Economic Supra-nationalist Organizations and Trading Bloc's

yellow = important stuff

World Trade Organization

  • Resolves trade issues

  • Sets legal rules for int. trade (harmonized)

  • Promotes equal treatment of national and foreign companies

  • Seeks to increase free trade, eliminate trade barriers, and increase privatization and deregulation of markets

  • Hegemonic organization (dominant) right winged economic solutions - criticized for benefitting rich countries

Dispute Resolution Mechanism (DRM) - video

  • Formed out of the GATT (General Agreement on Tariffs and Trade)

  • violation of Non-Discrimination Principle = put in front of the DRM

  • Reciprocal agreements to reduce quotes and restrictive safety standards

  • Transparency - publish trade agreements and policies

  • Safety valves = countries allowed to block trade with concerns of public health and national security

  • Country violated rules = will be forced to pay monetary fines or counter-voting tariffs

Bretton Woods Agreement

  • Rules for the global economy set out at Bretton Woods in 1944

    • near the end of WWII

  • 1944 agreement, helped establish a fixed exchange rate in terms of gold for major currencies

  • Each country that signed hat to adopt economic policy that compared its currency rate directly against a fixed value of the price of gold

    • U.S. Dollar key currency, valued at 1/35 oz. of gold

      • other countries backed their currency with U.S. dollar

Currency Agreement Changes

  • Early 1970’s, a floating exchange rate system was adopted

  • USA changed the system, too difficult to keep up gold storage to back up the American dollar

International Monetary Fund (IMF)

  • Established in 1944 at the end of WWII

  • First role - stabilize the monetary system (currency values)

  • 2nd role - provide loans to countries facing economic issues

  • Members provide funds

  • Economic policies to increase living standards and economic stability

  • Key goal to stabilize the int. monetary system

  • Considered hegemonic - force recipient nation of loans to restructure their economies to pay back the loans

World Bank

  • Established at the end of WWII

  • Global bank - lends to member countries trying to develop

    • must meet political & economic conditions including reducing debt and corruption

    • Encouraged to adopt democracy and capitalism

  • 189 member countries providing financial assistance

  • Promotes sharing of how to apply innovative knowledge

Trade Blocs

  • Nation stage signs treaties to set up trade area with reduced trade barriers

    • called free trade

NAFTA (North American Free Trade Agreement)

  • Canada, USA, & Mexico special trade agreement to eliminate most tariffs and quotas

    • Called USMCA (CUSMA in Canada, but that sounds stupid)

    • USMCA and NAFTA differences eg.

      • NAFTA - 62.5% of automobile sourced from NA can be imported tariff free, requirement not met = 2.5% tariff, 1/3 of jobs in USA lost

      • USMCA - 75% parts have to be sources from NA, 40-45% of parts must be made by workers who earn at least $16/hr