chapter 6 part 2

Mexico overtook Canada and China to become

top market for U.S. agricultural exports

top 5 U.S. agricultural trading partners

china

mexico

canada

european union

japan

Destinations for U.s. agricultural exports have

shifted over the last 25 years

influence of export program

major influence on farm prices and income

exports are growing but still a relatively small segment of U.S. food marketing system

effects of exchange rates

the rate of trading one currency for another s

strong dollar

make U.s. exports more expensive for foreign buyers and u.s. imports are cheaper for american consumers

weak dollar

makes u.s. exports cheaper for foreign buyers which can increase demand for american goods in international markets

causes for shifts in export demand

weather

exchange rates

changes in trade barriers

competitive imports

imported items that are also produced domestically

beef , wheat, milk

complementary imports

imported items that we can hardly produce at all

bananas, tea

absolute advantage

producer has absolute advantage over another in producing a good or service if a country can produce that product using few resources

comparative advantage

producer has a comparative advantage over another in producing a good or service if the producer can produce that products at a lower opportunity cost

international markets

more gov. involvement

more raw/bulk commodities than differentiated products

more erratic demand

fluctuations in foreign currencies affect demand

reasons for trade barriers

stop dumping

support farm incomes

promote self-sufficiency

manage the national economy

stabilize an industy

protect infant industry

use as political weapon

nontariff barriers

production subsidies

complex import documentation, customs, inspections, burdensome customs procedures

packing and labeling regulation

export controls

restraints by price mechanism

organizations to increase free trade

WTO , CAFTA, USMCA