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Outline - Trade The International Trade Regime (ITO, GATT, UNCTAD, GSP, WTO)

The document outlines key aspects of international trade, including the evolution of the international trade regime from the ITO and GATT to the WTO. It discusses benefits of trade, trade trends and metrics, major trade theories, barriers to trade, and services trade. Specifically, it notes that the average tariff has declined from 13% to 4% as world trade has increased from 10% to 38% of GDP. It also examines theories on why countries trade, including absolute advantage, comparative advantage, and factors related to production, demand, and distance.

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53 views2 pages

Outline - Trade The International Trade Regime (ITO, GATT, UNCTAD, GSP, WTO)

The document outlines key aspects of international trade, including the evolution of the international trade regime from the ITO and GATT to the WTO. It discusses benefits of trade, trade trends and metrics, major trade theories, barriers to trade, and services trade. Specifically, it notes that the average tariff has declined from 13% to 4% as world trade has increased from 10% to 38% of GDP. It also examines theories on why countries trade, including absolute advantage, comparative advantage, and factors related to production, demand, and distance.

Uploaded by

ctyre34
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Outline_Trade

The International Trade Regime (ITO, GATT, UNCTAD, GSP, WTO)


What is a Regime?
WTO regime: ITO, GATT, UNCTAD, GSP, WTO
Average tariff decline from 13% to 4%; increased ratio of trade:GDP 10% to 38%;
Rise of Regional Trade Agreements
Expansion of trade issues from tariffs to focus on specific issues (e.g. “trade costs”)

Benefits of Trade: Who, How


Who Benefits: consumers (variety, price, quality), companies (scale, profits),
countries (growth, employment)
Nexus of Trade and Growth (How Benefits Arise): competition, specialization, scale
Economies of Scale: equipment, fixed cost allocation, bargaining power, “learning
curve” (BCG)
BCG Experience Curve: costs decline with volume (efficiency, methods, technologies,
redesign)
Advantage: Absolute advantage (Adam Smith)
Comparative (opportunity cost) Advantage (David Ricardo)

Trade Trends & Metrics (size, growth, composition)


Trends: liberalization, growth & scope, multilateral to regional, share of developing
countries, non-trade issues, protectionism
Metrics: Global GDP, World Trade composition, size and growth (merchandise,
services), Trade/GDP ratio, Value v Volume, Trade in Value Added (TiVA)
Drivers of Trade Growth: economic growth, # of countries, agreements, value chain
fragmentation
Global Trade Slowdown 2011-2015: weak economic activity; protectionist measures;
fewer trade agreements; supply chain retrenchment; China substitution of domestic
inputs
Relative growth rates (GDP, Trade, FDI): FDI smallest but grows fastest

US Trade Position
Share of US GDP (27%): Exports, Imports, Deficit (2.7% of GDP)
US surplus in Services (40% of US trade)
Balance of Payments: Current Account + Capital Account (cash inflows)
Mirror Image
Current Account Deficits: Causes & Effects

Trade Theories: Who Trades What, With Whom and Why?


Who Trades with Whom? Intra-regional trade; N/N and S/S; related-party trade
Tinbergen Gravity Model (size & distance): large companies and neighbors trade
more
Heckscher-Olin (production factors)
Overlapping demand (Stefan Linder)
Non-cost factors: tastes, design, quality, support, brands
Major Trading Partners (“path dependency”)
CAGE: “distance” (Pankaj Ghemawat)
Product Life-Cycle (Raymond Vernon)
Global v regional
N-S/S-S

Services Internationalization
Composition of Services (Transport, Travel, Other)
Services %: of GDP, Trade, FDI
Services via Trade or FDI?
Services Attributes (intangible, simultaneous, interactive, perishable)
Services Trade-ability (delivery, quality)
International Services Supply Modes: cross-border, foreign consumption,
commercial presence, physical presence
Services regulations & protections

Barriers to Trade: Kinds, Why, Impacts


Why Barriers? Distributive impact, politics, security, infant industries, nostalgia,
retaliation
Kinds of Barriers: tariffs, quotas, qualitative, administrative, restraints, subsidies,
bans, anti-dumping, sanctions
Economic Effects of Tariffs: prices increase, productivity declines, regressive impact
on low-income sectors, workarounds, domestic producers, decreased exports,
retaliation, government revenue, jobs (Chinese tires)
Dumping: what, why, responses
Subsidies and trade distortion

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