31-Jan-16

Contact

Intro to Dr. Mutahir

– mutahir5@gmail.com
World Trade – 0321-5167800

Dr. Mutahir

Prerequisites of this Course Why Study WTO & GE?

• Prerequisites • Understand the dimension of WT
• Manage a business in international market
– Globalization and Trade (Basic Knowledge) • Lucrative career opportunities
– Economics (basic) • Informed policy choices
– Math (basic)
• Intellectual curiosity
– Statistics (basic)

What is this course about? Readings

• What function do WTO perform?
• Structures of the global economy?
• How global economies interact?
• How global economies settle trade disputes?
• How should you approach global trade policy
decisions in the future?
Recommended Books.
• Michel Chossudovsky, The Globalization of poverty and the
new world order, second edition, global research, 2003.
• The Role of the World Trade Organization in Global
Governance. Edited by: Gary P. Sampson. Publisher: United
Nations University Press, 2001.
• Dr. Arie Reich, the World Trade Organization: from GATT to
the WTO in the World Trade Organization and Israel: Law,
Economies and Politics (Arie Reich, ed.)
• Professor Joseph H.H. Weiler, The rule of Lawyers and the
Ethos of Diplomats; Reflection on the Internal and External
Legitimacy of WTO Dispute Settlement in The World Trade
Organization and Israel: Law, Economics and Politics.

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Exams and Grading Topics

• Introduction to world trade
• The nature of the global economy
• Assignment (5 %) • The global assembly line
• Class participation (5%) • The role of the global institutions
• International Trade Dispute Settlement
• Project presentation (10%) • Dumping and anti-dumping
• Quizzes (10%) • The WTO Agreement on Agriculture
• Developing countries and International Trade
• Midterm exam (30%) • The global energy economy
• Final exam (40%) • Poverty, famine formation and the role of the biotech conglomerates
• The post cold war recession
• The global financial crisis
• The evolution of global trade regime

Agenda Trade Timeline

At the end of this session you will be • Prior to 3000 BC
able to understand: • Waterborne traffic: 3000-1000 BC
• The caravan: from 1000 BC
• New routes to the west: from 300 BC
• Trade time line • A trade route from China: 2nd century BC
• The trading kingdoms of West Africa: 5th - 15th c. AD
• Trade Eras • The Portuguese slave trade: 15th - 17th century AD
• Trade History • Chinese sea trade: 15th century
• Europe's inland waterways: 15th-17th century AD
• Globalization • Portugal's eastern trade: AD 1508-1595
• Spanish silver: 16th century AD
• Dutch trade in the east: AD 1595-1651
• English trade in the east: 17th century AD
Slide 9 Slide 10

Globe

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Trade Routes
How world trade developed

• From 3000 BC the first extensive trade routes were up and down the great rivers -
the Nile, the Tigris and Euphrates, the Indus and the Yellow River. Maritime trade
developed between Egypt and Minoan Crete and then westwards along the north
African coast.

• From the 1st century AD, Roman roads and the Pax Romana gave merchants vast
new scope within Europe. At the same time a maritime link opened up between
India and China.

• During the 13th century guilds of merchants made use of safer travel to increase
Europe’s prosperity, with some merchants like Marco Polo and his family travelling
as far as Persia and China.

• From the 15th century maritime exploration led to trade in such goods as spices,
silver, sugar and, regrettably, slaves. Powerful trading companies emerged, like the
East India Company (granted a monopoly in 1600 on all English trade east of the
Cape of Good Hope).

Slide 13

Trade Eras Trade Eras…2

• Ancient
– Records from the 19th century BC to the existence of an Assyrian merchant
• Later modern
– camel allows Arabian nomads to control long distance trade in spices and silk
from the Far East
• Middle Ages
– From 7th to 14th century
• Early modern
– Due the Turkish hold on the Levant during the second half of the 15th century
the traditional Spice Route shifts from the Persian Gulf to the Red Sea
– A Dutch convoy sailed in 1598 and returned one year later with 600,000
pounds of spices and other East Indian products
– The Dutch East India Company is formed in 1602
– The first English outpost in the East Indies is established in Sumatra in 1685
– In 1799, The Dutch East India company, formerly the world's largest company
goes bankrupt, partly due to the rise of competitive free trade
Slide 15
– By 1815, the first shipment of nutmegs from Sumatra had
arrived in Europe
– Opium War (1840)- Britain invades China to overturn the
Chinese ban on opium imports
– Free trade agreement (1860) finalized between Britain and
France under the presidency of Napoleon III, prepared by
Michel Chevalier and Richard Cobden, sparks off
successive agreements between other countries in Europe
– In 1873, the Wiener Börse slump signals the start of the
continental Long Depression, during which support for
protectionism grows.
Slide 16

Trade Eras…3 GNP of the Great Powers of Europe

(in billions USD, 1960 prices)
• Post war
– In 1946. the Bretton Woods system goes into effect
– In 1947, 23 countries agree to the General Agreement on 1830 1840 1850 1860 1870 1880 1890
Tariffs and Trade to rationalize trade among the nations
Russia 10.5 11.2 12.7 14.4 22.9 23.2 21.1
– European Economic Community is established with a
common commercial policy in 1958 France 8.5 10.3 11.8 13.3 16.8 17.3 19.7
– 1 January 1995: World Trade Organization is created to United
facilitate free trade Kingdom
8.2 10.4 12.5 16.0 19.6 23.5 29.4
– 2002: The European Union launches the euro in cash,
which instantly becomes the second most used currency in Germany 7.2 8.3 10.3 12.7 16.6 19.9 26.4
the world
Austria-
7.2 8.3 9.1 9.9 11.3 12.2 15.3
Hungary

Italy 5.5 5.9 6.6 7.4 8.2 8.7 9.4

Slide 17

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GLOBALIZATION
Globalization refers to the processes by
which flows of trade, finance and
information between countries are
broadened and deepened so that they
function as one global market.
Globalization accelerate from 1980’s, it has
its roots in imperialism and colonialism.
Stages of Globalization
• Stage1: Imperialism - a policy of extending control or
authority over foreign territories by means of
acquisition or maintenance of empires either
through direct conquest or through indirect methods
of exerting control on the politics and/or economics
of other countries.
• The Age of Imperialism began when the Europeans –
Spain, France, Britain, Germany, Belgium –
conquered and partitioned the Caribbean, Latin
America, Africa , Asia, Australia and the Pacific.
Modern imperialism is driven by the activities of
multinational corporations.
Phases of Globalization
• 1870-1913- was the first wave of globalization.
Slow down by World War I. League of Nations
started during this time by Woodrow Wilson
• 1945-1973- emergence of international
organizations such as the UN, IMF and the
World Bank (Bretton Woods Agr.), {ITO}
• 1975 to present the third phase of
globalization
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Globalisation: good or bad?
Globalisation is a fact of life:
Coca Cola in Angola, Nike trainers in the Philippines, Nestlé milk
products in Russia, McDonalds restaurants in Slovenia, Manchester
United football kits in Sierra Leone, Caribbean bananas in the UK, TV
images from every part of the planet…
Does this represent a breakdown in traditional cultures?
Or a global sharing of advantages?
Globalisation is a result of international trade
Stages of Globalization (cont’d)
• Stage 2: Colonialism – the extension of a
nation’s sovereignty over territories outside its
boundaries, often to facilitate economic
control over their resources, labour and
markets.
• The territories conquered by the imperialist
powers were eventually settled. During
colonialism the European culture was
promoted as superior to native culture.
Facilitators of Globalization
• World Bank
• International Monetary Fund
• World Trade Organization/ formerly the GATT
• Trans-national Corporations or Multi-national
Corporations
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