Slide 17A
Breaking Down Barriers
Lesson 17
Slide 17B
What Does That Mean?
Term
Definition
General Agreement on
Tariffs and Trade
GATT; 1947 multilateral agreement eliminating preWorld War II protectionist business and trade practices.
World Trade
Organization
WTO; organization that supervises and promotes free
international trade between member nations.
free trade
the unrestricted importing and exporting of goods
between nations.
Free Trade Agreement
FTA; when two or more nations agree on the terms of
trade between them, committing to reduce or eliminate
trade barriers.
Slide 17C
What Does That Mean?
Term
Definition
bilateral
agreement
an index that includes all of the stocks listed on the NASDAQ.
multilateral
agreement
an agreement between more than two parties.
barriers to trade
government-imposed restraint on the flow of international
goods or services which includes tariffs, quotas, licenses, and
local content requirements.
Slide 17D
What Does That Mean?
Term
Definition
Office of the U.S. Trade
Representative
USTR; a division of the executive branch that develops U.S.
international trade and conducts oversees trade negotiations
with other countries.
International Trade
Administration
ITA; a division of the Department of Commerce that
promotes and advocates for U.S. exports, and enforces U.S.
trade laws and agreements.
Regional Trade
Agreement
RTA; a bilateral or multilateral trade agreement within a
particular global region.
North American Free
Trade Agreement
NAFTA; a trilateral RTA formed in 1992 between the U.S.,
Canada, and Mexico.
Slide 17E
What Does That Mean?
Term
Definition
Association of Southeast
Asian Nations
ASEAN; a multilateral RTA among ten southeast Asian
nations promoting trade, economic growth, and social
progress.
Transatlantic Trade and
Investment Partnership
TTIP; a proposed free trade agreement between the EU and
the US.
Trans-Pacific Partnership
TPP; a proposed RTA that includes 12 nations throughout
the Asia-Pacific region.
trade bloc
a combination of countries in an RTA.
Slide 17F
Lesson 16 Objectives
 Trace the evolution of free trade from GATT
to the World Trade Organization.
 Describe the benefits of global free trade.
 List four common barriers to global free
trade.
 Summarize seven major active and proposed
regional trade agreements.
 List the goals and principles of the WTO.
Slide 17G
Goodbye GATT. Hello WTO.
 GATT formed in 1947; outdated by 1995
 World Trade Organization (WTO)
succeeds GATT
 Sets the bar for basic rules and terms of
free and fair trade; members may improve
upon but may not fall upon basic terms
 Most nations are members of the WTO
Slide 17H
Free Trade: Benefits and Barriers
 Benefits: better cheaper goods,
economic growth, innovation,
employment and higher wages, reduced
hostilities
 Barriers: tariff, licensing requirements,
quotas, local content requirements
Slide 17I
Free Trade Agreements
 FTAs are directly negotiated between
two or more countries
 FTA’s expedite and enhanced free trade
 Doha Round is WTO negotiation
started in 2001- slow process
 USTR and ITA negotiate and
administer U.S trade agreements
Slide 17J
Regional Trade Agreements
 NAFTA
 ASEAN
 EU
 GCC
 MERCOSUR
Slide 17K
RTAs coming soon...or not.
 TTP: Trans- Pacific Partnership
 TTIP: Transatlantic Trade and
Investment Partnership
Both the TTP and TTIP are
controversial and face uphill battles to
approval. Criticisms center around
environment intellectual property and
power struggle issues.
Slide 17L
The Big Picture
There are many benefits to free trade, including better,
cheaper goods, economic growth, increased innovation, and
a reduction of hostilities between trading partners. Barriers
to trade are tactics which are protectionist in nature, such as
tariffs, licenses, and quotas. The WTO multination
agreement provides a basic level of free and unrestricted
trade. Many countries and economic units negotiate FTAs
to expedite and enhance free trade. RTAs are multilateral
trade agreements within a particular global region. Two
proposed, controversial, and potentially powerful RTAs are
TTIP and TPP. To be financially literate in the 21st century,
you should know about the benefits of free trade, and about
the agreements and organizations that shape global trade.