Differentiate among the current account, balance of trade, and balance of payments.
Explain the role of price as a free market regulator.
“Theoretically, the market is an automatic, competitive, selfregulating mechanism which provides for the maximum consumer welfare and which best regulates the use of the factors of production.” Explain.
Interview several local businesspeople to determine their attitudes toward world trade. Further, learn if they buy or sell goods produced in foreign countries. Correlate the attitudes and report on your findings.
What is the role of profit in international trade? Does profit replace or complement the regulatory function of pricing? Discuss.
Why does the balance of payments always balance even though the balance of trade does not?
Enumerate the ways in which a nation can overcome an unfavorable balance of trade.
Support or refute each of the various arguments commonly used in support of tariffs.
France exports about 18 percent of its gross domestic product, while neighboring Belgium exports 46 percent. What areas of economic policy are likely to be affected by such variations in exports?
Does widespread unemployment change the economic logic of protectionism?
Review the economic effects of major trade imbalances such as those caused by petroleum imports.
Discuss the main provisions of the Omnibus Trade and Competitiveness Act of 1988.
The Tokyo Round of GATT emphasized the reduction of nontariff barriers. How does the Uruguay Round differ?
Discuss the impact of GATS, TRIMs, and TRIPs on global trade.
Discuss the evolution of world trade that led to the formation of the WTO.
Visit www.usitc.gov/taffairs.htm (U.S. Customs tariff schedule) and look up the import duties on leather footwear. You will find a difference in the duties on shoes of different value, material composition, and quantity. Using what you have learned in this chapter, explain the reasoning behind these differences. Do the same for frozen and/or concentrated orange juice.
The GATT has had a long and eventful history. Visit www.wto.org/wto/about/about.htm and write a short report on the various rounds of GATT. What were the key issues addressed in each round?
