free trade

Examples of free trade in the following topics:

• Promoting Free Trade

  • Government can promote free trade by reducing tariffs, quotas, and non-tariff barriers.
  • NTBs act just like tariffs and quotas in that they are barriers to free trade.
  • Examples of multilateral promotion of free trade are trade agreements such as the North American Free Trade Agreement (NAFTA) in which the US, Mexico, and Canada agreed to allow free trade among one another.
  • Governments can promote free trade and impact economic growth.
  • Describe the effects of free trade and trade barriers on long run growth

• Costs of Trade

  • Free trade is a policy where governments do not discriminate against exports and imports.
  • Free trade is beneficial to society because it eliminates import and export tariffs.
  • One of the main disadvantages is the selective application of free trade.
  • Economists have studied free trade extensively and although it creates winners and losers, the main consensus is that free trade generates a large net gain for society.
  • Free trade does not have tariffs and results in net gain for society.

• Global Trade: Inequalities and Conflict

  • Global trade (exchange across international borders) has increased with better transportation and governments adopting free trade.
  • The United States is party to many trade agreements, but one of the best known is the North America Free Trade Agreement (NAFTA).
  • Like other free trade agreements, NAFTA promotes free trade among members, which include the United States, Canada, and Mexico.
  • Most countries are also members of regional free trade areas that lower trade barriers among participating countries.
  • Analyze the impact of global trade on society and industry, ranging from mercantilism to free trade orientation

• The Asia-Pacific Economic Cooperation

  • APEC is a forum for 21 Pacific Rim countries that seeks to promote free trade and economic cooperation throughout the Asia-Pacific region.
  • APEC is considering the prospects and options for a Free Trade Area of the Asia-Pacific (FTAAP), which would include all APEC member economies.
  • Since 2006, the APEC Business Advisory Council, promoting the theory that a free trade area has the best chance of converging the member nations and ensuring stable economic growth under free trade, has lobbied for the creation of a high-level task force to study and develop a plan for a free trade area.
  • There are approximately 60 free trade agreements, with an additional 117 in the process of negotiation in Southeast Asia and the Asia-Pacific region.
  • Explain the role The Asia-Pacific Economic Cooperation (APEC ) plays in ensuring free trade

• The North American Free Trade Agreement (NAFTA)

  • The North American Free Trade Agreement (NAFTA) is an agreement signed by the governments of Canada, Mexico, and the United States, creating a trilateral trade bloc in North America.
  • It superseded the Canada – United States Free Trade Agreement between the U.S. and Canada.
  • In terms of combined GDP of its members, the trade bloc is the largest in the world as of 2010.
  • --Canada trade was already duty free.
  • NAFTA has allowed agricultural goods such as eggs, corn, and meats to be tariff-free.

• Trade Blocs and Common Markets

  • A trade bloc is an agreement where regional barriers to trade are reduced or eliminated among the participating states.
  • The North American Free Trade Agreement (NAFTA) is an example of a formal trade bloc.
  • Trade blocs can be stand-alone agreements between several states, such as the North American Free Trade Agreement (NAFTA) or part of a regional organization, such as the European Union.
  • A single market is a type of trade bloc that is composed of a free trade area for goods, with common policies on product regulation, as well as freedom of movement on capital, labor, enterprise, and services.
  • A common market is a first stage towards a single market, and may be limited initially to a free trade area with relatively free movement of capital and of services, but not so advanced in reduction of the rest of the trade barriers.

• Introduction to Foreign Trade and Global Economic Policies

  • This commitment to free trade has both economic and political roots; the United States increasingly has come to see open trade as a means not only of advancing its own economic interests but also as a key to building peaceful relations among nations.
  • Congress for trade liberalization in the 1980s and 1990s.
  • Congress also grew reluctant to give the president a free hand to negotiate new trade liberalization agreements with other countries.
  • Despite these setbacks to free trade, the United States continued to advance trade liberalization in international negotiations in the 1990s, ratifying a North American Free Trade Agreement (NAFTA), completing the so-called Uruguay Round of multilateral trade negotiations, and joining in multilateral agreements that established international rules for protecting intellectual property and for trade in financial and basic telecommunications services.
  • Officially, the nation remained committed to free trade as it pursued a new round of multilateral trade negotiations; worked to develop regional trade liberalization agreements involving Europe, Latin America, and Asia; and sought to resolve bilateral trade disputes with various other nations.

• Absolute Advantage and the Balance of Trade

  • Absolute advantage and balance of trade are two important aspects of international trade that affect countries and organizations.
  • Absolute advantage and balance of trade are two important aspects of international trade that affect countries and organizations .
  • A positive balance is known as a trade surplus if it consists of exporting more than is imported; a negative balance is referred to as a trade deficit or, informally, a trade gap.
  • The balance of trade is sometimes divided into a goods and a services balance.
  • The European Free Trade Agreement has helped countries international trade without worrying about absolute advantage and increases net exports.

• Economics

  • Trade barriers are government-induced restrictions on international trade.
  • Most trade barriers work on the same principle–the imposition of some sort of cost on trade that raises the price of the traded products.
  • If two or more nations repeatedly use trade barriers against each other, then a trade war results.
  • In theory, free trade involves the removal of all such barriers, except perhaps those considered necessary for health or national security.
  • In practice, however, even those countries promoting free trade heavily subsidize certain industries, such as agriculture and steel.

• Current U.S. Trade Agenda

  • The United States would like to make the Internet a tariff-free zone, ensure competitive telecommunications markets around the world, and establish global protections for intellectual property in digital products.
  • Even as it holds high hopes for a new round of multilateral trade talks, the United States is pursuing new regional trade agreements.
  • High on its agenda is a Free Trade Agreement of the Americas, which essentially would make the entire Western Hemisphere (except for Cuba) a free-trade zone; negotiations for such a pact began in 1994, with a goal of completing talks by 2005.
  • In the 1990s, the U.S. trade deficit with China grew to exceed even the American trade gap with Japan.
  • In the absence of fast-track procedures, American efforts to advance the Free Trade Agreement of the Americas and to expand NAFTA to include Chile languished, and further progress on other trade liberalization measures appeared in doubt.