Ch 2 - WTO AND WTS Flashcards
Market liberalism
- core principle of WTO - an open or liberal international trade system raises the world’s standard of living.
Non-discrimination
Ensures that each WTO member faces identical opportunities in trade with other WTO members
Generalized System of Preferences
Under which advanced industrialized countries can allow manufactured exports from developing countries enter their market at lower tariff rate.
National Treatment
Requires governments to treat domestic and foreign versions of the same product identically once they enter the domestic market
Intergovernmental bargaining
Is the WTO’s primary decision-making process, and it involves negotiating agreements that directly liberalize trade and indirectly support that goal.
Hegemonic stability theory
Hegemons act like privileged groups and thus overcome the free-riding problem
Public good
Non-excludability and non-rivalry
Effectiveness of WTO negotiations
The need for reform that limits the number of governments actively participating in negotiations
Legitimacy
Reform that opens the WTO process to NGOs
Regional trade agreement
Trade agreement between two or more people located in a same region of the world - offering preferential market access to the other
Free trade
Governments eliminate all tariffs on goods imported from other members but retain from the non members
Custom union
Member governments eliminate all tariffs on trade between members of the union and create a common tariff that is imposed on goods entering any member country of the union from countries outside the union.
Trade creation
Reduction of tariffs on imported goods = greater flow of goods across borders
Trade diversion
Shifting from a more cost-efficient non-members, before the agreement, to a relatively higher cost from current member ( decrease in trade with non-members)
Multilateral trade system
An international political system that provides rules that regulate how governments can use policies to influence cross-border flow of goods and services
