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