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Aadhaar "Aadhaar is a 12 digit individual identification number which serves as proof of identity and proof of address for residents of India." It has many uses, including online identification, access to government-provided services, and opening a bank account. The word means "base" or "foundation" in Hindi. [Source]
AAA Agricultural Adjustment Act
Abnormal Importations Act An act of the UK parliament in 1931 which authorized the government to impose 100% tariffs on goods that were imported in "abnormal quantities." [Source]
Abominations See Tariff of Abominations
Above the line In balance of payments accounting, this refers to those transactions that are included in calculating the balance of payments surplus or deficit. Transactions below the line, typically official reserve transactions and sometimes short term capital flows, are not included.
Absent factor A factor of production that makes its contribution to production without being physically present where production takes place.
Absolute advantage The ability to produce a good at lower cost, in terms of real resources, than another country. In a Ricardian model, cost is in terms of labor only. Absolute advantage is neither necessary nor sufficient for a country to export a good. See comparative advantage.
Absolute advantage trade policy The idea, advocated by opponents of globalization, that a country should import only goods for which other countries have an absolute advantage, particularly goods that the importing country cannot (or cannot "reasonably") produce itself.
Absolute Purchasing Power Parity See purchasing power parity.
Absorption 1. Total demand for final goods and services by all residents (consumers, producers, and government) of a country (as opposed to total demand for that country's output). The term was introduced as part of the Absorption Approach.
2. Roll-up
Absorption approach A way of understanding the determinants of the balance of trade, noting that it is equal to income minus absorption. Due to Alexander (1952)
Abundant Available in large supply. Usually meaningful only in relative terms, compared to demand and/or to supply at another place or time. See factor abundance.
Abundant factor The factor in a country's endowment with which it is best endowed, relative to other factors, compared to other countries. May be defined by quantity or by price.
Academic Consortium on International Trade A group of academic economists and lawyers who specialize in international trade policy and international economic law. ACIT's purpose was to prepare and circulate policy statements and papers on important, issues of international trade policy. Formed in 2000, it has not been active since 2001.
Acceptance See trade acceptance.
Accession The process of adding a country to an international agreement, such as the GATT, WTO, EU, or any FTA.
Accession country A country that is waiting to become a member of the EU.
Accession protocol A protocol of accession
Accommodating transaction In the balance of payments, a transaction that is a result of actions taken officially to manage international payments; in contrast to autonomous transaction. Thus official reserve transactions are accommodating, as may be short-term capital flows that respond to expectations of intervention.
Accountability One of the four requirements for successful development aid posed by Easterly (2006) in his acronym CIAO: that the recipients of the aid be held accountable for how it is used.
Accumulation The acquisition of an increasing quantity of something. The accumulation of factors, especially capital, is a primary mechanism for economic growth.
ACE Automated Commercial Environment
ACIT Academic Consortium on International Trade
ACP Countries A group of African, Caribbean, and Pacific less developed countries that were included in the Lomé Convention and now the Cotonou Agreement. As of February 2024, the group included 79 countries.
Acquis communautaire This is the law of the European Union. It encompasses "all treaties, EU legislation, international agreements, standards, court verdicts, fundamental rights provisions and horizontal principles in the treaties such as equality and non-discrimination." [Source]
ACR formula The result of Arkolakis, Costinot, and Rodríguez-Clare (2012) that in a class of trade models, the welfare gain from trade can be expressed by a simple formula that depends only on the domestic trade share and the elasticity of trade with respect to variable trade costs.
ACS Association of Caribbean States
Act East The reformulation of India's Look East policy under Prime Minister Narendra Modi in 2014. [Source]
ACTA Anti-Counterfeiting Trade Agreement
Actionable subsidy A subsidy that is neither prohibited by the WTO nor explicitly permitted, but that member countries are permitted to levy countervailing duties against. Said to be in the amber box.
Active labor market policy Any of several policies that seek to help unemployed and underemployed workers connect with firms that may hire them. Considered and alternative to, or supplement to, trade adjustment assistance. [Source]
ACTPN Advisory Committee on Trade Policy and Negotiations
Actual protection rate Implicit tariff.
ACU 1. Asian Currency Unit
2. Asian Currency Union
3. Asian Clearing Union
ACWL Advisory Centre on WTO Law
AD Anti-dumping
Ad valorem Per unit of value (i.e., divided by the price).
Ad valorem equivalent The ad valorem tariff that would be equivalent, in terms of its effects on trade, price, or some other measure, to a nontariff barrier.
Ad valorem tariff Tariff defined as a percentage of the value of an imported good.
ADB 1. African Development Bank Group
2. Asian Development Bank
ADD Anti-dumping duty.
Adding-up problem The concern that if several developing countries expand their exports of the same good simultaneously, then the price of that good in world markets will fall, worsening their terms of trade, perhaps lowering their export revenues and real incomes as a result.
Adequacy decision A determination by the European Commission that "a country outside the EU offers an adequate level of data protection." "The effect of such a decision is that personal data can flow from the EU (and Norway, Liechtenstein and Iceland) to that third country without any further safeguard being necessary."
Adjustable peg An exchange rate that is pegged, but for which it is understood that the par value will be changed occasionally. This system can be subject to extreme speculative attack and financial crisis, since speculators may easily anticipate these changes.
Adjusted for inflation Corrected for price changes to yield real equivalent. The adjustment divides nominal amount for each year by price index for that year -- e.g. the CPI or the implicit price deflator -- and multiplies by 100. Result is valued at the prices of the base year for the price index.
Adjustment assistance Government program to assist workers and/or firms whose industry has declined, either due to import competition (trade adjustment assistance) or from other causes. Such programs usually have two (conflicting) goals: to lessen hardship for those affected, and to help them change their behavior -- what, how, or where they produce.
Adjustment cost The cost -- temporary but sometimes severe -- incurred by a person or firm in moving from one equilibrium to another. Many of the costs associated with trade liberalization are adjustment costs and are not accounted for in the usual measures of gains from trade.
Adjustment mechanism The theoretical process by which a market changes in disequilibrium, moving toward equilibrium if the process is stable. See Walrasian and Marshallian adjustment.
Administered price A price for a good or service that is set and maintained by government, usually requiring accompanying restrictions on trade if the administered price differs from the world price.
Administered protection Protection (tariff or NTB) resulting from the application of several statutes that respond to specified market circumstances or events, usually as determined by an administrative agency. Several such statutes are permitted under the GATT, including anti-dumping duties, countervailing duties, and safeguard protection.
Administrative agency A unit of government charged with the administration of particular laws. In the United States, those most important for administering laws related to international trade are the USITC and ITA.
Administrative entry procedure Formalities required to bring a product into a country. If these are unnecessarily difficult or time consuming, they constitute a nontariff barrier.
Administrative guidance In the context of trade policy, this usually refers an informal system of Japanese industrial policy, called gyosei-shido, where official pronouncements serve as guidelines for domestic businesses.
Advance deposit requirement A requirement that some portion of the value of imports, or of import duties, be deposited prior to full payment, without competitive interest being paid.
Advanced country Developed country.
Advantage 1. Usually refers to a cost advantage, though it could refer to a strategic advantage (such as first mover advantage) or to a superiority of technology or quality.
2. Absolute advantage or comparative advantage.
Adverse selection The tendency for insurance to be purchased only by those who are most likely to need it, thus raising its cost and reducing its benefits.
Adverse terms of trade A terms of trade that is considered unfavorable relative to some benchmark or to past experience. Developing countries specialized in primary products are sometimes said to suffer from adverse or declining terms of trade.
Advisory Centre on WTO Law The Advisory Centre on World Trade Organization Law "advises its developing country Members and least-developed countries on all issues relating to WTO law." It gives free legal adice and training, and it provides support in WTO dispute settlement at discounted rates.
Advisory Committee for Trade Policy and Negotiations The highest-level of several committees that advise USTR on trade policy and trade negotiations. This one includes representatives of private-sector businesses, trade associations, unions, state and local governments, and other organizations.
AEC 1. African Economic Community
2. ASEAN Economic Community
AEI American Enterprise Institute
AfCFTA African Continental Free Trade Agreement
AfDB African Development Bank Group
Affine transformation For most purposes, this is the same as a linear transformation.
Afreximbank The African Export-Import Bank, based in Cairo, Egypt, "operating as a first class, profit-oriented, socially responsible financial institution and a center of excellence in African trade matters."
African Continental Free Trade Agreement An agreement to create the largest free trade area in the world, covering almost all of the countries of Africa. It went into force May 30, 2019, signed by all but three of 55 countries.
African Development Bank Group A multinational development bank for Africa, which includes the African Development Fund.
African Economic Community An organization of African countries that aims to promote economic, cultural and social development among the African economies. Among other things, it intends to promote the formation of FTAs and customs unions among regional groups within Africa that will eventually merge into an African Common Market.
African Export-Import Bank Afreximbank
African Growth and Opportunity Act U.S. legislation enacted May 2000 providing tariff preferences to African countries that qualify, including trade facilitation and technical assistance to producers. As of February 2024, 32 countries were listed as eligible. Several countries have had their eligibility removed and some later reinstated over the years.
African Union "The African Union (AU) is a continental body consisting of the 55 member states that make up the countries of the African Continent. It was officially launched in 2002 as a successor to the Organisation of African Unity (OAU, 1963-1999)."
AfT Aid for trade
AFTA ASEAN Free Trade Area
AG Comparable to "Inc" in the U.S. and Ltd in the U.K., this abbreviation for the German Aktiengesellschaft indicates a limited-liability corporation.
AGE Applied general equilibrium
Agência de Promoção às Exportações The export promotion agency of the government of Brazil. It is one of several export agencies of the Brazilian government, with others providing credit and insurance. [Source]
Agency security A security issued by an enterprise sponsored by or otherwise related to the US government and therefore viewed as low-risk. Other central banks routinely hold them along with US Treasury securities. [Source]
Agenda 21 A plan of action adopted at the Rio Summit in 1992 to promote sustainable development.
Agent 1. An entity within the economy that makes economic decisions and engages on economic activity. Used to refer to individual consumers, households, and firms.
2. One who acts on behalf of someone else.
3. In Principal-Agent Theory, the person whose job it is to act to the benefit of someone else (the principal), but who may require some incentive to do so.
Agglomeration The phenomenon of economic activity congregating in or close to a single location, rather than being spread out uniformly over space.
Agglomeration economy Any benefit that accrues to economic agents as a result of having large numbers of other agents geographically close to them, thus tending to lead to agglomeration. This is a basic feature of the New Economic Geography. Due to Marshall (1890). [Source]
Aggregate 1. As an adjective or noun (with stress only on the first syllable), this refers to the sum or total of multiple items.
2. As a verb (with second stress on the last syllable), it means to combine such items or add them up.
Aggregate demand The total demand for a country's output, including demands for consumption, investment, government purchases, and net exports.
Aggregate measure of support Variation of aggregate measurement of support.
Aggregate measurement of support The measurement of subsidy to agriculture used by the WTO as the basis for commitments to reduce the subsidization of agricultural products. It includes the value of price supports and direct subsidies to specific products, as well as payments that are not product specific.
Aggregate production possibility frontier The production possibility frontier, or curve obtained by adding the production possibilities of two or more countries or regions.
Aggregate supply The total supply of a country's output of all industries combined, usually assumed to be an increasing function of its price level in the short run but independent of the price level in the long run.
Aggregate supply and demand model The model in which a country's income and price level are determined by the intersection of curves representing aggregate supply and aggregate demand.
Aggregate transformation curve Aggregate production possibility frontier
Aggregation The combining of two or more kinds of an economic entity into a single category. Data on international trade necessarily aggregate goods and services into manageable groups. For macroeconomic purposes, all goods and services are usually aggregated into just one.
Aggressive unilateralism The threat or use of trade restrictions to induce another country to open its markets or otherwise change policies that are perceived to be unfair. Examples in US law and action include Section 301, Super 301, and Trump Tariffs. [Origin]
AGOA African Growth and Opportunity Act
Agora Subunit of the shekel. Plural is agorot.
Agrarian reform Change in the policies affecting agriculture, usually including redistribution of land and sometimes also changes in other policies related to the inputs and outputs of agriculture.
Agreement on Agriculture See Agriculture Agreement.
Agreement on Government Procurement 1. A plurilateral agreement within the GATT and later the WTO binding participants to principles of openness, transparency, and nondiscrimination on categories of government procurement that they have specified. As of February 2024 there were 22 parties to the agreement, including the EU for its 27 members.
2. GPA 1994 is the revised agreement negotiated as part of the Uruguay Round but still only a plurilateral agreement. It entered into force January 1, 1996.
3. GPA 2012 is a renegotiated plurilateral agreement, formally adopted March 2012, that entered into force April 6, 2014.
Agreement on Information Technology See Information Technology Agreement.
Agreement on Subsidies and Countervailing Measures The WTO replacement for the Tokyo Round Subsidies Code. Unlike the Subsidies Code, this defined subsidies (in terms of financial contribution by government and the benefit provided). To be subject to countervailing duty, the subsidy must be specific to an enterprise, industry, or region.
Agreement on Textiles and Clothing The 10-year transitional program of the WTO to phase out the quotas on textiles and apparel of the MFA during the period 1995-2004.
Agreement on Trade in Civil Aircraft This plurilateral agreement within the GATT and later WTO went into force in 1980. It eliminated duties on aircraft (except military) and aircraft parts, and includes disciplines on government procurement and inducements to purchase. As of Feruary 2024 its signatories included 33 countries including the EU.
Agreement on Trade in Pharmaceutical Products Aka the Pharma Agreement, this plurilateral agreement among a subset of WTO members was concluded in 1994 during the Uruguay Round. Members agree to eliminate tariffs and other duties and charges on many pharmaceuticals on an MFN basis.
Agricultural Adjustment Act US legislation in 1933 that gave subsidies to farmers in return for restricting production of some crops. It also gave the president authority to impose import quotas to cut imports by up to 50% if imports were interfering with the aims of the legislation. [Source]
Agricultural good A good that is produced by agriculture. Contrasts with manufactured good.
Agricultural Market Information System An international "inter-agency platform to enhance food market transparency and policy response for food security," launched by the G20 in 2011 in response to increases in food prices.
Agricultural Trade Development and Assistance Act Public Law 480
Agriculture Production that relies essentially on the growth and nurturing of plants and animals, especially for food, usually with land as an important input; farming. Contrasts with manufacturing.
Agriculture Agreement The agreement within the WTO that commits member governments to improve market access and reduce trade-distorting subsidies in agriculture, starting with the process of tariffication.
Agroicone "A consultancy founded in 2003 by large agribusiness associations to conduct research and support Brazil and its agribusiness in international trade negotiations." [Source]
Aichi Targets A set of objectives for biodiversity set at the 2010 Conference of Parties to the Convention on Biological Diversity, held at Aichi precinct of Nagoya, Japan.
Aid Assistance provided by countries and by international institutions such as the World Bank to developing countries in the form of monetary grants, loans at low interest rates, in kind, or a combination of these.
Aid for trade The strategy of promoting economic development by helping countries to create or improve the infrastructure needed to facilitate international trade. This was one of the intended components of the Doha Round negotiations, and was institutionalized in a WTO work program on Aid-for-Trade in the Hong Kong Ministerial.
AIIB Asian Infrastructure Investment Bank
Airbus A subsidiary of EADS, Airbus is a company producing aircraft in Europe. It was originally backed by a consortium of four companies from four countries (France, Germany, Spain, and the U.K.) and their governments. That backing has been one of the subjects of the Boeing-Airbus Dispute.
Aktiengesellschaft See AG.
ALADI Asociación Latinoamericana de Integración (Spanish for Latin-American Integration Association)
ALCA Acuerdo de Libre Comercio de las Américas (Spanish for Free Trade Area of the Americas )
ALCAN Acuerdo de Libre Comercio de América del Norte (Spanish for North American Free Trade Agreement)
Alchian-Allen Theorem The proposition, due to Alchian and Allen (1964), that when the same absolute cost (as for transportation) is added to the prices of a low-price, low-quality good and a high-price, high-quality good, the relative demand for the latter will increase, since its relative price falls. Summarized as "shipping the good apples out," the result has been confirmed in international trade by Hummels and Skiba (2004).
Alimentary autarky Self-sufficiency in food. An objective of Fascist Italy articulated in 1925 in response to sanctions imposed on it by the League of Nations. [Source]
All-Russian Cooperative Society The principal agency for trade between the UK and the USSR until British police raided it in May 1927. [Source]
Allocation An assignment of economic resources to uses. Thus, in general equilibrium, an assignment of factors to industries producing goods and services, together with the assignment of resulting final goods and services to consumers, within a country or throughout the world economy.
Allocation puzzle The fact that capital flows across developing countries, not toward countries that invest and grow more as one would expect, but away from them. Identified and named by Gourinchas and Jeanne (2007).
Allocative efficiency Refers to whether or not an allocation is efficient. A change from an allocation that is not efficient, to one that is, may be termed an "increase" in allocative efficiency.
ALOP Appropriate level of protection
Alternative Trade Adjustment Assistance An addition to the US program of trade adjustment assistance, enacted in 2002, that provides wage insurance for a limited group of older workers.
Amber box The category of subsidies in the WTO that are to be reduced by their being actionable. The term is used primarily in the Agriculture Agreement and includes most domestic support measures that distort production and trade. Also called orange box or yellow box. See box.
Amber Road A very early North-South trade route across Central Europe in which amber was traded. Based on findings such as amber preserved in graves, the trade occurred as early as the Stone Age, supporting the "view that it was owing to the opening of [this] trade that bronze was first introduced into the North" of Europe. [Source]
American Commercial Invasion Term used in Europe to refer to the surge in US manufacturing exports in the late 1800s and early 1900s. [Source]
American Enterprise Institute American Enterprise Institute for Public Policy Research is a think tank doing research and writing on "issues of government, politics, economics, and social welfare," including international economics. Politically, it is somewhat right-of-center, providing a home for US Republicans when not in government. Contrasts with the Brookings Institution.
American Relief Administration A program headed by Herbert Hoover after World War I to provide food and other aid to many countries around the world that had been devastated by the war. [Source]
American selling price 1. Although this phrase could refer to any price for a sale in the United States, it took on specific meaning in the Fordney- McCumber Tariff Act of 1922 which had ad valorem tariffs calculated from the price for which the good was sold in the US by a US company.
2. The policy of using a US price to calculate an ad valorem tariff. The US agreed to abolish this policy in the Kennedy Round. [Source]
American system A national economic plan pushed by Senator Henry Clay of Kentucky in 1832, favoring i) high tariffs (for protection and revenue), ii) a national bank, and iii) federal subisidies for transportation infrastructure. [Source]
American Tariff League An organization about which I'm unable to find much information, but which lobbied, testified, and published in favor of higher tariffs in, at least, the 1930s.
AMF 1. Arab Monetary Fund
2. Asian Monetary Fund
Amicus brief A document filed in a legal proceeding by an interested party who is not directly part of the case. In the WTO an issue has been whether to permit dispute settlement panels to accept such submissions, especially from NGOs.
AMIS Agricultural Market Information System
Amity and Commerce See Treaty of Amity and Commerce
AML Index Basel AML Index
Amortization The deduction of an expense in installments over a period of time, rather than all at once.
Amplitude The extent of the up and down movements of a fluctuating economic variable; that is, the difference between the highest and lowest values of the variable. See destabilizing speculation.
AMS Aggregate measure of support.
Anaconda Plan A military plan for the Union states of the US to defeat the Confederacy. An important piece of the plan was a naval blockade to prevent the southern states form both importing and exporting. [Source]
Analytical technique See technique of analysis.
ANCERTA Australia-New Zealand Closer Economic Relations Trade Agreement. Also ANZCERTA or just CER.
Andean Community An organization (Comunidad Andina) currently (February 2024) of four Andean countries -- Bolivia, Colombia, Ecuador, and Peru -- formed in 1997 out of the Andean Pact (Venezuela ceased membership in 2006). It provides for economic and social integration, including regional trade liberalization and a common external tariff, as well as harmonization of other policies.
Andean Pact The Cartagena Agreement of 1969, which provided for economic cooperation among a group of five Andean countries; predecessor to the Andean Community.
Andean Trade Promotion and Drug Eradication Act US legislation enacted in 2002 authorizing the U.S. president to provide tariff preferences to countries in the Andean region in connection with the effort to curtail production of illegal drugs.
Anglo-American Loan Formally the Anglo-American Financial Agreement, this was a loan from the US to the UK of $3.75 billion repayable over 50 years. Agreed in December 1945, it was ratified by the US Congress in mid-1946. The UK's final payment on the loan was made in December 2006. [Source]
Anglo-American Mutual Aid Agreement An agreement between the United Kingdom and the United States, February 28, 1942, to support each other in multiple ways. It included, in Article VII, "the elimination of all forms of discriminatory treatment in international commerce, and to the reduction of tariffs and other trade barriers." [Source]
Anglo-American Trade Agreement A treaty between the United Kingdom and the United States, signed November 17, 1938, expanding trade. Although its substance expanded access for US exports to the UK at the expense of UK colonies, the intent was to signal greater US-UK cooperation to Hitler. [Source]
Anglo-French Commercial Treaty of 1786 The Eden-Rayneval Treaty of 1786.
Annecy Round The second (1949) of the trade rounds conducted under the auspices of the GATT.
Ante See ex ante.
Anti-competitive Contributing to market power and associated behavior, especially including prices above those that would occur with perfect competition.
Anti-Counterfeiting Trade Agreement A plurilateral agreement signed October 1, 2011, by 8 countries to combat the "proliferation of commercial-scale counterfeiting and piracy" in the realm of intellectual property.
Anti-Dumping Code A plurilateral agreement reached as part of the Tokyo Round governing policies for dealing with dumping.
Anti-dumping duty Tariff levied on dumped imports. The threat of an anti-dumping duty can deter imports, even when it has not been used, and anti-dumping law is therefore a form of nontariff barrier.
Anti-dumping statute A national law providing for the use of anti-dumping duties. Data on their use are provided in the Global Antidumping Database.
Anti-dumping suit A complaint by a domestic producer that imports are being dumped, leading to an anti-dumping duty if both dumping and injury are found in the resulting investigation.
Anti-trust policy U.S. term for competition policy. Both it and its name were motivated by its initial purpose of breaking up trusts.
Antidumping Act of 1916 The US Revenue Act of 1916. It included civil and criminal proceedings against selling imports for "substantially less" than their price abroad for the purpose of "destroying or injuring an industry" in the US. Thus it explicitly targeted predatory dumping. [Source]
Antidumping Act of 1921 Unlike its predecessor, this portion of the Emergency Tariff Act of 1921 allowed anti-dumping duties and did not require that dumping be predatory.
AOA Agreement on Agriculture
APC Average propensity to consume
APEC Asia-Pacific Economic Cooperation
APEC Blueprint for Action on Electronic Commerce An agreement in 1998 by the ministers of the APEC countries that "stipulated targets for achieving, where possible, paperless trading in goods in 2005 for developed economies and 2010 for developing economies or as soon as possible thereafter." [Source]
APEX Agência de Promoção às Exportações
Apostle of protection Term used to describe Utah Republican Senator Reed Smoot, co-author of the Smoot-Hawley Tariff, who was widely regarded as both a capable legislator and the most knowledgeable about the US tariff schedule. [Source]
Apparel Clothing. The apparel sector is important for trade because, as a very labor intensive sector, it is a likely source of comparative advantage for developing countries. See textiles and apparel.
Apparent consumption Production plus imports minus exports, sometimes also adjusted for changes in inventories. The intention here is not to distinguish different uses for a good within the country, but only to infer the total that is used there for any purpose.
Apparent imports An estimate of the amount of imports constructed from consumption plus exports minus production.
Appeal into the void Appeal of a WTO panel decision to the Appellate Body during the time when that body is unable to function due to the US blockage of member appointments. The effect is to delay any adoption of that decision.
Appeasement 1. "Foreign policy of pacifying an aggrieved country through negotiation in order to prevent war." Usually understood to include making various concessions to the foreign power. [Source]
2. See economic appeasement.
Appellate Body The 7-person standing committee of the WTO that reviews decisions of dispute settlement panels and whose decisions are binding unless there is consensus to reject. Members serve staggered 4-year terms and may be reappointed once.
Appellation of origin A geographical indication.
Applied general equilibrium Computable general equilibrium
Applied tariff rate The actual tariff rate in effect at a country's border, which may be lower than the bound tariff.
Appreciate See appreciation.
Appreciation A rise in the value of a country's currency on the exchange market, relative either to a particular other currency or to a weighted average of other currencies. The currency is said to appreciate. Opposite of depreciation.
Appropriate level of protection In the SPS Agreement of the WTO, the acceptable level of risk to health that WTO members are entitled to pursue through SPS measures.
APT ASEAN Plus Three
APTA Asia-Pacific Trade Agreement
ARA American Relief Administration
Arab League Informal name of the League of Arab States.
Arab Monetary Fund A regional organization founded by the Arab League in 1976 to facilitate monetary cooperation, promote trade, and correct payments disequilibria among its 22 (as of February 2024) member states.
Arbitrage 1. A combination of simultaneous transactions designed to profit from an existing discrepancy among prices, exchange rates, and/or interest rates on different markets without risk of these changing. Simplest is simultaneous purchase and sale of the same thing in different markets, but more complex forms include triangular arbitrage and covered interest arbitrage.
2. Regulatory arbitrage
Arc elasticity See elasticity
ARCOS All-Russian Cooperative Society
Argol agreements Agreements under the Dingley tariff act to reduce duties on a list of products if "reciprocal and equivalent concessions" were granted on American exports. The name comes from argol, a crude tartar used in wine making, with which the product list began, apparently alphabetically. [Source]
Argument for protection A reason given (not necessarily a good one) for restricting imports by tariffs and/or NTBs.
ARIC Asia Regional Integration Center
ARIC FTA Database A collection of data on FTAs involving at least one of the Asian Development Bank's signatories.
Arm's length price The price of a product in a transaction between unrelated buyer and seller. Contrasts with transfer price.
Armington assumption The assumption that internationally traded products are differentiated by country of origin. Due to Armington (1969) in an international macroeconomic context, but now a standard assumption of international CGE models, used to generate smaller and more realistic responses of trade to price changes than implied by homogeneous products.
Armington elasticity The elasticity of substitution between products of different countries.
Arrangement on Export Credits A "gentlemen's agreement" among governments of the OECD to limit the generosity of the terms and conditions of export credits that they provide. Coordination began "as far back as 1976" and the text of the arrangement is revised frequently.
Article A specific portion of a negotiated agreement.
Article 16 1. The portion of the League of Nations Covenant that says that members who go to war in violation of other articles will be regarded as ipso facto at war with the rest and subject to sanctions. [Source]
2. The suspension clause of the Northern Ireland Protocol. It allows either party to suspend any part of the agreement that causes "economic, societal or environmental difficulties." What would happen instead is not clear. [Source]
Article 50 The portion of the Lisbon Treaty that permits any member of the European Union to leave it unilaterally, and states the procedure for doing so. Once the process is initiated by the leaving country, there are two years to negotiate the terms of exit.
Article XIX The Safeguards Clause of the GATT.
Article XXIV The article of the GATT that permits countries to form free trade areas and customs unions as exceptions to the MFN principle.
AS-AD The model and/or diagram that determines the level of aggregate economic activity through the interaction of aggregate supply and aggregate demand.
ASEAN Association of Southeast Asian Nations
ASEAN+3 ASEAN Plus Three
ASEAN-4 Indonesia, Malaysia, Philippines, and Thailand [Source]
ASEAN Economic Community Established in 2015, the goal of ASEAN is to become more fully integrated economically by 2025, achieving a single market and other objectives.
ASEAN Free Trade Area A free trade area announced in 1992 among the ASEAN countries that is in the process of being implemented. It does not quite meet the the normal definition of an FTA, however, in that tariffs on imports from members are not necessarily zero, but rather given by the common effective preferential tariff.
ASEAN Plus Six ASEAN augmented to also include the six countries with which ASEAN has FTAs: Australia, China, India, Japan, South Korea, and New Zealand. This group met occasionally to pursue cooperation and recently (November 2020) completed negotiations and signed the agreement to form the RCEP trade agreement.
ASEAN Plus Three The group of countries included in ASEAN augmented to also include China, Japan, and South Korea. Since 1997, this group has met periodically to pursue many areas of cooperation.
ASEAN Way ASEAN's "Unique method of diplomacy ... based on four principles: non-interference, quiet diplomacy, non-use of force, and decision making through consensus." Most important is non-interference: "that member countries do not interfere with internal issues." [Source]
Asia-Pacific Economic Cooperation An organization of countries in the Asia-Pacific region, launched in 1989 and devoted to promoting open trade and practical economic cooperation. As of February 2024, APEC had 21 member countries, the most recent having been added in 1998.
Asia-Pacific Trade Agreement A regional, preferential free trade agreement including seven countries of South and East Asia.
Asia Regional Integration Center A unit of the Asian Development Bank, this is an "ongoing technical assistance project" for the Asian economies. It also maintains the ARIC FTA Database.
Asian Clearing Union ACU "is a payment arrangement whereby the participants settle payments for intra-regional transactions among the participating central banks on a net multilateral basis."
Asian Crisis Asian Financial Crisis
Asian Currency Unit A proposed basket of Asian currencies that might be created as a precursor toward formation of an Asian Currency Union. The intent would be to become comparable to the ECU and the Euro Zone.
Asian Development Bank A multilateral institution based in Manila, Philippines, that provides financing for development needs in countries of the Asia-Pacific region. As of February 2024, ADB reported having 68 member countries, of which 49 were within Asia.
Asian Financial Crisis A major financial crisis that began in Thailand in July 1997 and quickly spread to other East Asian countries.
Asian Infrastructure Investment Bank A multilateral development bank initiated by China in 2014 and became operational January, 2016. The AIIB is focused "on the development of infrastructure and other productive sectors in Asia." As of 2020, it had over 100 approved and prospective members including, in addition to China, many European countries and developing countries, but not the United States or Japan.
Asian Monetary Fund A regional alternative to the IMF that was proposed by financial authorities in Japan in response to the Asian financial crisis of 1997. It was vehemently opposed by the IMF and by financial authorities in both the United States and China and was never pursued.
Asian Tigers The Four Tigers. [Origin]
Asian Trade Centre A think tank in Singapore whose website says it "is the premier regional thought leader, advocate, and educator for trade in Asia" that works "with businesses and governments across the Asia-Pacific to make better trade policy." However, it now (February 2024) also says "The Asian Trade Centre is permanently closed."
Asset An item of property, such as land, capital, money, a share in ownership, or a claim on others for future payment, such as a bond or a bank deposit.
Asset approach A theory of determination of the exchange rate that focuses on its role as the price of an asset. With high capital mobility, equilibrium requires that expected returns on comparable domestic and foreign assets be the same.
Asset bubble See bubble.
Asset position See net foreign asset position.
Assignment problem How to use macroeconomic policies to achieve both internal balance and external balance; specifically, with only monetary and fiscal policies available under fixed exchange rates, which instrument should be "assigned" to which goal? Mundell (1962) showed that monetary policy should be assigned to external balance.
Assimilative capacity The extent to which the environment can accommodate or tolerate pollutants.
Assist A service or other input to production provided by an importer to the foreign exporter, the value of which must be added to the invoice price in calculating its value for customs purposes.
Association Agreement Early predecessor to the Europe Agreements but excluding provision for political dialogue.
Association of Caribbean States A group of 25 countries of the Caribbean that signed a convention in 1994 to foster "consultation, cooperation and concerted action."
Association of Natural Rubber Producing Countries An inter-governmental organization, formed by countries that produce natural rubber to promote the overall interests of the commodity. See international commodity agreement.
Association of Southeast Asian Nations An organization of countries in southeast Asia, the purpose of which is to promote economic, social, and cultural development as well as peace and stability in the region. Starting with five member countries in 1967, it had expanded to its current ten members by 1999.
ASWP Any safe world port. Meaning that the product offered with this designation will be delivered to essentially anywhere in the world.
Asylum The legal protection that may be granted to a refugee in the country to which they move, allowing them to stay if they credibly fear persecution in the country from which they came.
Asymmetric information The failure of two parties to a transaction to have the same relevant information. Examples are buyers who know less about product quality than sellers, and lenders who know less about likely default than borrowers. Both are common in international markets.
Asymmetric politics of trade The birdcage phenomenon.
Asymmetric shock An exogenous change in macroeconomic conditions affecting differently the different parts of a country, or different countries of a region. Often mentioned as a source of difficulty for countries sharing a common currency, such as the Euro Zone.
At par At equality. Two currencies are said to be "at par" if they are trading one-for-one. The significance is more psychological then economic, but the long decline of the Canadian dollar "below par" with the U.S. dollar, and the more recent variation of the euro between above and below par, also with the U.S. dollar, have been cause for concern.
At PPP Measured using PPP exchange rates rather than nominal exchange rates, and thus comparing in terms of real purchasing power.
At sight See payment at sight.
ATAA Alternative Trade Adjustment Assistance
ATC Agreement on Textiles and Clothing
Atlantic Charter An agreement between US President Roosevelt and UK Prime Minister Churchill released on August 14, 1941, spelling out eight "common principles" that would be adhered to after World War II (which the US was not yet in). These included liberalization of international trade.
Atlantic Council An organization based in Washington, DC, that seeks to promote leadership and engagement in international affairs.
Atlas Method The method used by the World Bank for comparison of national incomes (GNI or GNP) across countries. It essentially uses nominal exchange rates averaged over three years with adjustment for inflation in both countries. Contrasts with the PPP method. [Origin]
ATPDEA Andean Trade Promotion and Drug Eradication Act
Attrition The decline in employment in a firm or industry that occurs naturally due to workers' quitting or retiring. The pain of shrinking an industry due, say, to trade liberalization is minimized if it can be accomplished through attrition. In the UK, attrition is called natural wastage.
AU African Union
Auction quota An import quota that is allocated by selling the rights to the highest bidder. The auction price then provides a market-determined measure of the quota's ad valorem equivalent.
AUKUS "An enhanced trilateral security partnership called 'AUKUS'" -- Australia, UK and US, agreed in September 2021. Most newsworthy was for the US and UK to provide nuclear-powered submarine capability to Australia, thus cancelling a previous order for non-nuclear submarines from France.
Australia-New Zealand Closer Economic Relations Trade Agreement A free trade agreement formed in 1983 between Australia and New Zealand. Said to be one of the most comprehensive bilateral free trade agreements in the world, it was also the first to include trade in services. Identified as ANCERTA, ANZCERTA, or CER.
Autarchia 1. Italian for autarky
2. The policy strategy announced by Mussolini in November 1935 to resist sanctions by achieving self-sufficiency in food and reducing need for imports of textiles, coal, and oil. [Source]
Autarkic Associated with the situation of autarky.
Autarky The situation of not engaging in international trade; self-sufficiency. (Not to be confused with "autarchy," which in at least some dictionaries is a political term rather than an economic one, and means absolute rule or power.)
Autarky equilibrium In a model of an economy, the configuration of prices and quantities at which quantities supplied and demanded within the economy are equal, so that no trade would take place even if it were permitted.
Autarky price Price in autarky; that is, the price of something within a country when it is not traded by that country. Relative autarky prices turn out to be the most theoretically robust (but empirically elusive) measures of comparative advantage.
Authors' rights Copyright (term used primarily in Latin America)
Auto Pact See Canada-US Auto Pact.
Automated Commercial Environment ACE is an online system developed by U.S. Customs and Border Protection to process international trade.
Automatic licensing The licensing of imports or exports for which licenses are assured, for the purpose of gathering information, or as a holdover from when licenses were not automatic. Depending on how the licensing is administered, automatic licensing can add to the bureaucratic and/or time cost of trade.
Automatic stabilizer An institutional feature of an economy that dampens its macroeconomic fluctuations, e.g., an income tax, which acts like a tax increase in a boom and a tax cut in a recession.
Automaticity The feature of the WTO dispute settlement mechanism whereby panel reports are adopted automatically unless blocked by a unanimous vote of the membership (but then are subject to review by the Appellate Body). Under the prior GATT, unanimity was required to adopt, rather than reject, panel reports.
Autonomous Refers to an economic variable, magnitude, or entity that is caused independently of other variables that it may in turn influence; exogenous.
Autonomous consumption That portion of consumption that is autonomous. For example, if the consumption function has the form C=C0+cY, where C0 and c are parameters and Y is income, then C0 may be called autonomous consumption. An increase in autonomous consumption then represents an upward shift in the consumption function.
Autonomous transaction In the balance of payments, a transaction that is not itself a result of actions taken officially to manage international payments; in contrast with accommodating transaction.
Availability theory A theory of the determinants of international trade, due to Kravis (1956), that says that countries import what they do not have available domestically and export what they do. The theory can be said to encompass explanations of trade that stress factor endowments, technological differences, and product differentiation.
AVE Ad valorem equivalent
Average cost Total cost divided by output.
Average product The average product of a factor in a firm or industry is its output divided by the amount of the factor employed.
Average propensity The fraction of total income spent on an activity, such as consumption or imports. See propensity.
Average propensity to consume The fraction of total (or perhaps disposable) income spent on consumption. Contrasts with marginal propensity to consume.
Average propensity to import The fraction of total income spent on imports; thus the ratio of imports to GDP. Contrasts with marginal propensity to import.
Average tariff An average of a country's tariff rates. This can be calculated in several ways, of which none are ideal for representing how protective the country's tariffs are. Most common is the trade-weighted average tariff, which under-represents prohibitive tariffs, since they get zero weight.
Average tax rate The amount paid as tax as a fraction of the amount being taxed. In the case of an income tax, the total amount of tax as a fraction of total income. Contrasts with marginal tax rate.