18.2.28_Homework1.docx

2 discuss treaty of maastricht eu and nafta 6

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2) Discuss treaty of Maastricht, EU and NAFTA. 6
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HOMEWORK ASSIGNMENT 1: CHAPTER 1-7, 15 In the spirit of economic cooperation the Maastricht Treaty of European Union was signed in 1992. The treaty called for greater economic integration, common foreign and security policies and cooperation between police and other authorities on crime, terrorism and immigration issues. The agreement laid the groundwork for establishing a single European currency (the euro). Additional nations have joined since its originally signing. The United States entered trade negotiations with Canada in the early 1990’s and in 1994 the North American Free Trade Agreement was established eliminating tariffs and all duties and quantitative restrictions with the exception of those on a limited number of agricultural products traded with Canada. 3) What is the rationale for government intervention in trade and investment? The rationale for government intervention in trade and investment include several motivating factors. Tariffs and other regulations which can generate revenue. Government intervention ensures the safety, security and welfare of citizens. Intervention means governments can pursue economic, political and social objectives. Finally, intervention can aid in serving the interest of both industry and companies. 4) List and describe the non-tariff barriers related to price influence and related to quality control. Nontariff barriers represent administrative regulations, policies and procedures which directly or indirectly interfere with international trade. Those related to price influence include subsidies, aid and loans, customs valuation and other special fees, customs clearance and documentation. Subsidies consist of financial assistance from governments to domestic companies to help them be more competitive in the marketplace. Governments may extend aid and loans to other countries but stipulate they must spend the funds in the lending country. Customs officials must determine value of traded products. The non-tariff barriers related to price influence include government incentives subsidies as well as aids and loans. Non-tariff barriers related to quality control. Other price influences may be requirements that deposits be made in advance of shipment. Quality controls limit the supply of a product, which increases price. Influencers include quotas, administrative legislation standards and buy local. A limit on the quantity of a product that may be imported or exported in a given period of time. Voluntary export restraints are a negotiated limitation of 7
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HOMEWORK ASSIGNMENT 1: CHAPTER 1-7, 15 exports from one country to another and may result in higher prices to customers. Buy local legislation represents laws intended to favor purchases of domestically sourced products over imported products.
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