-------------- M -------------- MACHINE TOOLS. See Capital Goods. MACROECONOMICS. That part of economics that is primarily concerned with the study of relationships between broad economic aggregates, such as national income, savings, investment, consumption, employment, the money supply, the average price level, exports, imports and the balance of payments. See also Market Forces; and Microeconomics. MAN-MADE FIBERS. See Multi-Fiber Arrangement Regarding International Trade in Textiles; Sensitive Products; and Textiles. MANAGED TRADE. Attempts by governments at the national or international level to influence or control exports and imports, based on the presumption that government perspectives are more likely to ensure "optimal" trade in some sense than would result from reliance on unmanaged market forces. "Managed trade" at the national level often reflects the political influence of protectionist elements in an economy. The term may also describe buffer stock and price stabilization arrangements, such as STABEX or the Integrated Program for Commodities. See also Industrial Policy; Integrated Program for Commodities; Lome Convention; Market Forces; MITI; and Protectionism. MANAGEMENT. The organization and coordination of an enterprise. The manager who conducts or supervises production for example, may be a paid expert in administration, as opposed to the entrepreneur who originally conceived the operation and took the risk in mounting it. In modern corporations, management and control tend to be separate from ownership, which is vested in the stockholders. See also Entrepreneur; Microeconomics; Production; Profit; and Risk. MANUFACTURING PROCESSES. See also Production; and Property. MARGIN OF PREFERENCE. The difference between the duty payable under a given system of tariff preferences and the duty that would be assessed in the absence of preferences. See also Generalized System of Preferences; Preferences; Special and Differential Treatment; and Tariff. MARKET. The area within which buyers and sellers interact to effect economic exchanges. The estimated or realized demand for a good or service may also be referred to as its "market." See also Demand; Distribution; Market Economy; Monopoly; Production; Purchasing Power; Supply; and Trade Fair. MARKET ACCESS. The ability of domestic providers of goods and services to penetrate a related market in a foreign country. The extent to which the foreign market is accessible generally depends upon the existence and extent of trade barriers. See also Market; Market Forces; Non-Market Economy; Offer List; Restrictive Business Practice; and Special and Differential Treatment. MARKET DISRUPTION. The situation that occurs when a surge of imports of a particular product causes a precipitous decline in sales of similar domestically produced goods. See also Dumping; Escape Clause; Multi-Fiber Arrangement Regarding International Trade in Textiles; Orderly Marketing Agreements; Safeguards; Sensitive Products; and U.S. International Trade in Commission. MARKET ECONOMY. A national economy of a country that relies heavily upon market forces to determine levels of production, consumption, investment and savings without government intervention. See also Demand; Market Forces; Macroeconomics; Non-Market Economy; Price; Private Sector; Profit; and Supply. MARKET FORCES. Shifts in demand and supply that are reflected in changing relative prices, thus serving as indicators and guides for enterprises that make investment, purchase and sales decisions. See also Demand; Macroeconomics;Managed Trade; Market Access; Microeconomics; Non-Market Economy; Price; Private Sector; and Supply. MARSHALL PLAN. See European Recovery Program. MEDIUM OF EXCHANGE. Documentary instrument used in commercial transactions between buyers and sellers to measure the value of the goods exchanged. The value of such instruments is usually expressed in terms of a national currency, such as the U.S. dollar. See also Bill; Currency; Markets; and Money. MERCANTILISM. A prominent economic philosophy in the 16th and 17th centuries that equated the accumulation and possession of gold and other international monetary assets, such as foreign currency reserves, with national wealth. Although this point of view is generally discredited among 20th-century economists and trade policy experts, some contemporary politicians still favor policies designed to create trade "surpluses," such as import substitution and tariff protection for domestic industries, as essential to national economic strength. See also Balance of Trade; Currency; Import Substitution; Industrial Policy; and Protectionism. MERCANTILIST. A person who believes in or advocates mercantilism. See also Mercantilism. MERCHANDISE EXPORTS AND IMPORTS. See Balance of Trade; and Current Account. MFA. See Multi-Fiber Arrangement Regarding International Trade in Textiles. MFN. See Most-Favored-Nation Treatment. MICROECONOMICS. That part of economics that is primarily concerned with the study of individual decision makers, including consumers, entrepreneurs and firms, the way in which, their decisions interrelate to determine relative prices of goods and factors of production, and the quantities of these that will be bought and sold. See also Consumers; Entrepreneurs; Macroeconomics; Management; Market Economy; Monopoly; Price; and Private Sector. MIGA. See Multilateral Investment Guarantee Agency. MINIMUM VALUATION. Customs valuation of certain low-cost items at a higher-than-actual value. See also Customs; Customs Valuation Code; and Valuation. MITI. A frequently used acronym designating Japan's Ministry of Trade and Industry, which has adopted, for some years, a comprehensive economic growth and development strategy, centering on export expansion. See also Export Promotion; Exports; Industrial Policy; and Managed Trade. MIXED CREDITS. A financing package that involves official government credit to supplement normal commercial credit,thus enabling an exporter to deliver goods to a buyer in another country on credit terms comparable to those of his competitors. See also Competitive; Credit; Exports; and International Arrangement on Export Credits. MIXED ECONOMIES. See State Trading Nations. MIXED TARIFF. See Compound Tariff. MNC. See Multinational Corporation. MONETARY AND FINANCIAL CONFERENCE. See Bretton Woods Conference. MONEY. Any medium of exchange that is widely accepted in payment for goods and services or to settle debts.Money also serves as a standard of value for measuring the relative worth of different goods and services and as a means of storing wealth. The number of units of money required to buy a commodity is its price. Without money, trade would be reduced to barter. The "real" value of money declines during inflationary periods. See also Barter; Capital; Credit; Currency; Inflation; Medium of Exchange; Price; Purchasing Power; and Value. MONOPOLY. The condition that exists in a market when a single supplier controls the preponderant supply of a product to such an extent that it can set quantity and prices for maximum profitability with little or no regard for the pressures of demand and supply that operate in competitive economic markets. A high tariff or non-tariff barrier to imports can give a non-competitive producer a monopoly position for a particular product within a domestic market. See also Antitrust; Cartel; Competitive; Market; Microeconomics; Price; Protection; and Supply. MONTREAL MINISTERIAL. The mid-term review of progress in the Uruguay Round was held in Montreal, Canada, in December 1988. During the ministerial meeting, frameworks for completing the negotiations were agreed in 11 out of the 15 negotiating areas, with no agreement reached on frameworks for agriculture, intellectual property, textiles and safeguards. See also Montreal Protocol; and Uruguay Round. MONTREAL PROTOCOL. A multilateral agreement negotiated in 1988 to reduce and eventually eliminate the use of chlorofluorocarbons and halogens so as to prevent erosion of the ozone layer. The agreement is noteworthy for allowing the use of trade sanctions to enforce its provisions. See also Montreal Ministerial; and Uruguay Round. MOST-FAVORED-NATION TREATMENT (MFN). The policy of non-discrimination in trade policy that provides to all trading partners the same customs and tariff treatment given to the so-called "most-favored-nation." This fundamental principle was a feature of U.S. trade policy as early as 1778. Since 1923 the United States has incorporated an "unconditional" most-favored-nation clause in its trade agreements, binding the contracting governments to confer upon each other all the most favorable trade concessions that either may grant to any other country subsequent to the signing of the agreement. The United States now applies this provision to its trade with all of its trading partners except for those specifically excluded by law. The MFN principle has also provided the foundation of the world trading system since the end of World War II. All Contracting Parties to GATT apply MFN treatment to one another under Article I of GATT. See also Column 1 Rates; Concession; Conditional Most-Favored-Nation Treatment; Customs; Discrimination; Enabling Clause; General Agreement on Tariffs and Trade; Principal Suppliers; Reciprocity; Tariff; and Trade Agreements Act of 1934. MTN. See Multilateral Trade Negotiations. MTO. See Multilateral Trade Organization. MULTI-FIBER ARRANGEMENT REGARDING INTERNATIONAL TRADE IN TEXTILES (MFA). An internationally agreed derogation from GATT rules that allows an importing signatory country to apply quantitative restrictions on textile imports when it considers them necessary to prevent market disruption, even when such restrictions would otherwise be contrary to GATT rules. The objective of the MFA is to reconcile the interests of textiles-exporting and textiles-importing countries by permitting an orderly expansion of trade while avoiding market disruption. But the global system of bilateral textile and apparel quotas that comprise the MFA is scheduled to come to an end. Under the Uruguay Round agreement, countries agreed to eliminate the MFA quotas in phases to begin July 1, 1995 and to end July 1, 2005. At the end of the 10-year transition period rules on textile trade will be fully integrated into those of the World Trade Organization being set up under the Uruguay Round accord. All countries that are signatories to the Uruguay Round accord will be subject to the new textile agreement whether or not they were signatories to the MFA. MFA rules provide that quantitative restrictions should not reduce imports to levels below those attained during the preceding year, and should, if continued, permit trade to expand by specified percentages. Since an importing country may impose such quotas unilaterally to restrict rapidly rising textiles imports, most important textiles-exporting countries consider it advantageous to enter into bilateral agreements with the principal textiles-importing countries. The MFA went into effect on January 1, 1974, was renewed in December 1977,in December 1981, again in July 1986 and most recently in July 1991. The MFA succeeded the Long Term Agreement on International Trade in Cotton Textiles ("The LTA"), which had been in effect since 1962. Whereas the LTA applied only to cotton textiles, the MFA also applies to wool, man-made (synthetic) fiber, and silk blend and vegetable fiber textiles and apparel products. See also Bilateral Trade Agreement; General Agreement on Tariffs and Trade; Market Disruption; Quantitative Restrictions; Sensitive Products; and Textiles. MULTINATIONAL CORPORATION (MNC). A large commercial organization with affiliates operating in a number of different countries. Sometimes referred to, especially in the United Nations, as a transnational corporation. See also Euro-dollars; and Subsidiary. MULTILATERAL. Having a number of participating "sides," or countries. See also Bilateral; and Unilateral. MULTILATERAL AGREEMENT. An international compact involving three or more parties. For example, GATT has been, since its establishment in 1947, seeking to promote trade liberalization through multilateral negotiations. See also Codes of Conduct; General Agreement on Tariffs and Trade; Liberalization; Multilateral Trade Negotiations; and Negotiations. MULTILATERAL AID. Development assistance given by donors to recipient countries through international institutions. See also Bilateral Aid; and Official Development Assistance. MULTILATERAL INVESTMENT GUARANTEE AGENCY (MIGA). The Multilateral Investment Guarantee Agency began operations in April 1988. As part of the World Bank Group, MIGA was formed to encourage the flow of private foreign investment to its member developing countries by providing insurance against non-commercial risks, and by providing promotional and advisory services. MIGA's guarantee program protects investors against losses from currency transfer, expropriation, war, and civil disturbance, and investment-related breach of contract by host governments. MIGA works in close cooperation with the World Bank, the International Development Association, and the International Finance Corporation to promote sound investment policies, thereby assisting developing countries in creating attractive investment environments for private foreign direct investment. See also International Development Association; International Finance Corporation; and World Bank. MULTILATERAL SAFEGUARD SYSTEM. See Safeguards. MULTILATERAL TRADE NEGOTIATIONS (MTN). Eight Rounds of "Multilateral Trade Negotiations" have been held under the auspices of GATT since 1947. Each Round represented a discrete and lengthy series of bargaining sessions among the participating Contracting Parties in search of mutually beneficial agreements aimed at the reduction of barriers to world trade. The agreements ultimately reached at the conclusion of each Round became new GATT commitments and thus amounted to important steps in the evolution of the world trading system. The acronym "MTN" most frequently refers to the Tokyo Round. See also Dillon Round; Kennedy Round; Multilateral Trade Organization; Negotiations; Reciprocity; Round; Tokyo Round; and Uruguay Round. MULTILATERAL TRADE ORGANIZATION (MTO). Umbrella organization, replacing GATT, to oversee implementation of the Uruguay Round results. Also known at the World Trade Organization (WTO) or International Trade Organization (ITO). See also Multilateral Trade Negotiations; Uruguay Round; and World Trade Organization. MUTUALITY OF BENEFITS. See Reciprocity. MUTATIS MUTANDIS. Phrase signifying "the necessary changes having been made"; "substituting new terms."