International Trade Agreements

Rybczynski Theorem This theorem is a property of the Heckscher-Olin Model, stating that, at constant prices, an increase of factor endowments will facilitate an increase in the production in an industry which uses that factor intensely. (i.e. Newly discovered caches of diamonds in South Africa would lead to increased diamond exportation. This could lead to less productivity in other industries. Suppose that due to a fixed level of employable people the diamond mines paid …

…an EEC country and an outside country, would concern the entire EEC. NAFTA would only apply to member nations not outside trading partners. This would mean that a dispute between Mexico and France would include the involvement of all the EEC countries, but not the United States or Canada. Conversely, a trade dispute between Mexico and the United States would not directly affect Canada except in a third party sense in the case of precedent.