in the global trade environment

Chapter 3 -- summary

The multilateral World Trade Organization, created in 1995 as the successor to the General Agreement on Tariffs and Trade, provides a forum for settling disputes among member nations and tries to set policy for world trade. The world trading environment is also characterized by preferential trade agreements among smaller numbers of countries on the regional and some regional basis. These agreements can be conceptualized on a continuum of increasing economic integration. Free trade areas such as the one created by the North American Free Trade Agreement (NAFTA) represent the lowest level of economic integration. The purpose of a free trade area is to eliminate tariffs and quotas.

Rules of origin are used to verify the country from which the goods are shipped. A customs union represents a further degree of integration in the form of common external tariffs. And a common market such as the Central American Integration System (SICA), restrictions on the movement of labor and capital are based in an effort to further increase integration. In an economic union, such as the European Union (EU), the highest level of economic integration is achieved by unification of economic policies and institutions. Other important call Thracian agreements include the Association of Southeast Asian Nations (ASEAN) and Quad ration Council for the Arab States of the Golf (GCC). In Africa, the two main cooperation agreements are the Economic Community of West African States (ECOWAS) and the South African Development and community (SADC).