Mustapha Gbassa
ECO 490-GS001
Written Assignment #6

How can trade liberalization exist on a nondiscriminatory basis versus a discriminatory basis? What are some examples of each?

Trade liberalization is the removal or reduction of trade barriers to promote international trade. It can exist on a nondiscriminatory basis such as with the WTO, who requires that the participating nations provide tariff reductions to all other members when giving one nation a reduction. It can exist on a discriminatory basis when there is a formation of regional trading agreements, this lowers the trade barriers of only the regional group and excludes the rest of the world.

Why has the so-called common agricultural policy been a controversial issue for the European Union?
The Common Agricultural Policy (CAP) is a system of European Union agricultural subsidies and programs. It represented 46.7% of the EU's budget, €49.8 billion in 2006.The CAP combines a direct subsidy payment for crops and land which may be cultivated with price support mechanisms, including guaranteed minimum prices, import tariffs and quotas on certain goods from outside the EU.
Criticism of the CAP has united some supporters of neoliberal globalization with the alter-globalization movement in that it is argued that these subsidies, like those of the USA and other Western states, add to the problem of what is sometimes called Fortress Europe; the West spends high amounts on agricultural subsidies every year, which amounts to unfair competition.
To perpetuate the viability of European agriculture in its current state, the CAP-mandated demand for certain farm products is set at a high level compared with demand in the free market (see CAP as a form of State intervention). This leads to the European Union purchasing millions of tons of surplus output every year at the stated guaranteed market price, and