Beruflich Dokumente
Kultur Dokumente
15th edition
Roy Philip 2
Beyond the First Decade 2
of the 21st Century (1 of 2)
• Growth of the U.S. economy slowed dramatically in
the last few years especially in 2009
• Economies of the developed world expected on
average to grow annually at 3% for the next 25 years
(OECD)
• Economies of the developing world expected on
average to grow annually at 6% for the next 25 years
(OECD)
• As a result, economic power and influence will move
away from industrialized nations to developing
nations (Latin America, Asia, Eastern Europe, and
Africa)
Roy Philip 3
Beyond the First Decade 2
of the 21st Century (2 of 2)
• Companies are looking for ways to become more
efficient, improve productivity, and expand their
global reach while maintaining an ability to
respond quickly and deliver products that the
markets demand.
– Nestle, Samsung, Whirlpool
• Smaller companies also using novel approaches
to target global markets
– Nochar Inc. (fire retardant)
– Buztronics Inc. (promotional lapel buttons)
Roy Philip 4
Protection 2
Logic and Illogic
• Arguments for protectionism:
– Protection of infant industry
– Protection of the home market
– Need to keep money at home
– Encouragement of capital accumulation
– Maintenance of the standard of living and real wages
– Conservation of natural resources
– Industrialization of a low-wage nation
– Maintenance of employment and reduction of unemployment
– National defense
– Increase of business size
– Retaliation and bargaining
Roy Philip 5
Does Protectionism Help? 2
Roy Philip 6
Trade Barriers 2
• Tariffs
• Quotas and Import Licenses
• Voluntary Export Restraints (VER)
• Boycotts and embargoes
• Monetary barriers
– Blocked currency
– Government approval
• Standards
• Antidumping penalties
• Domestic subsidies and economic stimuli
Roy Philip 7
Trade Barriers 2
Roy Philip 8
Trade Barriers 2
Roy Philip 9
The General Agreement on 2
Tariffs and Trade (GATT)
• Shortly after World War II, the U.S. and 22 other countries
signed GATT (1947) which paved the way for the first effective
worldwide tariff agreement
• Basic elements of the GATT
– Trade shall be conducted on a nondiscriminatory basis
– Protection shall be afforded domestic industries through
customs tariffs, not through such commercial measures as
import quotas
– Consultation shall be the primary method used to solve global
trade problems
• Eliminating international trade barriers – Uruguay Round
– The General Agreement on Trade in Services (GATS)
– Trade-Related Investment Measures (TRIMs)
– Trade-Related aspects of Intellectual Property Rights (TRIPs)
Roy Philip 10
The World 2
Trade Organization (WTO)
• WTO which is an institution, not an agreement, was founded
in 1994.
– Sets many rules governing trade between its 148 members
– Provides a panel exports to hear and rule on trade disputes
between members
– Issues binding decisions
– All member countries will have equal representation
– Member countries have open their markets and to be bound by
the rules of the multilateral trading system
• U.S. ratification concerns
– Possible loss of sovereignty over its trade laws to WTO
– Lack of veto power
– Role U.S. would assume when a conflict arises over an individual
state’s laws that might be challenged by a WTO member
• China became member of the WTO (2001); Vietnam (2007)
Roy Philip 11
Skirting the spirit of 2
GATT and WTO
• Loopholes
– China reduced tariffs while at the same time
increased number and scope of technical
standards and inspection requirements
• Imposing antidumping duties
• Negotiating bilateral trade agreements
– May lead to multinational concessions
– Not necessarily consistent with WTO goals
and aspirations
Roy Philip 12
International Monetary Fund 2
(IMF)
• Because of inadequate money reserves
and unstable currencies, the IMF was
created to assist nations in becoming and
remaining economically viable
• Objectives of the IMF
– Stabilization of foreign exchange rates
– Establishment of freely convertible currencies
to facilitate the expansion and balanced
growth of international trade
Roy Philip 13
World Bank Group 2
Roy Philip 14
Anti-globalization Protests 2