1、Chapter 1International TradeChapter 1International TradeIn this chapter, well cover:Reasons and Effects of International TradeDevelopment of International Trade TheoriesBenefits of Free TradeTrade BarriersArguments for Trade ProtectionGATT and WTOIn this chapter, well cover:RInternational TradeDefin

2、ition: the purchase, sale or exchange of goods and services across national borders Increases the number of goods that domestic consumers can choose fromDecreases the cost of those goods through increased competitionAllows domestic industries to ship their products abroad. International TradeDefinit

3、ion:世界經(jīng)濟概論(英文版)chapter-01-International-Trade課件世界經(jīng)濟概論(英文版)chapter-01-International-Trade課件Reasons and EffectsComparative advantage e.g.chartered accountant or painter?Opportunity costNote: absolute advantageReasons and EffectsComparativeReasons and EffectsAn economys annual GDP: C+I+G+(X-M)Trade sur

4、plus and trade deficitExports and imports Exchange rate: appreciation and depreciation competitive devaluationReasons and EffectsAn economyDevelopment of International Trade TheoriesMercantilismAbsolute advantageComparative advantageFactor endowmentsInternational product life cycleNew trade and nati

5、onal competitive advantageDevelopment of International TDevelopment of International Trade TheoriesGovernment intervention: tariffAdam Smith: absolute advantage “the invisible hand”David Ricardo: comparative advantageDevelopment of International TDevelopment of International Trade TheoriesH-O model:

6、 factors of productionRaymond Vernon: International product life cycle theoryThe late 1970s and early 1980s: New trade theoryDevelopment of International TBenefits of Free TradePromotes competition and deters monopolyIncreased variety of goods and services available to consumersFree trade has led to

7、 prosperity and growth and that protectionism has had the opposite effectsBenefits of Free TradePromotesTrade BarriersTariffs: specific Tariffs and Ad Valorem Tariffs revenue tariff protective tariffnon-tariff barrier (NTB):licenses and quotas Quota: import and export quotaVoluntary export restraint

8、 (VER)StandardsSubsidyTrade BarriersTariffs: specifiArguments for Trade ProtectionNational security argument：self-sufficiencyIncreased domestic employment argument: Job creation from imports Fallacy of composition Possibility of retaliation Long-run feedbacksArguments for Trade ProtectionArguments f

9、or Trade ProtectionDiversification for Stability ArgumentInfant-industry argumentProtection against dumping argumentCheap foreign labor argumentThe retaliation argumentArguments for Trade ProtectionGATT and WTOGATT: General Agreement on Tariffs 1947Three principles: 1. equal, non-discriminatory trad

10、e treatment for all member nations; 2. the reduction of tariffs by multilateral negotiation; 3.the elimination of import quotas.GATT and WTOGATT: General AgreGATT and WTOWTO: World Trade OrganizationSix key objectives: (1) to set and enforce rules for international trade (2) to provide a forum for n

11、egotiating and monitoring further trade liberalization (3) to resolve trade disputesGATT and WTOWTO: World Trade OGATT and WTO(4) to increase the transparency of decision-making processes, (5) to cooperate with other major international economic institutions involved in global economic management, (

12、6) to help developing countries benefit fully from the global trading systemGATT and WTO(4) to increase thGATT and WTOThree purposes of WTO rules1.Protect the interests of small and weak countries against discriminatory trade practices of large and powerful countriesGATT and WTOThree purposes of GAT

13、T and WTO 2. require members to limit trade only through tariffs and to provide market access not less favourable than that specified in their schedules 3. designed to help governments resist lobbying efforts by domestic interest groups seeking special favoursGATT and WTO 2. require memberStudy Ques

14、tionsStudy QuestionsStudy Questions1.Why do nations engage in international trade?2.How does a countrys international trade affect its exchange rate?3.What are some of the important theories of international trade?Study Questions1.Why do natioStudy Questions4.What happened to world trade in the 1930s? Why did it happen?5.W