International Trade Principles and Economic Dynamics

Comparative and Absolute Advantage in Trade

1. According to Adam Smith, there would not be trade because Kazakhstan has an absolute advantage in both products. However, taking into account David Ricardo's comparative advantage:

Summarizing: ... will specialize in... and sell it to... and...

Impact of Trade Restrictions on Stakeholders

2.

• Domestic Producers: They will be better off; the quantity produced increases, as does the price.
• Domestic Consumers: They will be worse off; they will consume smaller quantities bought at higher prices.
• State (Government): They will be better off or not, depending on how licenses are sold.
• Overall Country: The country will experience a deadweight loss.

Most Favored Nation Clause and GATT Article XXIV

3. Indeed, it does contradict the Most Favored Nation (MFN) clause, which establishes equal trade advantages among states in international trade. This is an exception and is possible because of Article XXIV of GATT, which allows Customs Unions and Free-Trade Areas. That is the case with the EU and its special agreements among members.

Evolution from GATT to the WTO

4. The GATT (General Agreement on Tariffs and Trade) was a multilateral agreement regulating international trade up to 1995, when the WTO (World Trade Organization) replaced it. Both have the same objectives, but the most important differences are:

• GATT was an agreement, while the WTO is an institution.
• GATT regulated only the trade in goods, whereas the WTO regulates trade in goods, services, and intellectual property rights.

Human Capital and Diaspora Contributions

6RS. Return of Emigrants to Their Source Country

The return of emigrants is one sure way to cultivate human capital for source countries, especially when there is value added from working abroad. Permanent return tends to be the focus of most such policies.

Resourcing Expatriates (Diaspora Options)

Skilled emigrants abroad can be a significant resource, especially if ongoing contact between academic and private sector institutions is fostered. Government and private sector initiatives seek to increase communications, knowledge transfer, remittances, and investment.

Arbitrage and Foreign Exchange Markets

8. iPhone Market

Buying iPhones in the USA and selling them in the UK: Demand for iPhones increases in the USA and supply increases in the UK. Prices in the USA would be higher and in the UK lower(?).

Foreign Market

This increases the demand for $ (USD) and increases the supply of pounds (GBP). The consequence is the appreciation of the dollar and the depreciation of the pound.

Foreign Direct Investment and International Reserves

9. A Japanese company acquires an Italian company with the objective of controlling a part of it for... Does this cause international reserves to increase or decrease?