Title: 3.5 Reducing International Trade Barriers – Exploring Business
Headings: 3.5 Reducing International Trade Barriers
3.5 Reducing International Trade Barriers
Learning Objective
Trade Agreements and Organizations
General Agreement on Tariffs and Trade
World Trade Organization
Financial Support for Troubled Economies
The International Monetary Fund
The World Bank
Criticism of the IMF and the World Bank
Trading Blocs
North American Free Trade Association
The European Union
The Euro
Other Trading Blocs
Key Takeaways
Exercises
References

Content: But the provisions of the EU go beyond those of NAFTA in several important ways. Most importantly, the EU is more than a trading organization: it also enhances political and social cooperation and binds its members into a single entity with authority to require them to follow common rules and regulations. It is much like a federation of states with a weak central government, with the effect not only of eliminating internal barriers but also of enforcing common tariffs on trade from outside the EU. In addition, while NAFTA allows goods and services as well as capital to pass between borders, the EU also allows people to come and go freely: if you possess an EU passport, you can work in any EU nation. The Euro
A key step toward unification occurred in 1999, when most (but not all) EU members agreed to abandon their own currencies and adopt a joint currency. The actual conversion occurred in 2002, when a common currency called the euro replaced the separate currencies of participating EU countries. The common currency facilitates trade and finance because exchange-rate differences no longer complicate transactions 1. Its proponents argued that the EU would not only unite economically and politically distinct countries but also create an economic power that could compete against the dominant players in the global marketplace.