World Politics EXAM 3

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44 Terms

1

Tarriff

tax on specific kinds of imports or exports.

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2

Quota

amount of a certain good that can be imported by a country.

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3

GATTs

The General Agreement on Tariffs and Trade

the foundational agreement reached between many countries after World War II to reduce tariffs, quotas, and other barriers to trade - restrictions on trade between countries.

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4

What did GATTs do for trade?

  • more global trade as time went on.

    • more countries signing onto international trade agreements.

  • most agreements reduced or cut tariffs.

    • global tariffs rates (especially in the US) greatly decreased

  • several country’s GDP greatly increased—almost 2-5 times more.

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5

Uruguay Round

A series of multilateral trade negotiations that took place within GATT from 1986 to 1994.

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6

What did the Uruguay Round do?

  • trade expansion

    • lowered tariffs again

    • included goods and services:

      • textiles

      • intellectual property

      • more agricultural products

    • more countries signed on

  • enforcement

    • created the World Trade Org (WTO)

      • WTO included dispute resolution process so countries could sue each other for trades violating GATT.

        • 621+ disputes and 350 rulings at this point.

        • US has brought 150 and defended against 150 disputes.

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7

150

How many disputes as the US defended against and brought to the WTO?

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8

621+, 350

Since the WTO’s inception, ____ disputes and ___ rulings have been brought.

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9

Doha Round

Most recent GATT round under the WTO beginning in Nov 2001, and still considered a failure.

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10

Failures of the Doha round?

failure to:

  • expand on Intellectual property

  • make free-er trades, less subsidies on agriculture

  • include environmental goods: solar panels, turbines, etc.

  • give better market access to services.

  • make fewer, non-tariffs barriers

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11

France

US top cosmetic IMPORTER

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12

China, Taiwan, and Germany.

Top 3 Bike EXPORTERS

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13

East Asia: Taiwan, China, Cambodia, etc.

Where does the US IMPORT their bikes from?

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14

United States

Who IMPORTS the most bikes?

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15

Others bought the Russia oil, mostly India and China because it was cheaper now.

When the US stopped buying Russian oil, why didn’t it hurt the Russian economy?

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16

Components of Economic Development

  1. Capital

  2. Labor

  3. Infrastructure

  4. Government

  5. Trade

  6. Resources

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17

Agrarian

agriculture based

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18

Capital Developement

  • moving from agrarian economy → manufacturing economy → high tech info economy

    • new products and better production

    • needs investments and efficient equipment

    • business - upward or downward spiral

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19

Where do developing countries get their capital?

  • IGOs (intergovernmental)

    • World Bank (International Devel. Asso. - IDA)

    • IMF

    • regional funds

  • NGOs (non-governmental)

    • microloans/aid

    • direct aid from other countries

    • multinational corps

    • investors (big and small)

    • remittances

    • exporting

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20

What does the World Bank do?

  • gives loans at good terms with delayed payback to developing countries.

  • allows them to leverage resources

  • mainly gives money for projects

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21

What does the IMF do?

  • loans money to countries with economic instability

    • stabilizes currencies and provide foreign currency

    • debt and economic shocks

  • guidance: standards, transparency

  • STRINGS ATTACHED: ex. debt, market liberalization, tax raises, and wage cuts (IMF is not well liked because of these strings)

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Who gets World bank loans?

  • relatively poor countries

    • Gross national income per Capita must be below and established threshold that changes each year.

      • ex. in 20221 it was $1,185.

  • countries with low creditworthiness

    • they can’t borrow on market terms and therefore have need for concessional resources to finance the country’s Development program.

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23

Labor Development

  • # of people in workforce

  • skills of people in workforce relies on:

    • education level

    • skill proficiency

  • health & welfare: increased health = increased productivity

  • brain drain: good workers move away to make more money = labor force decreases

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24

Infrastructure Development

for good business operation

  • transport: roads, ports, airports, rails.

  • energy & energy grids

  • water & waste removal

  • communications: phone, mail, internet, delivery.

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25

Government Development

political & economic security

  • political stability

    • lack of unrest

    • lack of social issues

      • thievery

      • violence

    • lack of corruption

    • trust in gov. (transparency)

    • bureaucratic efficiency (system of administration that is the most efficient way to organize human activity)

  • economic stability

    • stable monetary policy

    • stable currency

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Trade Development

  • access to trade → max efficiency

  • access to other markets

  • access to resources for value added

  • access to products for inputs

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Resource Development

access to:

  • water

  • food

  • land

  • clean air

  • minerals (oil, metal, coal, etc)

  • good geography & climate

    • ex. landlocked, mountainous, 7—its hard to import/export under these conditions.

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28

Levels of Economic Intergration

  1. Free Trade Area

  2. Customs Union

  3. Common Marker

  4. Internal Market

  5. Monetary Union

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Free Trade Area

characteristics:

  • no tariffs

  • no quotas

  • only specific goods/services

  • ex.

    • CAFTA (US + Central America)

    • US + SA

    • US + Mid-East (Israel, Bahrain, Jordan, ect.)

    • US + Asia (Australia, Korea, Singapore)

    • US + Africa (+Morocco)

    • European Union

    • ASEAN

  • little sovereignty given up

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30

Customs Union

characteristics:

  • all characteristics of free trade plus-

  • common external trade policy

  • negotiates as one entity

  • all have same trade policy w/ other countries

  • little more sovereignty given up

<p>characteristics:</p><ul><li><p>all characteristics of free trade plus-</p></li><li><p>common external trade policy</p></li><li><p>negotiates as one entity</p></li><li><p>all have same trade policy w/ other countries</p></li><li><p><mark data-color="blue" style="background-color: blue; color: inherit">little more sovereignty given up</mark></p></li></ul><p></p>
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31

Common Market

characteristics:

  • 4 freedoms—these elements can move freely across borders without significant restrictions between member countries.

    • Goods

    • Services

    • People (Labor)

    • Capital (business, land, etc.)

  • moderate sovereignty given up

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32

Internal Market

characteristics:

  • common market characteristics, plus -

  • common policies

    • business regulations

    • workplace safety

    • labor laws

    • standards

    • environmental

    • agricultural, etc.

  • gets rid of NTBs (non-tariff barriers)

  • majority of sovereignty given up

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33

Monetary Union

characteristics:

  • same currency

  • one central bank—decides interest rates

  • same monetary policy

  • almost all sovereignty given up

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34

Quota

fixed amount of a good that a country can import or exports in a specific time frame.

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35

Less sovereignty.

More economic integration equals ____.

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36

more economic prosperity

Arguably, more economic integration leads to ____.

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37

Different areas of globalization?

  • trade and service

  • Economic investment, capital, and tech.

  • People: labor and tourism

  • environmental

  • security

  • health

  • information

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38

Trade and Service globalization pros and cons

Pros:

  • more efficient specialization

  • product variety

  • more competition = more advancement

  • get more for cheaper and/or better quality at same price.

Cons:

  • cost adjustments

  • prisoners dilemma (labor /social policy is not as organized

  • keeping up is stressful.

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Economic investment, capital, and tech globalization

Pros:

  • max efficiency + wealth

  • help devolpe countries economically

  • innovation

Cons:

  • investment instability

  • corporate influence

  • money being moved in and out of the country

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40

People: labor and tourism globalization

Pros:

  • econ boost

  • more jobs

  • joy of travel

  • cultural appreciation and education

Cons:

  • brain drain

  • congestion

  • price inflation

  • loss of culture and identity

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41

environmental globalization

Pros:

  • international agreements

  • tech to solve issues

  • pressure changes bad behavior

Cons:

  • hard to address issues bc no global gov

  • more production = worse environmental health

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security globalization

Pros:

  • less likely conflicts

  • global pressure for peace

  • global cooperation easier

Cons:

  • international terrorism

  • arms trade

  • international crime

  • vulnerabilities

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