MGCR 382 Lecture Notes - Asia-Pacific Economic Cooperation, Maastricht Treaty, Most Favoured Nation

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Published on 20 Apr 2013
School
McGill University
Department
Management Core
Course
MGCR 382
Professor
chapter 10 international cooperation among nations
2/17/2013 7:08:00 AM
General agreements on Tariff and Trade( GATT)
Rules: sponsoring multilateral negotiations to
reduce tariff,quotas and other non-tariff
barriers.
o Most favored nation (MFN) principleany
preferential trantment granted to one
country must be extended to all
countries.
2 exceptions:
1. General system of
preferences(GSP) : reduced rate to
developing countries
2. For comprehensive trade
agreement that promote economic
integration, such as EU and NAFTA.
The world trade orga( WTO)1995 switzerland
3 goals:
promote trade flows by encouraging nations
to adopt nondiscriminatory, predictable trade
policies
reduce remaining trade barriers
establish impartial procedures for resoulving
trade disputes among members.
Principles:
Without discrimination, freer, predictable, more
competitive, and beneficial for less developed
countries
Difference bet WTO and GATT:
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1. GATT---promote trade in goods, WTO is
much broader, trade in goods, in services,
international intellectual property protection,
and trade-related investmet
2. WTO enforcement power are stronger
challenges:
the general agreement of trade in
services(GATS)reducing barriers to trade in
services
agreement on trade related aspects of
intellectual property rights( TRIPS)
trade related investment measures
agreement(TRIMS)
o affects:
o trade-balancing rules: countries may not
require foerigh investors to limit their
imports of inputs to an amount equal to
their exports of local production
o foreign-exchange access: countries may
not affect foreign investors’ access to
foreign exchange
o domestic sales requirements: countries
may not require the investor to sell a
percentage of a factory’s output in the
local market
enforcement of WTO decisions
Regional economic integration:
FORMS:
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1. free trade area : encourage trade among its
members by eliminating trade barriers among
them, eg NAFTA
trade deflection: nonmembers deflect their exports
to the member nation with the lowest external
trade barriers.
2. customs union: combines the elimination of
internal trade barriers among its members with the
adoption of common external policies toward
nonmember, eg zollverein (Germany), Mercosur
Accord ( Brazil,Argentina..)
avoid trade deflection
3. common market: eliminating barriers that
inhibit the movement of factors of production
labor, capital, and technologyamong its
members. Eg eu
4. economic union: full integration
requires its members to coordinate their economic
policies in order to blend their economies into a
single entity. Eg. Euro
5. political union: complete political and
economic intergration
eg . i13 separate colonies operating into a new
country, us
IMPACTS:
Firms lower production and distribution cost
Expand customer base within the trading bloc
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Document Summary

Rules: sponsoring multilateral negotiations to reduce tariff,quotas and other non-tariff barriers: most favored nation (mfn) principle any preferential trantment granted to one country must be extended to all countries. General system of preferences(gsp) : reduced rate to developing countries. For comprehensive trade agreement that promote economic integration, such as eu and nafta. Promote trade flows by encouraging nations to adopt nondiscriminatory, predictable trade policies. Establish impartial procedures for resoulving trade disputes among members. Without discrimination, freer, predictable, more competitive, and beneficial for less developed countries. Gatt---promote trade in goods, wto is much broader, trade in goods, in services, international intellectual property protection, and trade-related investmet. The general agreement of trade in services(gats) reducing barriers to trade in services. Agreement on trade related aspects of intellectual property rights( trips) Avoid trade deflection: common market: eliminating barriers that inhibit the movement of factors of production labor, capital, and technology among its members.

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