BMS 3031: TRADE AND DEVELOPMENT Lecture 3: Darren Hoad
Basic Structural Features? • Market based • Global organisations • Regional economic agreements • Multinational / corporate landscape • Trade increases • FDI increases • North / South / Core Periphery relationships? • The Washington consensus
Trade worth $ 9.1 trillion in 2005 (WDM) • Trade historical Importance -Trading Empires / trading exploitation • Emergence of Centre Periphery relationships -Colonialism, Imperialism and Dependency • Reciprocation and Comparative Advantage (Ricardo) • Trade as motor of development ? • Trade 2010 ? • The WTO
Regional Trade Agreements • EU: Complete elimination of restrictions on goods flows, capital flows, and labor flows within Europe. • NAFTA: Free trade among Canada, US, Mexico. • Andean Pact: Bolivia, Colombia, Ecuador, Peru, Venezuela. • Mercosur: Argentina, Brazil, Paraguay, Uruguay. • Free Trade Area of the Americas (FTAA): 34 nations from Alaska to Argentina, planned start by 2005. • ASEAN: Brunei, Indonesia, Laos, Malaysia, the Philippines, Myanmar, Singapore, Thailand and Vietnam. • APEC: US, Canada, Japan, China, many in S.E. Asia, Australia. • African trade blocs: 9 different trade blocs.
WHAT ARE THE GUIDING PRINCIPLES BEHIND THE WTO? • Founded in 1995 (1948), the WTO is an association of member states (140+) • Based in Geneva, the WTO has a permanent Secretariat and an enforcement body (the Dispute Settlement Body) • Trade Rounds • Expanding free trade concessions equally to all members • Establishing freer global trade with fewer barriers • Making trade more predictable through established rules • Making trade more competitive by removing subsidies
WTO AGREEMENTs • GATS – General Agreement on Trade in Services • AOA – Agreement on Agriculture • TRIPS – Trade Related Intellectual Property • TRIMS • GATT – General Agreement on Trade and Tarrifs • ATC • SPS http://www.jurisint.org/pub/06/en/index.htm
Key Principles: • Progressive Liberalisation – ongoing process • Most Favoured Nation Treatment (MFN) • National Treatment (NT) • Market Access • Necessity • General Exceptions (Article XX)
WTO CASES: According to the World Wide Fund for Nature (WWF), the WTO is responsible for undermining 7 of the world’s most important (MEAs) environmental treaties.
How do you like your Dairy products – chemical based or organic ? The WTO found against the European Union when they tried to ban hormone treated beef from entering Europe. Lobbied by American beef producing groups, the WTO forced the EU to accept harmful hormone treated beef (allegedly responsible for accelerating puberty and causing cancer)
WTO CASES: • WTO ruled against the United States Marine Mammal Protection Act, which banned the import of Tuna from countries, whose fleets use fishing methods that kill dolphins. • The US Endangered Species Act banned shrimp imports from countries that do not use devices (TEDS) designed to protect endangered sea turtles out of shrimping nets. The WTO ruled against the US ban • Venezuela challenged the US through the WTO over the Clean Air Act, which demands clean gasoline. The WTO agreed and forced the US govt. And EPA to rewrite its anti-pollution measures. • Burma-Massachusetts Case • Chiquita Banana Case