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International Trade

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Exam: Concepts from Student Presentation Security Council Reform Why is SC reform on the UN agenda? Which four countries are considered for permanent membership? – PowerPoint PPT presentation

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Title: International Trade


1
International Trade
2
Exam Concepts from Student Presentation
  • Security Council Reform
  • Why is SC reform on the UN agenda?
  • Which four countries are considered for permanent
    membership?
  • CEDAW Convention Is the US a signatory? Why?
    Role in Womens Rights Issues
  • ICC When was it established?
  • What kind of crimes does it prosecute?
  • Is the US a party and why? Are EU countries
    parties?
  • Similarities and differences with tribunals
    (Yugoslavia, Rwanda)
  • Terrorism policy options for dealing with
    international terrorism pros and cons of each

3
Political Economy
  • Studies the relationship between economics and
    politics (Gilpin 1975)
  • Politics shape the framework of economic
    transactions
  • Economic activities generate and redistributes
    wealth
  • Reshapes power and politics among groups

4
Logic of Economic Liberalism
  • Adams Smith (1723-1790) and David Ricardo
    (1772-1823)
  • Gains from trade
  • Comparative advantage
  • Specialization and economies of scale
  • Trade consume more at a lower price
  • Gains from trade common but asymmetrical

5
Historical Alternatives
  • Mercantilism
  • Trade serves political purposes
  • Accumulate surplus and money
  • Augment military power
  • Marxism
  • Capital gains from markets and trade while labor
    is exploited
  • Market driven imperialism
  • Dependency of the South to the North

6
  • Levels Trade Openness

7
Autarky
  • Albania 1970s, 1980s
  • Communist country
  • Broke rang with the USSR and the Council for
    Mutual Economic Assistance (CMEA)
  • Strategy of self reliance
  • Largely closed to trade
  • Outcomes technological backwardness, poverty,
    inefficiency, weakened power

8
Protectionism
  • Protect certain domestic industries from foreign
    competition
  • Objectives
  • Self-sufficiency and security (agriculture,
    military equipment)
  • Protect infant industry
  • Predictability, less dependency, social stability
  • Satisfy political lobbies
  • Respond to predatory dumping on the part of
    trading partners
  • Generate direct government revenue (if tariffs
    used)

9
Protectionist Instruments
  • Quotas
  • Quotas on textile imports
  • Multifibre Arrangement (1974)
  • Tariffs
  • US tariffs over 9 canned tuna, frozen orange
    juice, rubber footwear, non-athletic women's
    footwear, ceramic tiles, etc.
  • Subsidies
  • U.S. government support for sugar cane, cotton,
    corn subsidies
  • Korean steel and electronics 1980s
  • Other non-tariff barriers
  • EU ban on hormone-treated beef, US ban on Mexican
    tuna, Canada requirement of reusable beer
    containers

10
Liberal Trade Policies
  • Reduce tariffs
  • Eliminate/reduce non-tariff barriers
  • Washington Consensus

11
  • Conditions for an Open World Order

12
Hegemonic Stability Theory
  • Interests and power shape trading regimes
  • Hegemonic states as guarantors of free trade
  • Gain most
  • Less vulnerable to social disruption
  • Less vulnerable to cheating
  • Power to persuade others to join
  • Examples?

13
Liberal Institutionalism
  • Robert Keohane After Hegemony (1986)
  • Even hegemonic states need institutions to
    achieve reciprocity and reduce transaction costs
  • Institutions are sticky persist even after
    decline of hegemon, or despite short-term
    interest of the hegemon
  • Examples?

14
US Steel Tariffs
  • US imposes 30 steel tariffs in 2002
  • EU challenged the US in the WTO
  • WTO rules against steel tariffs in 2003
  • President Bush removed the tariffs in 2004.
  • Why?

15
Liberalism and Domestic Politics
  • Trade redistributes wealth
  • Creates losers and winners
  • Consumers win
  • Import-competing sectors loose export sectors
    win
  • Does labor loose or win?
  • Who looses and who wins from higher steel
    tariffs?

16
Trade Institutions
  • The GATT (General Agreement on Tariffs and
    Trade), 1947
  • Facilitate negotiations to reduce tariffs and
    NTBs
  • Average tariffs dropped from 40 of the goods
    value in 1945 to 3 of the goods value in 2002
  • Rounds of negotiations
  • -The Kennedy round (1960s)
  • -Doha Round (2001) under the WTO
  • Dispute resolution mechanism

17
Trade Institutions
  • The WTO (World Trade Organization), 1995
  • Replaced GATT
  • International organization with a staff of
    approximately 500
  • Expanded menu of cooperation
  • Trade in services, intellectual property rights
  • Adjudicates disputes
  • Trade and environment, labor rights, human rights

18
WTO Current Issues
19
Current Issues Agricultural Trade
  • Developing countries comparative advantage in
    agricultural products
  • Industrial countries heavy agricultural
    subsidies
  • The Doha (2001) round and the road ahead?
  • Negotiations broke down in Cancun
  • EU faces pressures for internal reform of the
    Common Agricultural Policies
  • But liberalization opposed by strong domestic
    lobbies in industrial countries
  • What to do?

20
Intellectual Property Rights
  • Piracy of software, music, films
  • WTO International Treaty on Trade Related
    Intellectual Property Rights (TRIPS) (1994)
  • Issues of domestic enforcement
  • Patents on drugs and biotechnology contentious
  • HIV/AID drugs
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