UNIT 27_ INTERNATIONAL TRADE

Key Takeaways

 Free trade( tự do thương mại) means imports and exports of goods and services
without any government restrictions (no tariffs( hàng rào thuế quan): no taxes or
imports, no quotas( hạn ngạch, giới hạn số lượng đc nhập khẩu) ,or no subsidies:
(trợ cấp từ chính phủ)
 WTO (World Trade Organization) highly contributed to the development of free
trade.
 Free trade is the opposite of protectionism ( chủ nghĩa bảo hộ), a defensive trade
policy intended to eliminate the possibility of foreign competition (restricting imports
by trade barriers).
 Examples of trade barriers: tariffs, quotas, embargoes: lệnh cấm vận (stop trading
with another country), subsidies to domestic industry, licenses to import goods

 Examples of free trade agreement:

o NAFTA (North American Free Trade Agreement)- the goal was to eliminate
barriers to trade and investment between the United States, Canada and Mexico.
o EVFTA (European Union–Vietnam Free Trade Agreement): a free trade
agreement between the European Union and the Socialist Republic of Vietnam.
o

An infant industry is one that is in early stage of development and which

cannot survive competition from foreign companies.
A strategic industry is one that is particularly important to a country’s
economy.
Protectionism means restricting imports by ways of trade bariers such as tariffs and
quotas.
Trade Barriers are government policies or regulations that restrict international trades.
A tariff is a tax charged on imports.
A quota is a maximum quantity of goods of a specific kind that can be imported into a
country.

What are the benefits and … of free trade? Us- consumers

PROS & CONS of FREE TRADE
PROS CONS
stimulates economic growth (more Threats to domestic industries (local
competion, prevent monopolies: tránh độc producers) 
quyền) It reduces local revenues of small/ weak
businesses.
helps consumers: higher quality goods and Difficult establishment of new industries
services, cheaper/competitive price, and developing
greater variety of products
increases foreign investment. Reduced tax revenue for the government
Promotes cooperative relationship Unfair competition (dumping: bán phá
 It encourages technology transfer giá)
 reduces possibility of war
Increased job opportunities Risks of losing domestic jobs (outsourcing
manufacturing jobs to other countries with
cheaper labour wages)