Chapter 2 - The Global Trade Regime Flashcards
Why is importing harmful and what Countries usually do?
Importing takes the revenue from local industries and businesses. they usually impose Tariffs.
What is GATT?
General Agreement on Tariffs and Trade
(1947 - 1994) signed by 23 nations
GATT was a multilateral agreement. It imposed obligations to reduce tariffs and other barriers to trade, such as quotas, and to prevent ‘dumping’, the sale of goods at a below-market price in order to wipe out competitors and capture market share.
What is WTO?
World Trade Organisation
Started 1995 with over 150 nations accounting for over 95% of the world trade.
The WTO regulates the implementation of some 60 international agreements covering investment rules in member countries, quarantine laws, intellectual property laws, product safety regulation, the rules governments use when buying goods and services from the private sector, and much much more.
Multilateral
Adj.
agreed upon or participated in by three or more parties, especially the governments of different countries.
Quota
Noun.
a limited quantity of a particular product which under
official controls can be produced, exported, or imported.
What is the difference between GATT and WTO?
GATT was a rather flexible institution; bargaining and deal making lay at its core, with significant opportunities for countries to “opt out” of specific disciplines. In contrast, WTO rules apply to all members, who are subject to binding dispute settlement procedures.
Basic Principles of WTO
Non-discrimination Reciprocity Enforceable commitments Transparency Safety valves
Non-discrimination
The requirement that foreign products be treated no less favorably than competing domestically produced products gives foreign suppliers greater certainty regarding the regulatory environment in which they must operate.
Reciprocity
the practice of exchanging things with others for mutual benefit, especially privileges granted by one country or organization to another.
Transparency
WTO members are required to publish their trade regulations, to establish and maintain institutions allowing for the review of administrative decisions affecting trade, to respond to request for information by other members, and to notify changes in trade policies to the WTO.
Safety valves
In specific circumstances, governments should be able to restrict trade. When competition becomes so vigorous as to injure domestic competitors.
Most-Favoured-Nation (MFN)
treating other people equally Under the WTO agreements, countries cannot normally discriminate between their trading partners.
Single Undertaking
Virtually every item of the negotiation is part of a whole and indivisible package and cannot be agreed separately. “Nothing is agreed until everything is agreed”.
National Treatment
is a basic principle of GATT/WTO that prohibits discrimination between imported and domestically produced goods with respect to internal taxation or other government regulation.
Technical Barriers to Trade (TBT)
a category of nontariff barriers to trade, are the widely divergent measures that countries use to regulate markets, protect their consumers, or preserve their natural resources (among other objectives), but they also can be used (or perceived by foreign countries) to discriminate against imports in order to protect domestic industries.
