Tariffs, Quotas, and Embargos
most common types of trade barriers
quota and tariff
To insure fair trade...
rules were added to NAFTA to make sure that people in the people in the three countries could trade fairly with each other
example of trade barrier
some US clothes makers have had to change jobs in the last 30 years because many clothes are now imported from other countries
complaint about trade
some people say that too much trade with other countries causes this
quota
specific limit placed on the number of imports that may enter a country
tariff
tax on imports
US Embargo on Cuba
the US government put pressure on Cuba to change from a communist country to a democratic one
exchange rate system
this allows countries to swap currencies
one reason for higher standard of living
trade allows people in the US to buy clothing at lower prices
market transitions
trade and voluntary exchange occur when buyers and sellers freely engage in this
What did NAFTA do:
It took away all tariffs on goods traded between these countries
Why did some people fear NAFTA?
Many believed that companies would move their factories to Mexico because labor costs were lower there; others thought there would be an increase in air and water pollution in Mexico and the Southwest
What NAFTA stands for:
North American Free Trade Agreement
Trade
The voluntary exchange of goods and services among people and countries
Who signed NAFTA and when?
US, Canada, and Mexico in 1994
embargo
a government order stopping trade with another country; another kind of trade barrier
voluntary trade
both parties benefit and are better off than they were before the trade
trade barriers
counties sometimes try to limit trade by creating these
imports
goods purchased from other countries
exports
goods sold to other countries
what would increase the standard of living
leaders said that taking away tariffs, trade among the countries would increase which would increase the standard of living