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REVIEW CHAP 3,4 Dịp ngu như lồn, The definition - Coggle Diagram

- - - - Free trade restrains the power of the state and empowers individuals
      - Free trade brings people together across distance and cultures, leading to peace
      - Free trade makes everyone wealthier
      - Free trade encourage basic human rights
    - - Free trade zones are specially designated areas within a country that have separate laws that encourage trad
        
        .
        Preferential currency exchange rates, reduction of business start-up fees
        
        Reduction or complete removal of tariffs or fees on goods entering or leaving through the free trade zone
        
        Preferential access to distribution channels
      - Governments organizations designed to facilitate trade. The Export-Import Bank of the United States. The Bank, a U.S, governmental entity, provides credit to business to assist in financing exporting activities
      - Trade agreements between countries are the most prevalent form of actions that support trade (ease to movement of goods between countries
    - - Governmental Forms
        
        A democracy vests political power in the citizens of a country, either directly or through elected representatives.
        
        An authoritarian rests power in the hands of a small number of individuals or even one person(A monarchy)
        
        Dictatorships are governments in which the ruling elite or ruling individual holds all the political power
        
        Anarchism occurs when there is an absence of any ruling governmental form.
      - The comparative advantage theory posits that a country has an ability to produces a good or service at lower levels of opportunity cost than other countries
    - - Country level absolute advantages leads to trade
      - Trade leads to higher levels of innovation through specialization.
      - Absolute advantage theory suggests that a country has an advantage when it can produce more of a good or service than another country using the same amount of resources. The theory draws attention to the advantages countries hold in terms of certain activitied.
  - - - Free trade area
        
        Free trade areas are a group of countries that have entered into and agreement to reduce tariffs, quotas, and other barriers to the movement of good and services
      - Custom union
        
        Custom union members agree to remove barriers to the movement of goods and services and consent to uniform tariff policy toward nonmember countries.
      - Common market :
        
        Common markets remove barriers to trade within the market, maintain a common tariff for nonmembers, and allow the free movement of capital and labor within the market.
      - Economic union
        
        Economic union members have a harmonized economic policy between members, a common currency, and central bank
      - Political union
        
        Political union, the complete integration of political and economic policy, represents the final step before the creation of a new country
    - - Successful past integration builds skills and commitment to the integrative process.
      - A cultural disposition toward trade and connections and a lack of contested historical conflicts or events
      - Complementary resources that fill gaps for the countries involved, such as Canada, Mexico, and the United States
      - Countries in closer proximity to each other have a natural advantage for trade. Geographic distance increases costs and complicates shipping
    - - Offshoring and Outsourcing are increasingly common
        
        Offshoring refers to the movement of a business activity to another country
        
        Outsourcing refers to relinquishing organizational control of a business process and hiring an external third party to conduct the process
      - Bottom-of-pyramid
        
        The reduction of barriers to trade and investment presents an opportunity for companies to target bottom-of-pyramid costumers and for those consumers to obtain access to additional goods and services.
      - Business process outsourcing (BPO) activity. BPO activity focuses on business support services growing
  - - - The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations. A global organization that facilitates trade between its 153 member countries
      - The Function
        
        Dispute Resolution
        As the arbitrating party for settling trade disputes.
        
        Tariff Rates
        
        The World Organization helps establish tariff rates. In those the WTO focuses on transparency. The WTO asks member states to set ceilings tariffs for specific goods.
        
        The barriers may be established to protect consumers, prevent the spread of disease, to serve as punishment for failing to follow WTO trade rules ,or assist developing markets
        
        Most-Favored-Nation Status
        Upon joining the WTO, countries are ensured equal access to all member country markets. Tariffs and other barriers may be in place, but are applied consistently, resulting in a more level playing field.
        
        The Future
        The WTO as a forum for the negotiation of trade businesses and investors with the goal of further expanding trade liberalization.
    - - The European Union
        
        The definition
        
        The European Union (EU) is a political and economic union, consisting of 27 member states that are subject to the obligations and the privileges of the membership.
        
        Before 1993, the EU was not as big as it is today. European countries started to cooperate economically since 1951, when only states such as Belgium, France, Luxembourg, Germany, The Netherlands and Italy participated. Gradually, more countries decided to join. The last to join is Croatia – in 2013.
        
        Euro is the currency of the European Monetary Union
        
        Organization Of The European Union
        
        European Council: Made up of the heads of state from each member state, it sets the general political direction and priorities of the EU
        
        Council of the European Union: Made up of the national ministers of.member states, the Council of the European Union discusses and, together with the Parliament, adopts EU laws.
        
        European Parliament: Elected every five years, the members of the European Parliament draft legislation.
        
        European Commission: Consists of appointed commissioners and the EU's civil service. The European Commission proposes EU legislation and checks it is properly applied across the EU
        
        Court of Justice: The Court of Justice applies and interprets EU laws and agreements
        
        European Court of Auditors: The European Court of Auditors audits the implementation and financing of EU agreements by member states.
        
        European Central BankThe European Central Bank sets EU monetary policy.
      - Other European Trade Organization
        
        The largest such organization in Western Europe is the European Free Trade Association (EFTA). Iceland, Liechtenstein, Norway, and Switzerland are currently members
        
        The other main trade-related organization in Europe is the Commonwealth of Independent States.
        
        In 2009, in an attempt to remove trade barriers, Russia, Belarus, and Kazakhstan formed a customs union.
    - - North American free trade agreement
        
        The North American Free Trade Agreement (NAFTA) became effective in 1994; leading to the world's largest free trade area. As of 2008, it include 456 million people and $17.6 trillion of good and services
        
        The governments of all three nations pledge to promote economic growth through tariff elimination and expanded trade and investment. At present, however, there are no common external tariffs nor have restrictions on labor and other factor movements been eliminated.
      - Southern cone common market
        
        The Southern Cone Common Market, Mercado Commun del Sur, was founded in 1991 with the signing of the Treaty of Asunción
        
        MERCOSUR seeks the eventual elimination of barriers to trade, development of joint policies toward nonmembers, and a common currency. Implementation has not met expectations.
        
        Some member countries elect to use other organizations to resolve trade disputes instead of using MERCOSUR's administrative function.
      - Andean community
        
        The Andean Community was formed in 1969 to accelerate development of member states through economic and social integration
        
        In 1993, a free trade area was introduced and actions were taken to facilitate trade between members.
        
        The goals of this pan-South America organization are mainly political, although some discussions of economic integration have taken place.
      - Other Trade organizations or agreements
        
        In 1965, Antigua and Barbuda, Barbados, Guyana, and Trinidad and Tobago formed the Caribbean Free Trade Association (CARIFTA). In 2001, members signed a revision of the Treaty of Chaguaramas stating a long-term goal of starting a CARICOM Single Market and Economy (CSME). These eight countries are Antigua and Barbuda, Dominica, Grenada, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Anguilla, and Montserrat
        
        In 2004, the United States signed Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR) Textiles have been an important component of the trade deal, with negotiations focusing on encouraging trade.
    - - Integration in Asian
        
        Association of Southeast Asian Nation free trade Area
        
        Trading partner US, EU, China. Limited by conflict between member states
        
        ASEAN plus six (Japan, China, Korean, Australia, New Zealand, Indian) working towards an economic community
        
        The Association of Southeast Asian Nations (ASEAN) was established in 1967 as an organization for economic, political, social, and cultural cooperation among its member countries.
        The original member states - Indonesia, Malaysia, Philippines, Singapore, and Thailand. Over the next thirty-five years, Brunei Darussalam, Vietnam, Laos, Myanmar and Cambodia joined
        
        Asia- Pacific economic Cooperation
        
        APECC , founded in 1999, serves as a connecting group, encouraging dialogue between members
        
        APEC group currently has twenty-one member, all of them economies that border the Pacific Ocean. The list member, which account for 40% of the world's population, more than half of the global GDP and almost 44% of world trade
        
        Trans-Pacific strategic economic
        partnership agreement
        
        The United States government increasingly looks to Asia for exports and for growth markets to spur economic development.
        
        South Asian Association for Regional Cooperation
        
        South Asia in 1993 and have discussed a potential SAARC free trade area.
        
        Political conflicts between the countries in SAARC, particularly between India and Pakistan limit growth
      - Integration in the middle east and Africa
        
        Middle East
        
        The Greater Arab Free Trade Area (GAFTA), founded in 1997, now encompasses all seventeen members of the Arab League plus Algeria. The GFTA agreement calls for an eventual uniform tariff between members, sharing of standards, and an aggressive 40% reduction of tariffs.
        
        The Cooperation Council for the Arab States of the the Gulf founded in 1981, overlaps membership with the GAFATA and CAEU. The council focuses on many issues beyond trade and, to a lesser extent, economic integration
        
        Africa
        
        One success story is the West African Economic and Monetary Union, started in 1994
        
        The East African Community (EAC), which began in 1999 and includes five countries, has also achieved a degree of integration
        
        The Abuja Treaty, signed 1991, has the goal of establishing the African Economic Community, which includes almost every country on the continent
        
        African Currency Agreements: Central African Franc, West African Franc, West African Monetary Union
    - - Protectionism
        Refers to the desire to protect domestic business
        from the exports of foreign firms through governmental
        policy. Lobbying by the effective domestic companies
        often creates pressures on government to respond.
        
        GOVERNMENT POLICIES
        LIMITING TRADE
        
        A quota is a government-imposed trade restriction
        that limits the number or monetary value of goods that
        a country can import or export during a particular period.
        
        A subsidy Instead of limiting the ability of foreign companies to export to a market, some governments attempt to prop up local producers. A subsidy represents the payment of money to domestic businesses.
        
        Embargoes either prevent any goods from entering
        a country or prevent goods from being exported
        by a country. Embargoes exist for sensitive technology
        and materis, including those needed to build nuclear weapons.
        
        Governmental leaders can limit imports by requiring
        that businesses that wish to import goods purchase
        an import license.
        
        Tariffs, essentially a tax on imports, are the most
        common device. Tariffscan be product or country
        specific, and are designed to protect local industries.
        
        Other administrative barriers also slow the movement of goods (paperwork and administrative procedures, import permits,...)
        
        The final step a government may take to limit imports revolves
        around currency. Money earned in one country often needs to
        be exchanged for another country when it is transferred out of country.
        
        ARGUMENTS FOR PROTECTIONISM
        
        Protect national security: Protectionism may also be justified based on national security concerns. The trade in military goods, or dependency on other nations for resources associated with national defense, represents common justifications for barriers to trade.
        
        Earn revenue: Tariffs, administrative fees, and other trade barriers also earn revenues for governments. In cases of corrupt governments, these fees may go directly into the pockets of governmental officials.
        
        Respond local political and popular pressure: Often trade barriers result from local political and popular business owners with apprehensions about the potential loss pressure.
        
        Promote consumer safety: Trade barriers may be driven by concerns with consumer safety. Governments often ban or screen products that potentially could harm consumers.
        
        Protect local industry, especially infact industry:
        
        The goal of protecting local industries plays a prominent role in many governmental actions. In many countries, defending agriculture spurs protectionism of farm products.
        
        Infant industries merit protection. Governments may prevent competition from foreign firms until the local infant industry becomes mature enough to compete.
        
        Discourage immoral business practice: In many countries, citizens are hesitant to buy products from foreign companies that practice unfair and potentially unethical business practices.
        
        Protect the environment with sustainable practices (The opening of markets to low-priced products that create pollution, the fines for polluting are smaller than the cost of upgrading the production process, reducing any incentive to make a change,...)
        
        Protect culture (Trade potentially affects the cultural identity of countries. The importing of art, entertainment, music, and other similar items from Western countries shifts the culture of a least- or less-developed or a developing country.)
        
        THE FUTURE
        
        Arguments regarding free trade and protectionism
        are likely to continue. Its appears that many national
        leaders have concluded that regional trade associations
        are in their country's best national interest, as witnessed
        by the growth in membership in these organization.