What you should learn from chapter 2: The basis for the reestablishment of world trade following World War II, the importance of balance-of-payment fi gures to a country’s economy, the effects of protectionism on world trade, the several types of trade barriers, the provisions of the Omnibus Trade and Competitiveness Act,. | The Dynamic Environment of International Trade Chapter 2 Learning Objectives LO1 The basis for the reestablishment of world trade following World War II LO2 The importance of balance-of-payment figures to a country’s economy LO3 The effects of protectionism on world trade LO4 The several types of trade barriers LO5 The provisions of the Omnibus Trade and Competitiveness Act LO6 The importance of GATT and the World Trade Organization LO7 The emergence of the International Monetary Fund and the World Bank Group Trade Barriers Barriers to trade are one of the major issues confronting international marketers They can be tariff or non-tariff barriers Countries continue to use non-tariff barriers for a variety of reasons Tariff barriers have reduced considerably in recent years 3 Exhibit Top Ten 2011 . Trading Partners ($ billions, merchandise trade) Source: foreign-trade/top , 2012. World Trade and . Multinationals Dominance of . multinationals in the 1950s and 1960s Large investments by . companies in Europe and Latin America Concern in Latin America resulting in expropriation of direct . investments In Europe, there was strong public demand to limit foreign investment 5 Exhibit Sources of Distortion in Prominent Trade Statistics Sources: Andrew Batson, “Not Really ‘Made in China’,” The Wall Street Journal, December 16, 2010, pp. B1–2; “iPadded,” The Economist, January 12, 2012, p. 84. Exhibit The Nationality of the World’s 100 Largest Industrial Corporations (size measured by annual revenues) 2-7 Balance of Trade The balance of merchandise trade also reflected the changing role of the United States in world trade Between 1888 and 1971, the United States had a favorable balance of trade By 1971, the United States had a trade deficit of $2 billion that grew to at $160 billion in 1987 Trade deficit peaked in 2007, with the continued weakness in the . dollar The positive consequence of the global financial crisis in . | The Dynamic Environment of International Trade Chapter 2 Learning Objectives LO1 The basis for the reestablishment of world trade following World War II LO2 The importance of balance-of-payment figures to a country’s economy LO3 The effects of protectionism on world trade LO4 The several types of trade barriers LO5 The provisions of the Omnibus Trade and Competitiveness Act LO6 The importance of GATT and the World Trade Organization LO7 The emergence of the International Monetary Fund and the World Bank Group Trade Barriers Barriers to trade are one of the major issues confronting international marketers They can be tariff or non-tariff barriers Countries continue to use non-tariff barriers for a variety of reasons Tariff barriers have reduced considerably in recent years 3 Exhibit Top Ten 2011 . Trading Partners ($ billions, merchandise trade) Source: foreign-trade/top , 2012. World Trade and . Multinationals Dominance of . multinationals in the .
