Chapter 13 Interdependence and Economic Order

1. Chapter 13Interdependence and Economic Order By, Brittni Weimer, Corinne Pickus, Jesi Vandeputte

2. Sensitivity- depends on how quickly changes by one actor in one setting bring about changes in another and how great the affects are. “changes”-shifts in foreign policy or transformations of actors themselves 1st Actors are sensitive to the behavior of other actors or developments in parts of the system. 2nd Actors who are sensitive to external changes may also be vulnerable to their effects Vulnerability- measured by the costs imposed on the state or nonstate actor by external events,costs that the actor must absorb because it cannot pursue alternative policies that might minimize those costs Conflict and Harmony Liberal View: Positive and optimistic; interdependence is conductive to more cooperation among states as they are brought together through interaction Realist view: constraint on states and is possible a significant source of conflict Interdependence and the idea of sovereignty do not mix Comparative Advantage-the ability for a country to produce a good or service at a lower opportunity cost Free Trade Neither free trade & autarky are absolutes; they are instead at opposite ends of the spectrum of trade practices Protectionism- is restricting, but not eliminating, imports in an efforts to maintain or nurture the economic viability of domestic industries Autarky-min trade in favor of domestic production of all goods & services required by society; not cost-effective(principles of comparative advantage) Can be a choice Tariffs- taxes or duties levied on imported goods in order to raise revenue or to regulate the flow of foreign goods into a country Protect domestic industries, but can also be manipulated in an effort to influence trading partners Nontariff Barriers to Trade (NTBs), Quotas which controls the amounts of goods permitted to enter a country from a specific source for a specific time period Economic Nationalism- an appeal design to decrease demand for foreign goods in an effort to sustain the viability of certain domestic industries, & especially to protect jobs Interdependence International Trade

3. Collective Goods • Each state is a member of a group or collective that includes the entire globe • Private good • Jointness of supply • Nonexclusiveness • Free Riders • Collective Action Regimes and International Order • Governing arrangements • Norms, principles and customs • Hegemony and regime • The monetary regime • Bretton Woods Agreement • The trade regime

4. Economic Disorder and Realignment Enduring Order Hegemonic Decline WTO Post WWII Economic Growth Geneva 1994 2008 152 Members and 30 Observers Uruguay Round Doha Round Strategic Trade Embedded Liberalism Quad Mutual Economic Interest helps reinforce Peace US pressure Japan and Germany Fed reduces US inflation US “exports” inflation Global Recession 1980’s Japan becomes America’s largest creditor Asian Tigers economic growth ASEAN economic cooperation 1988 Omnibus Trade and Competitiveness Act Super 301