While revising the book, we asked many instructors for suggestions on how to improve the text, and we have listened. As a result, we now offer the following improvements:

• New Topics and Examples Added: to keep the 12^th Edition as current as ever, the authors have added coverage of the very latest happenings in international economics, such as:
• President Bush’s new tariffs on steel imports
• The Euro’s complete replacement of 12 separate national currencies
• The rise of electronic brokering and how it’s changing how foreign exchange markets work
• The latest happenings of the World Trade Organization, including the addition of China and Taiwan and new trade negotiations
• The Argentine financial crisis
• The IMF’s huge loan to Turkey

These content additions continue to make the text and course relevant for today’s students, and therefore motivate students to learn.

• International Financial Crisis Chapter Moved Up: the chapter on international financial crises, which had been at the end of the book, is now included in Part III. This placement emphasizes the links of these crises to international financial flows and exchange rate policies.

• New AS/AD Framework Appendix: A new appendix presents the aggregate demand-aggregate supply framework as an approach to open-economy macroeconomics. This provides flexibility for instructors who would like to include this approach in their course.
• Shaded Boxes Now Labeled by Type: the shaded boxes that contain material separate from the text are now broken into three categories—Focus on Labor, Case Studies, and Extension. This will make it easier for instructors and students to see what kind of material is in the box, and how it relates to what is presented within the text of the chapter.

• Chapters 5 and 6 Reversed: in response to instructor feedback, the order of Chapter 5 and Chapter 6 has been reversed from the 11th Edition. With this change all of the essentials of trade theories (productivity differences, factor endowments and factor proportions, product differentiation and monopolistic competition, oligopoly, and agglomeration based on external economies) are presented in consecutive chapters. The new Chapter 6 then can use these concepts and tools to examine issues of sectoral changes, trade, innovation, and growth.
• Key Strengths of Part II (Trade Policy) Enhanced: The discussion of nontariff barriers to trade in Chapter 8 has been sharpened. Chapter 10 now focuses completely on allegedly unfair trade (dumping and subsidies) and administered protection through antidumping and countervailing actions. A new box presents the examples of chicken, supercomputers and steel. In Chapter 12 the environmental effects of the Uruguay Round agreements as examined, adding strength to the book’s unique and powerful treatment of trade and environment. Enhancing this critical area of the text improves the entire book’s pedagogical value.
• The twelfth edition has a single chapter that examines international resource movements, focusing on multinational enterprises and labor migration. This is now in Part II of the book, because of its link to government policy issues, rather than at the end of the book as it was in the previous edition.
• Labor Issues Added: The book weaves discussion of labor issues into a number of chapters in Parts I and II. This topic is of great interest to students. The tour begins in Chapter 1, with a discussion of labor standards and conditions, issues prominent in the Seattle protests against the WTO and the ongoing protests against globalization. It continues through boxes that Focus on Labor in Chapters 3, 4, 6, and 9. Labor issues are also prominent in the discussion of the winners and losers from free trade in Chapters 4 and 5, trade adjustment assistance in Chapter 9, and labor migration in Chapter 14.
• Discussion of the Determinants of Exchange Rates now in a Single Chapter: Chapter 18 begins with an analysis of exchange rates in the short run, drawing on concepts like uncovered interest parity that were just presented in Chapter 17. Chapter 18 then examines exchange rates in the long run (purchasing power parity and the monetary approach) It concludes with a discussion of overshooting as a rather odd way that we may get from the short run to the long run. This revision is helpful because it streamlines the teaching approach of this material and falls in line with the way many of instructors already teach this material.