Professional Documents
Culture Documents
TRENDS
INTRODUCTION
1960s
Jet passenger aircraft
500-700mph.
GAAT
(GENERAL AGREEMENT ON
TARIFFS & TRADE)
General Agreement on Tariffs and Trade (GATT)
originated after World War II (1939-1945) as a charter for
the International Trade Organization (ITO), a proposed
specialized agency of the United Nations. GATT was
signed by 23 nations at a trade conference in 1947 and
became effective in January 1948. Although the ITO
failed to win ratification by the United States Congress in
1950 and never came into being, the GATT remained in
use to govern international trade. It is a treaty among
international trade organization in existence from 1948 to
1995.
W.T.O.
(WORLD TRADE ORGANIZATION)
W.T.O.
The World Trade Organization (WTO) is the only global
international organization dealing with the rules of trade
between nations. Its main function is to ensure that trade
flows as smoothly, predictably and freely as possible. . At
its heart are the WTO agreements, negotiated and signed
by the bulk of the world’s trading nations and ratified in their
parliaments. The goal is to help producers of goods and
services, exporters, and importers conduct their business.
It’s an organization for liberalizing trade. It’s a forum for
governments to negotiate trade agreements. It’s a place for
them to settle trade disputes. It operates a system of trade
rules.
Role of W.T.O.
It’s a negotiating forum - The WTO is a place where member governments go, to
try to sort out the trade problems they face with each other. The first step is to talk.
The WTO was born out of negotiations, and everything the WTO does is the result of
negotiations.
It’s a set of rules - At its heart are the WTO agreements, negotiated and signed by
the bulk of the world’s trading nations. These documents provide the legal ground-
rules for international commerce. They are essentially contracts, binding
governments to keep their trade policies within agreed limits.
10
Principles of Trading System
• Freer trade: gradually, through
negotiation
11
World Trade Organization: Rounds
Rounds of GATT
Multilateral Trade Negotiations
No. Years Name Accomplishments
1-5 1947-61 Reduced tariffs
6 1964-67 Kennedy Tariffs + anti-dumping
7 1973-79 Tokyo Tariffs + NTBs
8 1986-94 Uruguay Tariffs, NTBs, Services, Intellectual Property,
Textiles, Ag., Dispute Settlement, Created
WTO
9 2001-? Doha ? (Doha Development Agenda)
Foreign Direct Investment (FDI) is defined as
"investment made to acquire lasting interest in enterprises
operating outside of the economy of the investor."
Persistent wage
differentials across Country Hourly Cost
countries exist. This
is one on the main Germany $27.37
reasons MNCs are Japan $21.38
making substantial France/U.S. $17.10
FDIs in less Israel $9.06
developed nations.
Taiwan $5.47
Mexico $2.57
Intangible Assets
• U.S. firms develop new products in the developed world for the
domestic market, and then markets expand overseas.
• FDI takes place when product maturity hits and cost becomes an
increasingly important consideration for the MNC.
Product Life Cycle
The U.S.
Quantity
production exports
imports
ptio n
ns u m
co
n
p tio
su m
con
imports
production