Why+Nations+Trade

declinar (verbo) || to gradually become less, worse, or lower || Some reasons why nations trade are: **First.** Nations can´t be cultivate some products for reasons like bad climate or because the ground doesn´t have specific conditions that are needed. **Second.** There are people specialized in kinds of works more than others so the nations try to find people who can do better the job. **Third.** Trade allows having variety of goods, like new technology that can help to produce more goods in less time. **Advantages and Disadvantages of protectionism ** **Protectionism’s Advantages.** First if a new enterprise is entering the market the competition in other nations could break down the possibilities of growth and even affect the surviving of the enterprise. Other, is that if other firm is selling a product in fewer prices this could affect the local firms so is necessary putting tariffs and quotas to protect from unfair competition. A third advantage can be for example, if a country has more exports than imports, is good to the nation so the protectionism reduce the imports by adding tariffs. There are other advantages like protection manufacturing goods and declining industries to give more unemployment. **The main disadvantages of protectionism are: **
 * **Word** || **Spanish equivalent** || **English meaning** ||
 * 1.expertise ||= experiencia, pericia, habilidad || a high level of knowledge or skill ||
 * 2.surplus || excedente, superavit || (an amount which is) more than is needed ||
 * 3.encourage || fomentar, estimular || to make someone more likely to do something, or to make something more likely to happen ||
 * 4. raise || aumentar, levantar || to lift something to a higher position ||
 * 5.labour || mano de obra || all the effort and hard work that have been involved in doing a particular piece of work ||
 * 6. benefit || beneficiar (verbo) || a helpful or good effect, or something intended to help ||
 * 7. decline || descenso, disminucion(sustantivo)
 * 8. retaliate || tomar represalias, contraatacar || to hurt someone or do something harmful to them because they have done or said something harmful to you ||
 * 9. prevent || impedir, evitar || <span class="def parentof__def__is__sense_b">to stop something from happening or someone from doing something ||
 * 10. restrict || limitar, restringir || <span class="def parentof__def__is__sense_b">to limit the movements or actions of someone, or to limit something and reduce its size or prevent it from increasing ||
 * 11. customs || aduana || <span class="def parentof__def__is__sense_b"> a department which collects taxes, especially on goods leaving or entering the country ||
 * 12. delay || demorar, retrasar || <span class="def parentof__def__is__sense_b">to make something happen at a later time than originally planned or expected ||

**<span style="font-family: 'Century Gothic',sans-serif; font-size: 12pt;">First. **<span style="font-family: 'Century Gothic',sans-serif; font-size: 12pt;"> The local firms are being protected and they are competing on price not the quality. **Second.** The artificial protection can work well for the products inside the country while it is of new use when the products will be exported; it’s a false sense of security. **Third.** The consumers will be denied an easy access to high quality products. **Fourth.** It is against the principle of free markets.

**//<span style="font-family: 'Century Gothic',sans-serif; font-size: 12pt;">Tariff //**<span style="font-family: 'Century Gothic',sans-serif; font-size: 12pt;"> is a tax placed on imported goods. Each country has separate tariff regulations. The five main types of tariffs include revenue, ad valorem, specific, prohibitive and protective. Except in all but the rarest of instances, tariffs hurt the country that imposes them, as their costs outweigh their benefits. Tariffs are a boon to domestic producers who now face reduced competition in their home market. The reduced competition causes prices to rise. The sales of domestic producers should also rise, all else being equal. The increased production and price causes domestic producers to hire more workers which causes consumer spending to rise. The tariffs also increase government revenues that can be used to the benefit of the economy. There are costs to tariffs, however. Now the price of the good with the tariff has increased, the consumer is forced to either buy less of this good or less of some other good. The price increase can be thought of as a reduction in consumer income. Since consumers are purchasing less, domestic producers in other industries are selling less, causing a decline in the economy. Generally the benefit caused by the increased domestic production in the tariff protected industry plus the increased government revenues does not offset the losses the increased prices cause consumers and the costs of imposing and collecting the tariff. **//<span style="font-family: 'Century Gothic',sans-serif; font-size: 12pt;">Quotas //**<span style="font-family: 'Century Gothic',sans-serif; font-size: 12pt;">are restrictions on the maximum amount that may be imported, and have a similar effect as do tariffs. They restrict the amount available to domestic consumers and push up the price, resulting in a deadweight loss similar to that of a tariff. The main difference is the distribution of the surplus. A tariff raises revenue for the government, whereas import quota creates surplus for licence holders. The government could capture surplus from import quotas by charging a fee for the licences. If licence fee equals difference in prices, then import quota works same as tariffs. <span style="font-family: 'Century Gothic',sans-serif; font-size: 12pt;">It can be auctioned off to the highest bidder - In this case, the revenue goes to the government and the result is exactly like that of an equivalent tariff. It can distribute quota without payments - The extra surplus goes to those who get the quota, and may lead to large expenses for lobbying the government for the quotas. In this case, the deadweight loss is usually larger than a tariff due to cost of lobbying.
 * <span style="font-family: 'Century Gothic',sans-serif; font-size: 12pt;">How is the quota distributed? **

**<span style="font-family: 'Century Gothic',sans-serif; font-size: 14pt;">Venezuela- Tariffs and quotas ** <span style="font-family: 'Century Gothic',sans-serif; font-size: 12pt;">Customs duties are levied based on the Andean Pact's common external tariff (CET), divided among 4 rates: 5%, 10%, 15%, or 20%. At the government's discretion, export duties may also be levied. Transit duties are required on certain goods, including hides, cocoa, coffee, and cotton. The government may also increase duties on items coming in from certain countries; in addition, it may establish import quotas or subject imports to licensing to protect domestic industry. <span style="font-family: 'Century Gothic',sans-serif; font-size: 12pt;">In 1967, Venezuela joined the Latin American Free Trade Association (LAFTA), which became the Latin American Integration Association (LAIA) in 1981. The ad valorem duty system was adopted in 1973 to harmonize Venezuela's tariff structure with that of the other members of the Andean Pact. The average tariff rate is 10% except for automobiles, which carry a duty of 35%. Venezuela has three free trade zones: the Isla de Margarita, the Paraguaná Peninsula Industrial Zone, and the Port of La Guaira. <span style="font-family: 'Century Gothic',sans-serif; font-size: 12pt;">After several years of negotiations, the Group of Three (Colombia, Mexico, and Venezuela) signed a free trade agreement in Cartagena. The agreement went into effect at the beginning of 1995 and commits the countries to lifting most trade restrictions by 2007. In 1995, Venezuela also implemented the Andean Pact with Colombia and Ecuador that established common external tariffs. Venezuela also has a preferential agreement with the Caribbean Common Market (CARICOM), which started tariff reductions in 1998. Venezuela also has a free trade accord with the Southern Cone Common Market (MERCOSUR).