MGT8 SCRIPT

SLIDE 4

General Agreement on Tariffs and Trade, an international treaty (1948–94) to

promote trade and economic development by reducing tariffs and other
restrictions. It was superseded by the establishment of the World Trade
Organization in 1995.

treaty in which two or more nations grant equally advantageous trade

concessions to each other.

It exists when two or more countries agree on terms that help them trade with
each other.
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The Most Favored Nation (MFN) is a status or level of treatment granted by one nation to another
with regard to global trade. The World Trade Organization’s 164 members commit to treating other
members equally, so they can all gain from each other’s lowest tariffs, highest import quotas and
lesser trade barriers for commodities and services. This rule of non-discrimination is termed as the
most favoured nation (MFN) treatment. There are a few exceptions, such as when members strike
bilateral trade deals or when members provide developing nations with special entry to their
markets.

Dispute settlement:

 is an objective and effective means of settling disagreements between States or between

investors and States on government measures/practices;
 prevents unilateral actions and the escalation of diplomatic tensions, and contributes
overall to peaceful international relations, and;

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A bilateral trade agreement confers favored trading status between two

nations. By giving them access to each other's markets, it increases trade and
economic growth. The terms of the agreement standardize business
operations and level the playing field.

Bilateral agreements increase trade between the two countries. They open
markets to successful industries. As companies benefit, they add jobs.

The country's consumers also benefit from lower costs. They can get exotic
fruits and vegetables that can become too expensive without the agreement.
Any trade agreement will cause less-successful companies to go out of
business. They can't compete with a more powerful industry in the foreign
country. When protective tariffs are removed, they lose their price advantage.
As they go out of business, workers lose jobs.

Regional trade agreements (RTAs) are treaties among two or

more governments that agree to offer more favorable treatment
to trade between themselves than they do to goods imported
from outside the region. This preferential treatment usually
takes the form of the removal or reduction of tariffs on imports
from regional partners, thereby creating a free trade area. RTAs
are typically classified in a hierarchy that ranges from this most
basic form, the free trade area, to customs union, to common
market, and ultimately to economic union. A customs union
goes beyond the removal of internal tariffs that occurs within a
free trade area to specify common tariffs that all member states
impose on imports from outside the region. Common markets
are customs unions that also remove barriers to the flow of
factors—capital and labor—within the region. Finally, economic
unions are common markets that also adopt a common
currency.
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refers to a great extent to the location of firms, and integrates the social
dimension of economic mechanisms
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allowing consumers access to more goods at a lower price than would
have been possible without integration.
even though the nonmember companies might be more efficient in the
absence of trade barriers. It means that higher cost suppliers replace lower
cost external suppliers within the free trade area.
Slide 18

The Schengen Area is an area comprising 27 European countries that have officially
abolished all passport and all other types of border control at their mutual borders.