WTO/GATT

a. Visit the home page of the World Trade Organisation. What is the primary function of this organisation?
b. What is the GATT? Discuss the economic rationale for agreements such as the GATT.

Free Trade Area of the Americas

Visit the home page of the Free Trade Area of the Americas.
a. Describe the proposal for a Free Trade Area of the Americas.
b. What is the relationship between the proposed Free Trade Area of the Americas and NAFTA?
c. Based on the discussion in this chapter of your text, discuss how the creation of a Free Trade Area might result in both trade diversion and trade creation. Why is trade diversion a less efficient outcome?

Mexico's Balance of Payments

Read the discussion of the economic trends and outlook for the Mexican economy.
a. How has NAFTA affected the volume of Mexico's trade with the U.S.?
b. According to this report, why did Mexico begin running a trade deficit in 1988?
c. Why would a devaluation of the currency reduce a trade deficit?
d. Explain why an economic recovery in Mexico would lead to a reduction in Mexico's trade surplus.