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Chapter 3

COMMERCE 1B03 Chapter Notes - Chapter 3: North American Free Trade Agreement, Common External Tariff, International Monetary Fund

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Rita Cossa

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It’s common for nations to set restrictive standards that detail exactly how a product must be
sold in a country
Regulatory trade barriers include labelling, health, safety and emission standards
The General Agreement on Tariffs and Trade and the World Trade Organization
GATT an agreement that established an international forum for negotiating mutual reduction in
trade restrictions
WTO: the international organization that replaced the GATT, and was assigned the duty to
mediate trade disputes among nations
The International Monetary Fund and the World Bank
IMF: an international bank that makes short-term loans to countries experiencing problems with
their balance of trade
WB: An autonomous United Nations agency that borrows money from the more prosperous
countries and lends it to less developed countries to develop their infrastructure
Producers Cartels
Are organizations of commodity producing countries that are formed to stabilize or increase
prices to optimize overall profits in the long run
Common markets
Also called a trading bloc is a regional group of countries that have a common external tariff, no
tariff, and the coordination of laws to facilitate exchange among member countries.
The North American Free Trade Agreement
Created free trade area among Canada, the U.S and Mexico. Key objectives:
1. Eliminate trade barriers and facilitate cross border movement of goods and services
2. Promote conditions of fair competition in the free trade area
3. Increase investment opportunities in the territories of these 3 nations
4. Provide effective protection and enforcement of intellectual property right (i.e patent)
Continuing concern that NAFTA has resulted in a employment losses
The European Union
EU is a group of 87 member nations.
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