Chapter 9 vocabulary

common market

A ____ takes the integration one step further: it is a customs union that also removes restrictions on the free movement of money, labor, and factors of production. The European Union is a ____ and monetary union that functions at a high level of economic, legal, and political integration.

schedule of concessions

A country's tariff bindings are recorded in that country's _____ at the WTO. The schedules are legal commitments considered part of the GATT agreement itself.

tariff schedules

Bound rates are published in each country's _____, which are the detailed product-by-product listings of all tariffs for that country. ____ for the US are found in the Harmonized Tariff Schedule of the United States, available online from the United States International Trade Commission

modify or withdraw a concession

If a country later wishes to _____ and raise its bound rate on an item, it must negotiate directly with the countries most affected (those countries which are the major suppliers of that item) and by agreement reduce or offset tariffs on other items equal to an equivalent amount in trade

Dispute Settlement Body (WTO-DSB)

If no resolution from the trade consultation, the affected nation may request binding dispute resolution before the _____

withdrawal or suspension of a concession

If no settlement is reached or if the trade violation is not removed, the panel may recommend that the General Council authorize the ____ by the complaining party. This is the equivalent of a trade sanction.

International Monetary Fund World Bank United Nations International Trade Organization

In 1944, the Allied nations met at the Bretton Woods Conference in New Hampshire to create several important international economic and political institutions, including the ______, and the International Bank for Reconstruction and Development, also called the ______. The _____ was created at about the same time. In addition to these economic and political institutions, world leaders had a vision of another international organization dedicated to preventing the kinds of protectionism and rising tariffs seen in the 1930s. So, a third specialized organization, the ______, was planned to promote and stabilize world trade by reducing tariffs.

normal trade relations or NTR

In the US, the term "most favored nation" is now referred to as ______ because Congress considers it to more accurately describe the "normal" tariff treatment for most countries. The term "most favored nation" is still in use in international documents and in other countries.

tariffication

Nations must first "convert" their nontariff barriers to tariffs (through a process called _____) and then engage in negotiations to reduce the tariff rates

tariff-rate quota

Not really a quota at all, but a tariff rate that increases according to the quantity of goods imported.

multilateral trade negotiations

One of the cornerstones of the GATT system was a commitment by member countries to conduct _______, and on a regular basis, under the auspices of the GATT organization. Negotiating sessions are called "rounds."

trade preferences

The WTO agreements permit the granting of _____, or preferential tariff treatment, to developing countries to help further their social and economic developments. Most developed nations grant ____ to developing countries, not only in their own hemispheres but also around the world.

tariff bindings

The agreed tariff rates are known as _____ because the rates become bound, or capped, at that rate.

negotiating rounds negotiating rounds trade liberalization

The following is an overview of the most important ____ from 1947 to the present. Although the focus of each ____ was different, they all had the same goal of ______ - the process of reducing tariffs and removing artificial barriers and restrictions on trade 1. Geneva, Switzerland, 1947 2. Annecy, France, 1949 3. Torquay, England, 1951 4. Geneva, Switzerland, 1956 5. Geneva, (Dillon Round) 1960-1961 6. Geneva, (Kennedy Round) 1964-1967 7. Tokyo Round, 1973-1979 8. Uruguay Round, 1986-1994 9. Doha Development Round (a WTO round), 2001-present (as of 2016)

flat-rate tariffs

What kind of tariffs are fungible (crude oil, wheat, or standard size graded lumber) usually subject to?

ad valorem tariffs

What kind of tariffs are nonfungible goods (chairs, machinery, or specialize steel) usually subject to?

balance-of-payments or BOP

When a nation's outflow of foreign exchange exceeds receipts, a ____ deficit can arise. This can be due to normal inflows and outflows of foreign currencies and is usually never a problem.

most-favored-nation trading status

When one country grants _____ to another country, it is agreeing to accord items imported from that country the most favorable treatment or the lowest tariff rates that it gives to like products imported from other ____ trading nations. In US, this status is usually granted by an act of Congress.

Indirect nontariff barriers

While _____ may seem perfectly neutral and nondiscriminatory on their face, their effect is to discriminate against foreign-made products or firms. They may take the form of laws, regulations, or rules of administrative agencies that make it difficult or costly to import foreign-made goods or services

Direct nontariff barriers

____ specifically limit imports of goods or services or deny access of foreign firms to local markets. Examples are embargoes, quotas, complex and discriminatory import licensing schemes, and other prohibitions on trade. Most _____ are non permitted unless they fit into certain exceptions

global tariffs

_____ are imposed on a particular classification of goods without regard to the country of origin of the goods

zero quota

a complete ban on the import of a product in that it permits ZERO quantities to be imported

customs union

a free trade area with a common external tariff

competitive need limitation

a quantitative limit on imports from each beneficiary country called _____. However, these can be waived and are not applicable to "least developed" countries.

quota

a quantitative restriction on imports

ad valorem

a tariff calculated as a percentage of value

specific or flat tariffs

a tariff computed on the basis of phsyical units

tariff

a tax levied on goods by the country of importation

trade barrier

any impediment to trade in goods or services

Nontariff barriers

any impediment to trade other than tariffs

import trade barrier

any impediment, direct or indirect, to the entrance or sale of imported goods or services existing in the country of importation.

free trade area

consists of two or more countries that are party to a free trade agreement that reduces or eliminates tariffs on goods, removes trade barriers, and usually addresses other common concerns affecting trade between them

beneficiary developing countries

developing countries that are eligible for preferential treatment under the Generalized System of Preferences (GSP) are known as ______

tariff concession

each country's promise to reduce tariffs on imports of a given item in return for tariff concessions from other countries

Global quotas

imposed by an importing nation on a particular product regardless of its country of origin

bound rate

maximum tariff rate a country may charge on an item, although tariff rates may be reduced below the bound rate

auctioned quota

one in which a country sells the quota rights through bidding

allocated quota

one in which the total limit is "allocated" among several specific countries

Nondiscrimination

one of the basic rights of membership in the WTO--every WTO member country must treat the goods and services from all other WTO member countries equally. No playing "favorites"

global digital trade

refers to international transactions in which the goods, services, or information are DELIVERED online. (Internet search or social media)

global e-commerce

refers to online transactions for the cross-border sale of goods or services

transparency

refers to the degree to which a foreign government's import laws or regulations are made readily available to the public, including foreign firms.

Unconditional MFN trade

requires that if a nation negotiates a reduced tariff rate on a certain product imported from one WTO member, that rate of duty automatically becomes applicable to like products imported from any and all other WTO members

trade consultations

the first step in dealing with a potential nullification/impairment of a WTO member nation (pre-WTO dispute settlement)

trade liberalization

the process of reducing tariffs and removing artificial barriers and restrictions on trade

absolute quotas

those that strictly prohibit imports of an item above a predetermined limit, based either on the value or quantity of specific goods (weight, number of pieces, etc.), or as a percentage of the domestic market for that item

nullification or impairment

when one WTO member nation acts contrary to its commitments in a GATT/WTO agreement, such as raising a tariff above the bound rate or imposing an unjustified quota on imports. It may result in ______