EECS 1520 Lecture Notes - Lecture 20: Outsourcing
21 Jun 2018
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EECS 1520 Lecture 20 Notes
Introduction
Other Trade Agreements
The other new members of the European Union continue to use their own currencies,
yet they could adopt the euro in the future after meeting specified guidelines (with
regard to budget deficits) and other financial conditions.
Nevertheless, their admission into the EU is relevant because restrictions on their trade
with Western Europe are thus reduced.
Because wages in these countries are substantially lower than in Western European
countries, many MNCs have established manufacturing plants there to produce goods
for export to Western Europe.
In June 2003, the United States and Chile signed a free trade agreement to remove
tariffs on products traded between the two countries.
In 2006, the Central American Trade Agreement (CAFTA) was implemented
This pact allowed for lower tariffs and regulations among the United States, the
Dominican Republic, and four Central American countries.
In addition, there is an pending initiative for Caribbean nations to create a single market
featuring free flow of trade, capital, and workers across countries.
The United States has also established trade agreements with many other countries,
including Singapore (2004), Morocco (2006), Oman (2006), Peru (2007), and Bahrain
(2010).
Yet because of the weak global economy in the period 2008–2011, momentum for trade
agreements subsided as some governments became more concerned about protecting
their own country’s companies and local jobs.
Impact of Outsourcing on Trade
The term outsourcing refers to the process of subcontracting to a third party.
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Document Summary
The other new members of the european union continue to use their own currencies, yet they could adopt the euro in the future after meeting specified guidelines (with regard to budget deficits) and other financial conditions. The united states has also established trade agreements with many other countries, including singapore (2004), morocco (2006), oman (2006), peru (2007), and bahrain (2010). The term outsourcing refers to the process of subcontracting to a third party. Other new members of the european union continue to use their own currencies, yet they could adopt the euro in the future after meeting specified guidelines (with regard to budget deficits) and other financial conditions. Nevertheless, their admission into the eu is relevant because restrictions on their trade with western europe are thus reduced. Because wages in these countries are substantially lower than in western european countries, many mncs have established manufacturing plants there to produce goods for export to western europe.
