Which Statement Reflect The Purpose Of Trade Agreements

In the United States, the North American Industry Classification System (NAICS) is used to collect statistical data describing the United States. Economy, based on industries with similar processes for the production of goods or services. In contrast, data on international merchandise trade are collected on a commodity basis. [16] NAFTA partners the United States, Canada and Mexico also use NAICS, but the European Union uses a system called the Nomenclature of Economic Activities. Although there are concordances between these different systems, they are far from accurate. From the time of Adam Smith in 1776 until the introduction of GATT in 1947, economic theory of trade developed quite slowly. However, since the introduction of GATT in 1947, a number of important changes have been made to the traditional Western economic theory of international trade. These changes largely update the basic theory of trade to reflect the new realities of industry and commerce. In the days of Smith, Ricardo and Hecksher-Ohlin, enterprises were generally small and most international trade was done with agricultural or mineral products or through small productions. By 1947, however, large-scale production had expanded and much of the trade was with manufactured goods. Fourth, Western economic theory assumes that trade will be reasonably balanced over time. If this is not the case, it is stated that the deficit country will import products for which it would normally have a comparative advantage; If these products are located in areas where production costs are decreasing, the industry could lose its ability to compete in global markets over time. .