports) Canada 429.64 China 365.98 Mexico 305.53 Japan 147.13 United Kingdom 93.2 South Korea 67.88 France 60.56 Taiwan 46.81 Brazil 46.25 All Europe 589.49 Winners and Losers: U.S. Industry Dominant from 1940’s-60’s. Challenged in 1970’s by Europe and Japan, new technology,new management
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This note was uploaded on 10/19/2011 for the course ECON 104 taught by Professor Dolenc during the Spring '08 term at UMass (Amherst).

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Notes 14-16 - Day 19 Global Economy Globalization increasing last 30 years Trade as a percent of GDP 1960 9 Trade as a percent of GDP 2000 20 Trade

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