Foreign+Trade


 * Foreign Trade

​​Brief History** []
 * Nations used to try to have isolationist policies, and created physical barriers to trade
 * The United States followed a foreign policy of isolationism throughout most of its history. The Monroe Doctrine reaffirmed America's inattention to Europe's problems, but warned European nations to stay out of Latin America.
 * In the wake of World War I, President Woodrow Wilson urged the United States to join the League of Nations; the Senate refused to ratify the treaty, indicating the country was not ready to abandon isolationism.
 * Since the Great Depression of the 1930s and World War II, the country generally has sought to reduce trade barriers and coordinate the world economic system.
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 * Today, the international economy is one of interdependency-mutual dependency, in which the actions of nations reverberate and affect one another’s economic lifelines
 * The health of America’s economy depends heavily on other countries
 * Over the past decade, U.S. exports accounted for about a quarter of the economic growth.
 * International Monetary Fund-cooperative international agency of 185 countries to stabilize the exchange of currencies and the world economy
 * International trade has increased significantly since World War II
 * **Tariff **-a special tax added to imported goods to raise the price, thereby protecting American businesses and workers from foreign competition
 * Protects American businesses and workers from foreign competition
 * Nontariff barriers-quotas, subsidies, and quality specifications limit importation
 * United States places quotas on the amount of steel that can be imported-saves American jobs but also raises price of steel and automobiles Americans buy, and also raising the cost of producing other products, costing jobs in the process

> ​​ > **Balance of Trade** [] []
 * Legislative, executive, and judicial policymaking actions **
 * In 1992, President Bush signed the North American Free Trade Agreement (NAFTA) with Canada and Mexico, which would eventually eliminate most tariffs among North American countries
 * [|**VIDEO on the NAFTA**]
 * In 1993 Clinton obtained congressional passage of the legislation implementing the agreement
 * In 1994, Clinton submitted another agreement to Congress-General Agreement on Tariffs and Trade (GATT). 117 countries agreed to
 * <span style="color: black; font-family: 'Arial','sans-serif'; font-size: 10pt; line-height: 115%;">Reduce tariffs
 * <span style="color: black; font-family: 'Arial','sans-serif'; font-size: 10pt; line-height: 115%;">Eliminate certain nontariff barriers and subsidies
 * <span style="color: black; font-family: 'Arial','sans-serif'; font-size: 10pt; line-height: 115%;">Broaden GATT principles to areas such as trade in services, investment, and intellectual property rights
 * <span style="color: black; font-family: 'Arial','sans-serif'; font-size: 10pt; line-height: 115%;">Apply more effective discipline to agricultural trade
 * <span style="color: black; font-family: 'Arial','sans-serif'; font-size: 10pt; line-height: 115%;">Includes charter to create World Trade Organization
 * <span style="color: black; font-family: 'Arial','sans-serif'; font-size: 10pt; line-height: 115%;">Congress passed the legislation necessary to implement the agreement
 * <span style="color: black; font-family: 'Arial','sans-serif'; font-size: 10pt; line-height: 115%;">2005-Congress approved the Central American-Dominican Republic Free Trade Agreement-lowered tariff barriers to American goods in a number of Central American countries and the Dominican Republic
 * <span style="color: black; font-family: 'Arial','sans-serif'; font-size: 10pt; line-height: 115%;">United States Court of International Trade-hears cases involving international trade in both America and foreign countries
 * 9 judges
 * jurisdiction expanded by Court Customs Act of 1980
 * they have subject matter jurisdiction in civil action lawsuits brought by U.S. under laws governing import transactions, counterclaims, cross-claims, and third party claims relating to actions pending in the court
 * [[image:http://antiwto.jinbo.net/weekly/maynews/data/organ/files/20041109171604/nafta.gif align="center"]]
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 * Foreign products are not free: buying imports costs money
 * ​When an oil tanker arrives in Houston, dollars travel to Saudi Arabia

**Balance of Trade = the ratio of what is paid for imports to what is earned from exports.**


 * When more is imported than exported, there is a balance of trade deficit
 * The deficit for the balance of trade in 2005 was **$726 billion**
 * This has decreased the U.S. dollar's buying power, but it also makes American products cheaper abroad - increasing our exports.
 * Since the late 1980s, the US has experienced an export boom, reaching nearly $1.3 trillion in 2005.
 * A poor balance of trade also exacerbates unemployment - 5% of all civilian jobs in the US are related to exports.
 * Lately, many companies are exporting jobs for cheap labor overseas

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 * Energy**
 * **The Organization of Petroleum Exporting Countries OPEC** controls the price of oil and the amount of oil its members produce and sell to other nations.
 * The 1973 embargo convincingly illustrated the growing inderdependency of world politics.
 * America imports more than 60 percent of its annual consumption of oil from other countries.
 * America's decision to respond to Iraq's invasion of Kuwait in 1990 was based in large part on this dependence.
 * The U.S. dependence on foreign oil is growing every year.
 * Circumstances may again restrict the availability of oil, and the US remains vulnerable because of its depedence on foreign oil.

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 * Foreign Aid**
 * Presidents of each party have pressed for aid to nations in the developing world.
 * humanitarian concern
 * wanting to stabilize nations that are friendly to the US or that possess supplies of vital resources
 * the most common forms of aid are grants, credits, loan guarantees, and preferential trade agreements
 * A substancial form of foreign aid is in the form of military assistance and is targeted to a few countries strategic to the US
 * Israel, Egypt, Greece, and Turkey have received the bulk of such assitance
 * Aid programs have also helped with agricultural modernization, irrigation, and population control that susidizes the sale of American agricultural products to poor countries (this is also a boost for the economy).
 * Peace Corp volunteers have fanned out across the globe to provide medical care and other services in less developed nations.


 * The US is the largest donor of foreign aid, but it ranks lower than almost all other industrialized nations in the percentage of its GDP is spends on foreign economic aid. However, American private giving is a very substantial factor.

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BIBLIOGRAPHY:

The Textbook! [] [] [] [] [] []