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Trade and Globalization

Trade and Globalization 1 Trade and Globalization TABLE OF CONTENTSTRADE AND Globalization .. 2 INTRODUCTION .. 2 A SNAPSHOT OF Trade .. 3 PRIMER 1: THE ECONOMICS OF INTERNATIONAL Trade .. 8 INTERNATIONAL Trade IN HISTORY .. 8 WHY DO NATIONS Trade ? .. 9 WHY DO NATIONS EXPORT? .. 10 CURRENCIES AND EXCHANGE RATES .. 13 WHY DO NATIONS IMPORT? .. 15 Trade SPECIALIZATION .. 17 THE THEORY OF COMPARATIVE ADVANTAGE .. 19 COMPARATIVE ADVANTAGE VERSUS ABSOLUTE ADVANTAGE .. 21 THE Trade BALANCE .. 23 PRIMER 2: GOVERNMENT REGULATION OF Trade ..26 EFFORTS TO MANIPULATE Trade FLOWS .. 26 IMPORT RESTRICTIONS .. 27 EXPORT SUBSIDIES .. 30 CONSEQUENCES OF Trade RESTRICTIONS .. 31 TARIFF DEBATES IN HISTORY .. 32 LIBERALIZATION: THE DEREGULATION OF INTERNATIONAL Trade ..34 LIBERALIZATION OF INTERNATIONAL Trade .. 37 MULTILATERAL Trade LIBERALIZATION: THE URUGUAY ROUND AND THE WORLD Trade ORGANIZATION.

Trade and Globalization Introduction The tremendous growth of international trade over the past several decades has been both a primary cause and effect of globalization. The volume of world trade increased twenty-seven fold from $296 billion in 1950 to $8 trillion in 2005.1 Although

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