Foreign Trade & WTO

TRIPS (Trade-Related Aspects of Intellectual Property Rights) is the international agreement that sets minimum standards for many forms of intellectual property regulation.

Balance of Trade (BOT) specifically refers to the difference between the monetary value of a nation's exports and imports of visible goods over a certain period.

The MFN principle requires that if a country grants a special favour (like a lower customs duty rate) to one country, it must do the same for all other WTO members.

Import quotas are restrictions on the quantity of a good that can be imported, which is a non-tariff barrier, whereas duties and subsidies involve financial charges or transfers.

The World Trade Organization (WTO) replaced the General Agreement on Tariffs and Trade (GATT) following the conclusion of the Uruguay Round negotiations.

TRIMS refers to rules that apply to the domestic regulations a country applies to foreign investors, specifically those that impact trade in goods.

The Current Account includes trade in goods, trade in services, income (investment income), and current transfers (remittances).

Dumping is a predatory pricing practice where a country exports goods at a price lower than their domestic market price or cost of production to gain market share.

SDR is an international reserve asset created by the IMF to supplement the official reserves of its member countries.

Green Box subsidies are those that cause little to no trade distortion and are allowed without limits under WTO rules (e.g., research, disease control).

Devaluation makes a country's exports cheaper in foreign currency terms, potentially increasing the demand for those exports in the global market.

The WTO is headquartered in Geneva, Switzerland.

External Commercial Borrowings (loans from abroad) fall under the Capital Account, not the Current Account.

The Uruguay Round (1986–1994) was the 8th round of multilateral trade negotiations conducted within the framework of GATT, leading to the creation of the WTO.

Countervailing duties are tariffs levied on imported goods to offset the subsidies provided by the exporting country's government to its producers.

FOB (Free On Board) means the seller pays for transportation of the goods to the port of shipment, plus loading costs; the buyer pays for the rest.

Comparative Advantage, a theory by David Ricardo, suggests that countries should specialize in producing goods where they have a lower opportunity cost.

BoP is a systematic record of all economic transactions between the residents of a country and the rest of the world during a given period.

GATS is the first and only set of multilateral rules covering international trade in services, such as banking, insurance, tourism, and telecommunications.

Capital Account Convertibility allows residents to freely move funds between domestic and foreign financial assets without restrictions.

Amber Box subsidies are those considered to cause trade distortion as they encourage excessive production; hence, they are subject to reduction commitments.

Anti-dumping duties are protectionist tariffs that a domestic government imposes on foreign imports that it believes are priced below fair market value.

The 'Single Undertaking' principle implies that WTO members must accept the entire set of agreements as a package rather than choosing which ones to sign.

The IMF provides financial assistance to countries experiencing actual or potential balance of payments problems to restore stability.

Terms of Trade (ToT) is the ratio of an index of a country's export prices to an index of its import prices.

The Appellate Body is a standing body of seven persons that hears appeals from reports issued by panels in disputes brought by WTO members.

An import quota is a type of trade restriction that sets a physical limit on the quantity of a good that can be imported into a country in a given period.

Invisible items refer to services, such as shipping, banking, insurance, and tourism, which do not have physical existence like goods (visible items).

The Doha Development Agenda (DDA) is the latest round of trade negotiations among WTO members, aiming to lower trade barriers around the world.

The Capital Account records net changes in national ownership of international assets, including foreign direct investment and portfolio investment.

National Treatment is a principle stating that imported and locally-produced goods should be treated equally after the foreign goods have entered the market.

A hard currency is a globally traded currency that serves as a reliable and stable store of value, such as the US Dollar, Euro, or Japanese Yen.

Adam Smith's Theory of Absolute Advantage states that a country should produce goods it can make more efficiently than its trading partners.

Devaluation is a deliberate downward adjustment to a country's currency value relative to another currency, often used to make exports cheaper.

Blue Box subsidies are those that require farmers to limit production; they are accepted under WTO rules because they are considered less trade-distorting.

Visible trade refers to the export and import of physical, tangible goods, such as iron ore, machinery, or agricultural products.

Trade Facilitation involves the simplification, modernization, and harmonization of export and import processes to reduce the cost and time of moving goods across borders.

In a customs union, members eliminate internal trade barriers among themselves and adopt a common set of external tariffs for trade with non-members.

The Heckscher-Ohlin theory states that countries will export goods that make intensive use of factors they possess in abundance.

The ITC is the joint agency of the World Trade Organization and the United Nations, specifically dedicated to supporting the internationalization of small and medium-sized enterprises.

An import quota is a non-tariff trade restriction that sets a physical limit on the quantity of a good that can be imported.

MFN requires that if a country grants a special favor (like a lower customs duty rate) to one trading partner, it must extend that same treatment to all other WTO members.

The Amber Box includes all domestic support measures considered to distort production and trade, such as price supports and input subsidies.

Invisible trade refers to the trade in services (banking, tourism, software, consultancy) rather than physical, tangible goods.

GATS was the first set of multilateral rules covering international trade in services, such as banking, telecommunications, and tourism.

The Heckscher-Ohlin model states that countries will export goods that make intensive use of factors that are locally abundant.

A common market allows not only for the free trade of goods and services but also for the free movement of factors of production like labor and capital.

Trade liberalization involves the removal or reduction of restrictions or barriers on the free exchange of goods between nations.

Terms of trade represent the relationship between the prices at which a country sells its exports and the prices it pays for its imports.

The Dispute Settlement Body (DSB) is the WTO's mechanism for resolving trade disputes between member countries.