09/09/15
Lesson 3-WTO, free trade & protectionism
Learning Objective: I can describe the objectives and functions of the WTO.
DA: Using your WTO HW, list three functions of the WTO.
The World Trade Organization
DA: Using your WTO HW, list three functions of the WTO.
The World Trade Organization
- Sets rules for global trading and resolves disputes between its member countries.
- Since it's creation in 1947, world tariffs for manufactured goods have declined from 40 to 4%.
Agenda of the WTO negotiations:
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TWO MAJOR CONCERNS
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Free Trade and Protectionism Goods and services are allowed to move freely between countries without barriers imposed by governments/international organizations. Arguments for protectionism...
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Read the article below and answer the questions:
To protect product standards
To raise government revenue- Developing countries tax collection is poor so protection policies supplement.
To correct a balance of payments deficit- Only works in the short run. Often countered with more protectionism from other countries.
Arguments against protectionism:
Activity/HW: Find an article which is pro or anti free trade and summarize (connect one of the concepts above to the article for full credit).
- Impose safety, health, or environmental standards on goods imported into its domestic market in order to ensure imports match the standards of domestic products.
- Developing countries are at a disadvantage due to the cost of getting approval/documentation to prove that the standards have been met. WTO, World Health Organization, World Bank, World Organization for Animal Health, Food/Agricultural Organization has established a Standards and Trade Development Facility. This program is designed to assist developing countries.
To raise government revenue- Developing countries tax collection is poor so protection policies supplement.
To correct a balance of payments deficit- Only works in the short run. Often countered with more protectionism from other countries.
Arguments against protectionism:
- Increase prices for consumers/producers
- Less choice for consumers
- Inefficient domestic firms
- Distorts comparative advantage, leading to the inefficient use of the world's resources
- Hinder economic growth
Activity/HW: Find an article which is pro or anti free trade and summarize (connect one of the concepts above to the article for full credit).