24 terms

International Trade: Chapter 10

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Baltic Free Trade Agreement (BAFTA)
The agreement among the Baltic States of Estonia, Latvia, and Lithuania setting up a free trade area among themselves.
Bilateral agreements
Trade between any two nations.
Bulk purchasing
An agreement to purchase a specified amount of a commodity for a year or a number of years.
Central and Eastern European Countries (CEEC)
Includes Albania, Bosnia, and Herzegovina, Bulgaria, Croatia, the Czech Republic, the Federal Republic of Yugoslavia, Hungary, the former Yugoslav Republic (FYR), Macedonia, Poland, Romania, the Slovak Republic, and Slovenia.
Central European Free Trade Association (CEFTA)
The agreement signed by Poland, Hungary, the Czech Republic, and Slovakia in 1992 calling for the establishment of free trade among its members within 10 years (subsequently anticipated for 1997).
Centrally planned economies
Economies in which factors of production are owned by the government and prices are determined by government directives.
Common market
Removes all barriers on trade among members, harmonizes trade policies toward the rest of the world, and also allows the free movement of labor and capital among member nations. An example is the European Union (EU) since January 1, 1993.
Commonwealth of Independent States (CIS)
The organization formed by most of the former Soviet Republics when the Soviet Union was dissolved at the end of 1991.
Council of Mutual Economic Assistance (CMEA or COMECON)
The organization of Communist bloc nations formed by the Soviet Union in 1949 to divert trade from Western nations and achieve a greater degree of self-sufficiency among Communist nations
Customs union
Removes all barriers on trade among members and harmonizes trade policies toward the rest of the world. The best example is the European Union (EU).
Duty-free zones or free economic zones
Areas set up to attract foreign investments by allowing raw materials and intermediate products duty free.
Economic integration
The commercial policy of discriminatively reducing or eliminating trade barriers only among the nations joining together.
Economic union
Removes all barriers on trade among members, harmonizes trade policies toward the rest of the world, allows the free movement of labor and capital among member nations, and also harmonizes or unifies the monetary, fiscal, and tax policies of its members.
European Economic Area (EEA)
The free trade area formed by the 12 members of the EU and 5 of the 7 members of the EFTA on January 1, 1994.
European Free Trade Association (EFTA)
The free trade area that was formed in 1960 by the United Kingdom, Austria, Denmark, Norway, Portugal, Sweden, and Switzerland, with Finland an associate member in 1961. Iceland acceded in 1970. In 1973, the United Kingdom and Denmark left the EFTA in 1986 and Liechtenstein in 1991. In 1995, Austria, Finland, and Sweden left the EFTA and joined the EU.
European Union (EU)
The customs union formed by West Germany, France, Italy, Belgium, the Netherlands, and Luxembourg that came into existence in 1958, and expanded to 15 nations with the joining of the United Kingdom, Denmark, and Ireland in 1973, Greece in 1981, Spain and Portugal in 1986, and Austria, Finland, and Sweden in 1995.
Free trade area
Removes all barriers on trade among members, but each nation retains its own barriers on trade with nonmembers. The best examples are the EFTA, NAFTA, and Mercosur.
Mercosur
The South American, or Southern Cone, Common Market that was formed by Argentina, Brazil, Paraguay, and Uruguay in 1991.
Newly Independent States (NIS)
Includes Armenia, Azerbaijan, Belarus, Estonia, Georgia, Kazakhstan, the Kyrgyz Republic, Latvia, Lithuania, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan.
North American Free Trade Agreement (NAFTA)
The agreement to establish a free trade area among the United States, Canada, and Mexico that came into existence on January 1, 1994.
Preferential trade arrangements
The loosest form of economic integration; provides lower barriers to trade among participating nations than on trade with nonparticipating nations. An example is the British Commonwealth Preference Scheme.
State trading companies
The state organizations in centrally planned economies handling trade in specific product lines.
Southern Common Market (Mercosur)
The South American, or Southern Cone, Common Market that was formed by Argentina, Brazil, Paraguay, and Uruguay in 1991.
Tariff factories
Direct investments made in a nation or other economic unit (such as a customs union) to avoid import tariffs.