International Trade

To reduce unemployment, protect infant industries, or improve the current account.

It leads to inefficiency, higher prices, and potential retaliation from trading partners.

A payment by the government to domestic firms to encourage exports by lowering costs.

They may struggle to compete against more developed industries and face job losses in uncompetitive sectors.

When joining a trade bloc leads to the replacement of high-cost domestic production with lower-cost imports from members.

When joining a trade bloc causes imports to shift from low-cost non-members to higher-cost member countries.

A tax on imported goods that raises their price to reduce import demand.

A demand and supply diagram showing a world price with the tariff shifting the price upward and reducing imports.

Promote free trade by encouraging the reduction of trade barriers and resolving disputes.

A trade bloc with free internal trade and a common external tariff on non-members.

International trade without government-imposed restrictions such as tariffs, quotas, or subsidies.

A group of countries that remove trade barriers between themselves but retain individual policies with outsiders.

An economic union with a shared currency and common monetary policy (e.g., the Eurozone).

A customs union with free movement of goods, services, capital, and labor.

They lower production costs, allowing domestic firms to compete with foreign imports.

To protect domestic industries and jobs, especially in infant or strategic sectors.

Selling goods abroad at below cost or below domestic prices, often leading to unfair competition.

Increased efficiency and consumer choice, and access to a larger market.

A legal limit on the quantity of a good that can be imported into a country.