International economic relations

In a globalising world flows of goods, labour, capital and technology between countries are growing; big companies operating in several countries become transnational corporations. Ideally the world market should be an open competitive market like a domestic one, but many states set barriers to protect national producers. A tariff (customs duty) is a payment on an imported good crossing the border; it raises the import price and also brings money to the budget; a quota is an upper limit on the volume of imports or exports; a licence is a special permit to bring a good in or take it out. This policy of restriction is called protectionism, and its opposite is the liberalisation of foreign trade, that is, lowering barriers. Protection may be useful temporarily, but it can provoke counter-measures so that both sides lose, and prices rise for consumers. To regulate trade by agreement, GATT was created in 1947, and since 1995 the World Trade Organization (WTO) works in its place; the European Union removed trade barriers between its members, and ASEAN is an association of Southeast Asian countries (the 6 members in the book are outdated: it had 10 members for many years, and Timor-Leste became the 11th in 2025). Uzbekistan is a WTO observer negotiating membership; as of 2025 it is not yet a WTO member.