Balance of payments: a summary statement of all the international transactions of the residents of a nation with the rest of the world during a particular period of time.
Bilateral agreements: agreements between two nations regarding quantities and terms of specific trade transactions.
Bretton woods system: preparing to rebuild the international economic system as World War II was still raging, 730 delegates from all 44 allied nations gathered at the Mount Washington hotel in Bretton Woods, New Hampshire for the United Nations monetary and financial conference. The delegates deliberated upon and signed the Bretton woods agreements during the first 3 weeks of July 1944.
Closed economy: an economy that doesn’t engage in any external trade relations or international transactions.
Comparative advantage theory: It was devised by the economist David Ricardo and it explains why it can be beneficial for two parties (countries, regions, individuals) to trade, even though one of them may be able to produce every kind of item more cheaply than the other. What matters is not the absolute cost of production, but rather the ratio between how easily the two countries can produce different goods. The concept is highly important in modern international trade theory.
Customs union: a form of economic integration where all the barriers of trade are removed among member countries and harmonize trade policies towards the rest of the world. Example; the European Union (EU).
Dumping: In economics, “dumping” can refer to any kind of predatory pricing, and is by most definitions a form of price discrimination. However, the word is generally used only in the context of international trade law, where dumping is defined as the act of a manufacturer in one country exporting a product to another country at what some perceive as an unreasonably low price.
Economic integration: the commercial policy of discriminatively reducing or eliminating trade barriers only among the nations joining together.
Economies of scale: savings achieved in the cost of production by larger enterprises because the cost of initial investment can be defrayed across a greater number of producing units.
Embargo: an order ceasing trade activities. A government restriction or restraint on commerce, especially an order that prohibits trade in a given commodity or with a particular nation
Enterprise: a project or undertaking that is especially difficult, complicated, or risky.
Export subsidies: the granting of tax relief and subsidized loans to potential exporters, and low-interest loans to foreign buyers of the nation’s exports.
Free Trade: this is international trade that is unrestricted and not liable to protective policies or duties that were set to put a ceiling on overseas imports
Free trade area: removes all barriers on trade among members, but each nation retains its own barriers on trade with non- members. For example: NAFTA
Globalization: the growing worldwide linkages, integration and interdependence in the economic, social, technological, cultural, political, and ecological arena
Great depression: a worldwide economic downturn, starting in 1929 (although its effects were not fully felt until late in 1930) and lasting through most of the 1930s. It centered in North America and Europe, but had damaging effects around the world. The most industrialized countries were affected the worst, including the United States, Germany, Britain, France, Canada and Australia. Cities around the world were hit hard, especially those based on heavy industry. Construction virtually halted in many countries.
Horizontal integration: the production abroad of a differentiated product that is produced at home.
Inflation: is a rise in the general level of prices, as measured against baseline of purchasing power. Inflation corresponds with the decline in purchasing power of money relative to some basket of goods and services.
Market: This is the whole area of economic activity where buyers are in contact with sellers and in which the laws of supply and demand operate. This also refers to a region or group considered as customers: a geographic area or a section of the population, considered from the point of view of the amount of goods that can be sold to it.
Most Favored Nation (MFN): the extension to all trade partners of any reciprocal tariff reduction negotiated by any member country within the WTO with any other member.
Multilateral trade negotiations: Trade negotiations that are conducted among many countries.
Multinational corporations: firms that own, control, or manage production and distribution facilities in several countries.
Non-tariff trade barriers: trade restrictions other than tariffs, such as export subsidies, quotas, dumping...etc.
Phytosanitary measures: any legislation, regulation or official procedure having the purpose of preventing the introduction and/or spread of pests.
Protectionism: is the economic policy of restraining trade between nations, through methods such as high tariffs on imported goods, restrictive quotas, a variety of restrictive government regulations designed to discourage imports, and anti dumping laws in an attempt to protect domestic industries in a particular nation from foreign take-over or competition. This contrasts with free trade, where no artificial barriers to entry are instituted.
Quota: a direct quantitative restriction on trade.
Reserve currency: is a currency which is held in significant quantities by many governments and institutions as part of their foreign exchange reserves. It also tends to be the international pricing currency for products traded on a global market, such as oil, gold, etc. Under the Bretton Woods system the Dollar was regarded as the world’s reserve currency.
Tariffs: duty charged/levied on imported or exported goods by a government
Trade War: economic tug-of-war between nations in which each side tries to limit the other's exports while flooding the other's market with its own goods.
Vertical integration: The expansion of a firm backward to supply its own raw materials and intermediate products and/or forward to provide its own sales or distribution networks.
Washington consensus: It was first presented in 1990 by John Williamson, an economist from the institute for internal economics, an international economic think tank based in Washington, D.C. It is so called because it attempts to summarize the commonly shared themes among policy advice by Washington base institutions at the time, such as the international monetary fund, World Bank, and U.S. treasury department, which were believed to be necessary for the recovery of Latin America from the financial crises of the 1980s.
