International Trade and Trade Restrictions. Presented By: Nathan Groce And Josh Thurman. Introduction.
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For more than two decades after World War II, international trade of the United States was viewed primarily as a matter of rapidly expanding export markets and to acquisition of foreign assets by U.S. investors.
Over a relatively short time the U.S. economy experienced a transition to a state of considerable international interdependence.
International trade is highly important to U.S. agriculture because exports represent approximately ¼ of the total revenue from sales of U.S. farm products.
Both exports and imports have increased over time.
2. products not produced here (coffee, bananas, and tea)
Agricultural trade is a key factor in agricultural policy, and there appears to be a strong inverse relationship between the volume of exports of the U.S. farm products and domestic price-support expenditures.
Because U.S. Agriculture is heavily dependent on exporting its products, U.S. farmer have a strong stake in maintaining an open economy.
Export subsidies began with an amendment to the 1933 AAA, Section 32 which authorized the use of 30 percent of import tariff revenues to subsidize agricultural exports and domestic consumption of “surplus” commodities.
Although section 32 funds are no longer used to pay for export subsidies.
The General Agreement on Tariffs and Trade (GATT) was a multilateral treaty among governments dating from 1947.
The GATT’s purpose was to liberalize and expand trade through negotiated reductions in trade barriers.
The Uruguay Round created the World Trade Organization.
Until the Uruguay Round, agriculture had received special treatment under GATT trade rules through various loopholes, exceptions, and expenditures from most of the disciplines the applied to manufactured goods.
The U.S. farm price-support programs were originally developed on the assumptions that the domestic demands for the affected products were inelastic, while world demand was elastic because of greater availability of substitutes.
U.S. farmers reacted strongly to the export boom of the mid- 19702 for farm products.