EECS 1520 Lecture Notes - Lecture 19: General Agreement On Tariffs And Trade, North American Free Trade Agreement
21 Jun 2018
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EECS 1520 Lecture 19 Notes
Introduction
Cost of labour
Given the low cost of labor in Mexico, some U.S. firms have lost some of their market
share.
These effects are most pronounced in labor-intensive industries, such as clothing.
GATT Within a month of the NAFTA accord, the momentum for free trade continued
with a General Agreement on Tariffs and Trade (GATT) accord.
This particular agreement was the conclusion of the so-called Uruguay round of trade
negotiations that had begun seven years earlier.
It called for the reduction or elimination of trade restrictions on specified imported
goods over a ten-year period across 117 countries.
This accord has generated more international business for firms that had been unable to
penetrate foreign markets because of trade restrictions.
Inception of the Euro In 1999, several European countries adopted the euro as their
currency for business transactions among these countries.
The euro was phased in as a currency for other transactions during 2001 and completely
replaced the currencies of participating countries on January 1, 2002.
Hence only the euro is used for transactions in these countries, and firms (including
European subsidiaries of U.S.-based MNCs) no longer face the costs and risks associated
with converting one currency to another.
This single-currency system, which applies in most of Western Europe, has led to more
trade among European countries.
Expansion of the European Union In 2004, the European Union (EU) was expanded to
include Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland,
Slovakia, and Slovenia
These countries were followed by Bulgaria and Romania in 2007.
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Document Summary
Given the low cost of labor in mexico, some u. s. firms have lost some of their market share. These effects are most pronounced in labor-intensive industries, such as clothing. This single-currency system, which applies in most of western europe, has led to more trade among european countries. Expansion of the european union in 2004, the european union (eu) was expanded to include cyprus, the czech republic, estonia, hungary, latvia, lithuania, malta, poland, These countries were followed by bulgaria and romania in 2007. Slovenia adopted the euro as its currency in 2007, cyprus and malta adopted it as their currency in 2008, and estonia adopted it in 2011. Effects are most pronounced in labor-intensive industries, such as clothing. Gatt within a month of the nafta accord, the momentum for free trade continued with a general agreement on tariffs and trade (gatt) accord.
