Click to edit Master subtitle style World Economy: Free Trade and Free Trade Agreements Daniele S. Longo Vice President, Business Growth, Healthcare Solutions, International Affairs Northern Kentucky Chamber of Commerce Northern Kentucky International Trade Association
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Click to edit Master subtitle style World Economy: Free Trade and Free Trade Agreements Daniele S. Longo Vice President, Business Growth, Healthcare Solutions,
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Click to edit Master subtitle styleWorld Economy:Free Trade and Free Trade Agreements
Daniele S. LongoVice President, Business Growth, Healthcare Solutions, International Affairs
Northern Kentucky Chamber of CommerceNorthern Kentucky International Trade Association
3/14/11
Agenda
• Customs and Duties – Background
• The Importance of Free Trade
• U.S. Free Trade Agreements – Facts and Figures
• Resources
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Customs and Duties - Background
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Customs and Duties - Background
- After declaring its independence in 1776, the U.S, almost in bankruptcy, needed revenues.
- President George Washington, with the Tariff Act of July 4, 1789, authorized the collection of duties on imported goods.
- The Act was called "the second Declaration of Independence".
- Four weeks later, on July 31, the fifth act of Congress established Customs and its ports of entry.
- For nearly 125 years, Customs funded virtually the entire government, and paid for the nation's early growth and infrastructure.
- By 1835, Customs revenues alone had reduced the national debt to zero!
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Examples:
• Purchase of Louisiana, Oregon, Florida and Alaska;
• National Road from Cumberland, Maryland, to Wheeling, West Virginia;
• Transcontinental Railroad;
• Lighthouses;
• U.S. military and naval academies;
• City of Washington.
Examples:Purchase of Louisiana, Oregon, Florida and Alaska;National Road from Cumberland, Maryland, to Wheeling, West Virginia;Transcontinental Railroad;Lighthouses; U.S. military and naval academies;
City of Washington.
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• Most of the rates of the revenue tariff were between 5 and 10 percent, depending on the value of the item.
• Secretary of Treasury Alexander Hamilton was anxious to establish the tariff as a regular source of government revenue and to encourage the growth of domestic manufacturing to lessen America's then-heavy dependence on foreign-made products.
• Still a source of revenue (over $16.00 return) to the taxpayer for every dollar appropriated by Congress.
• U.S. Customs Service was the parent or forerunner to many other agencies
• Administration of military pensions (Department of Veterans Affairs); • Collection of import and export statistics (Bureau of Census); • Supervised revenue cutters (U.S. Coast Guard);• Collected hospital dues to help sick and disabled seamen (Public Health Service);
• Established standard weights and measures (National Bureau of Standards).
•Most of the rates of the revenue tariff were between 5 and 10 percent, depending on the value of the item.Secretary of Treasury Alexander Hamilton was anxious to establish the tariff as a regular source of government revenue and to encourage the growth of domestic manufacturing to lessen America's then-heavy dependence on foreign-made products.Still a source of revenue (over $16.00 return) to the taxpayer for every dollar appropriated by Congress.U.S. Customs Service was the parent or forerunner to many other agenciesAdministration of military pensions (Department of Veterans Affairs); Collection of import and export statistics (Bureau of Census); Supervised revenue cutters (U.S. Coast Guard);Collected hospital dues to help sick and disabled seamen (Public Health Service);Established standard weights and measures (National Bureau of Standards).
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• When shipments of goods arrive at a border crossing or port, customs officers:• Inspect the contents;
• Charge a tax according to the tariff formula.
• Since the goods cannot continue on their way until the duty is paid, it is the easiest duty to collect, and the cost of collection is small.
•When shipments of goods arrive at a border crossing or port, customs officers:Inspect the contents;Charge a tax according to the tariff formula.
Since the goods cannot continue on their way until the duty is paid, it is the easiest duty to collect, and the cost of collection is small.
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The Importance of Free Trade
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The Importance of Free Trade
Definition:• Unilateral or bilateral treaty between two or more
countries allowing commerce in goods and services without tariffs.
• Examples:• NAFTA• CAFTA• EU
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The Importance of Free Trade
• Free Trade Agreements – Unite States
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The Importance of Free Trade
• Free Trade Agreements – European Union
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The Importance of Free Trade
United States
European Union
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• Example : Turkey• Population: 77M• Age 15-65: 66%• PPP: $12,300• Imports:
FTAs: EU, Macedonia, Croatia, Bosnia-Herzegovina, Tunisia, Morocco, the Palestinian Authority, Syria, Egypt, Georgia and Albania
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Importance of Free Trade
Price=Sale Price +Tariff Price=Sale Price
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U.S. free trade Agreements
Facts and Figures
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U.S. FTAs – Facts and Figures
• Trade agreements • Help open markets.• Expand opportunities for American workers and businesses.• Help companies enter and compete more easily in the global
marketplace.• Promote fair competition • May include