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Advanved International Business > Week 5 > Flashcards

Week 5 Flashcards

1
Q

What is the most frequent form of Non-tariff measures (NTMs)

A

Technical regulations because of safety reasons. It is affecting 40% of product lines and about 65% of world import.

Example story: Tianjin port city 2015 big explosion because of certificates which were not correct.

Anyone importing dangerous chemical shall hold an unexpired, unsuspended and unrevoked permit issued by the Ministry of the Environment.

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2
Q

How to keep track of measures including Tariffs, Duties, Non-Tariff Measures (NTMs) etc.?

A

Global Trade Alert (GTA) is an independent initiative that monitors and reports on various forms of government-imposed trade restrictions and other interventions that may affect international commerce. (pls check also charts on page 12)

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3
Q

Norms: A form of protectionism? A non-tariff barrier?

A

There are different norms and standards in Switzerland and the EU as example in the kitchen. This gives different pros and cons. Swiss companies have less competition but also limited options to export their products. The Swiss customers instead need to buy the products in Switzerland and have difficulties in importing these products.

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4
Q

What important event in Europe has happend in 2004 and 2007 in terms of Trade Agreements?

A

In 2004, a significant event related to trade agreements occurred in Europe with the enlargement of the European Union (EU). On May 1, 2004, ten new member states joined the EU in what is often referred to as the “2004 EU Enlargement.” These new member states included:
- Cyprus
- Czech Republic
- Estonia
- Hungary
- Latvia
- Lithuania
- Malta
- Poland
- Slovakia
- Slovenia

In 2007, another important event related to trade agreements in Europe was the accession of two new member states to the European Union:
- Bulgaria
- Romania
On January 1, 2007, both countries became full members of the EU.

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5
Q

What are the benefits of Swiss Free Trade Agreements (FTAs)?

A

Swiss (FTAs) provide benefits like:

  • Easier Market Access: Swiss businesses get preferential entry to partner markets, boosting exports.
  • Economic Growth: FTAs fuel economic expansion and diversify trade partners.
  • Competitive Edge: Swiss firms gain an edge in global competition.
  • Attracting Investment: FTAs make Switzerland appealing for foreign investment.
  • Lower Input Costs: Industries benefit from cheaper imports.
  • Innovation and Tech Transfer: FTAs encourage knowledge exchange.
  • Job Creation: Increased trade can lead to more jobs.
  • Services Trade: Expands opportunities for Swiss service providers.
  • Diplomatic Ties: FTAs strengthen international relations.
  • Support for SMEs: Provisions help smaller businesses access global markets.

In short, Swiss FTAs enhance economic growth, boost trade, and strengthen Switzerland’s global standing.

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6
Q

What are Regional trade agreements (RTAs)?

A

Reciprocal trade agreement between two or more partners. Including free trade agreements (FTAs) and customs unions.

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7
Q

Examples for Free Trade Area?

A

–> removing tariffs and non-tariff barriers

e.g.:
- NAFTA (Japan - Singapore)
- TFTA
- TPP
- TTIP

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8
Q

Examples Customs Union?

A

–> Free Trade Area + adoption of a common set of policies towards imports of countries from other regions

e.g.:
- EU-Turkey
- Switzerland - Liechtenstein
- MERCOSUR

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9
Q

Examples for Common Market?

A

–> FTA + CU + free movement of labour and capital within the regional partnership

–> in progress CARICOM, COMESA and MERCOSUR

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10
Q

When do measures become barriers?

A
  • Lack of transparency
  • Discriminatory treatment (MFN or NT)
  • More restrictive than necessary
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11
Q

What is classified as dual use?

A

if the product or compliments can be used for military services

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12
Q

Switzerland in comparison with Singapore and China in terms of Trade (% of GDP)

A

Trade is relevant for Switzerland but not as relevant as for Singapore. China does not depend so much on trade since they have a much higher domestic market.

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13
Q

Top 20 Swiss Trade Partners (Exports)

A
  1. Germany
  2. USA (without existing FTA)
  3. France
  4. Italy
  5. China
  6. UK
  7. Japan
  8. Spain
  9. Netherlands
  10. Austria
  11. Hong Kong
  12. Singapore
  13. Belgium
  14. Canada
  15. South Korea
  16. Slovenia
  17. Russia (without existing FTA)
  18. Emirates Arab.
  19. Poland
  20. Australia (without existing FTA)
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14
Q

Top 20 Swiss Trade Partners (Imports)

A
  1. Germany
  2. Italy
  3. France
  4. China
  5. USA (without existing FTA)
  6. UK
  7. Austria
  8. Emirates Arab.
  9. Ireland
  10. Spain
  11. Netherlands
  12. Belgium
  13. Japan
  14. VIetnam (without existing FTA)
  15. Czech Republic
  16. Poland
  17. Singapore
  18. India (without existing FTA)
  19. Turkey
  20. Hungary
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15
Q

Why is it impossible to have free trade agreement with the USA?

A

Because of disagreement in agricultural sector policies.
However, the free trade agreement is not even so important because the trade is working also good without agreements. And nowadays USA is even more important export partner for CH than Germany.

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16
Q

Examples for Economic Union?

A

–> FTA + CU + CM + adoption of a common currency and / or harmonization of monetary, physical, and social policies

e.g.:
- EU

17
Q

Preferential trade arrangements (PTAs)?

A

Unilateral trade preferences. Including Generalized System of Preferences (GSP) schemes (under which
developed countries grant preferential tariffs to imports from developing countries), as well as other nonreciprocal preferential schemes granted a waiver by the General Council.

Is usually discriminatory and stand against the MFM that you need to treat everybody the same.

Half of world trade is already subject to zero MFN tariff rates.

18
Q

Swiss-Chinese FTA in force since July 2014

A

Switzerland and Island are the only countries who have such a deal with China.

CH and China had 8 rounds of negotiations (average).

19
Q

RTAs: Political Motivations

A
  1. Building confidence and avoiding conflicts: Examples ECSC (eventually becoming the EU) and ASEAN
  2. Security of regional partners against threats from outside: SADCC (reduction of dependency on South
    Africa during Apartheid)
  3. Enhance bargaining power towards transnational corporations and trading partners: Andean Pact
    of 1969, e.g. region-wide industrial licencing. Pooling of diplomatic resources might give LDCs a stronger voice in
    negotiations, e.g. CARICOM.
  4. Increase attractiveness to potential investors: Commitments made within a regional forum can be more
    attractive to potential investors, than those made in global institutions
  5. Facilitation of negotiations and implementing agreements: Far easier to negotiate with a few partners on
    regional level, than with many on a global level
20
Q

RTAs: Economic Motivations

A
  1. Choosing regionalism over multilateralism:
    − Regionalism enables a continuing protection of sectors that would not survive in global
    competition, e.g. EU tariff peaks for agricultural products.
    − Regional agreement could also be used to reform inefficient domestic sectors and expose them
    to global competition.
    − Regionalism provides opportunities for ‘deeper integration’, also known as “WTO Plus”, e.g.
    US, Singapore, Chile, Australia. Topics: Investment, Environment, Anti-trust, intellectual property.
    NAFTA and TTIP are examples.
  2. Preferring regionalism to unilateralism or the status quo:
    − Larger (home) markets and increased foreign investment
    − E.g. After Mexico joined NAFTA in 1994 FDI inflow in Mexico increased dramatically. Similar observations once
    ASEAN became a free trade area
21
Q

The Swiss FTA Network

A

The most agreements are through EFTA (see page 37) just five bilateral FTAs which are:
- EU (1972)
- Faeroe Islands
- Japan (2009)
- PR China (2014)
- UK (2021)

22
Q

UK joins CPTPP

A

In the Video there was a big announcement that UK is joining the CPTPP Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

For Malaysia it is quite nice since this was the only country with which UK didn’t have an agreement before.

23
Q

What does the TPP have to do with free trade?

A
  1. Plurilateral, voluntary, geographically defined
    = a regional club with preferential realtions among members
  2. Corpus of (hard and soft) legislation
    - Abolishment of tariffs (in sensitive areas over 10 years or more), improved market access
    - Body of new, extended or amended rules
    - “WTO-plus”, “GATS-plus”, “GPA-plus”, +TRIPS-plus”

dual nature: Liberalization + common rules

24
Q

Who is part of the TPP-12, also known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)?

A
  • Australia
  • Brunei
  • Canada
  • Chile
  • Japan
  • Malaysia
  • Mexico
  • New Zealand
  • Peru
  • Singapore
  • Vietnam
    (- USA)
    The United States was initially part of the negotiations for the Trans-Pacific Partnership (TPP), but withdrew from the agreement under the Trump administration. The remaining 11 countries renegotiated and signed the agreement in March 2018, forming the CPTPP. Please note that there might have been further developments after September 2021, which I would not be aware of.

Please note that the TPP is based on 30 Chapters which need to be fulfilled. There are 4 topics which e.g. China can not meet (state owned, enterprises, transparency and anti corruption, environment and labor).
Furthermore as soon as one Country of TPP has a Veto the nominated Country can not join / enter the agreement.

25
Q

Current situation in global trade - according to the economist

A

Main driver after the pandemic was the increased demand in having enough storage in order to prevent bottleneck.

Example in the video was that the demand for computer chips increased.

Advanved International Business (9 decks)

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