World economic orgs

Seattle

Quebec City

Globalization: describes a process by which regional economies, societies, and cultures have become integrated through a globe-spanning network of communication and trade

What is the WTO?An organization for liberalizing trade and a

forum to negotiate trade agreements.It operates and mediates a set of trade

rules.There is a settlement process available.Origins with GATT

Principles of the Trading System

1. Most Favoured Nation2. National Treatment

3. Freerer Trade4. Predictability

5. Promoting Fair Competition6. Encouraging

Development & Economic Reform

The Case for Open TradeTariffs on industrial products have steeply fallen

and no average less than 5% in industrial countriesDuring the first 25 years after the war, world

economic growth averaged about 5% per year. World trade grew 8%.

All countries have assets they can employ to produce goods and services for domestic and international markets.

Principle of comparative advantage – concentrate on the best

Liberal trade policies sharpen competition, motivate innovation and breed success.

How Decisions are MadeDecisions of the WTO are made through

negotiations between the member states.Ministers or ambassadors conduct the

negotiations.Members countries come from all political

and economic stripes.

North American Free Trade Agreement (NAFTA)

Agreement between Canada, USA and MexicoCame into affect on January 1, 1994By purchasing power parity GDP it is the largest

trading bloc.Resulted in the immediate elimination of most

tariffs.There are provisions for trade dispute resolution.

Chapter 11 – allows corporations or individuals to sue countries for compensation when actions taken by those governments adversely affect their investments.

Once an item has been sold as a commodity, governments cannot stop its sale in the future.

Most foreign investment in Canada is in the form of company take over (98%)

Massive deindustrialization has occurred in the US and Canada.