1 / 20

Global Trade Treaties: Theories, History, and Impact on Economy

This week focuses on the structure of trade treaties, theories guiding these agreements, historical evolution, and the significance of regional trade treaties. Explore neoclassical economic theory, interest group dynamics, and realist/mercantilist perspectives. Understand trade policies like unilateral, bilateral, and multilateral deals, alongside key pre-WWII and post-WWII trade treaty milestones, from GATT formation to the establishment of the WTO and the European Union. Delve into the complexities of NAFTA, CAFTA, and other regional agreements, and analyze trade theories by Lomborg, Anderson, Pronk, Bergstein, Ruggie, and Wallace. Discover the interconnectedness of trade policy and domestic politics, sustainability conditions, and the evolving landscape of international trade relations.

gsilva
Download Presentation

Global Trade Treaties: Theories, History, and Impact on Economy

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. POL 4410: Week Five • Trade Treaties

  2. Structure • Theories of Trade Treaties • History of Global Trade Treaties • Regional Trade Treaties

  3. Trade Theories • Neoclassical Economic Theory • Interest Group Theory • Realist / Mercantilist Theory

  4. AUTARKY FREE TRADE Cloth Cloth Soap Soap Britain Britain 16 24 0 4 Italy Italy 0 3 2 8 TOTAL TOTAL 24 19 8 6 Neoclassical Theory • Comparative Advantage vs. Absolute Advantage

  5. Interest Groups • Losers from trade may try to block free trade and to impose tariffs. • ‘Protection for sale’ • Treaties as commitment devices

  6. Realism / Mercantilism • States sign treaties for two reasons:(1) To bully other weaker states(2) Because treaties don’t matter

  7. Types of Trade Policy • Unliateral Policy • Bilateral Deals • Multilateral Institutions

  8. Trade Treaties pre-WWII • Cobden Chevalier in 1860 • MFN • Reciprocal Trade Agreements Act in 1934

  9. GATT • Founded in 1948 with 23 members • Based on reciprocity and MFN - many exceptions made • Series of rounds

  10. WTO • Founded in 1995 with 76 members, now 149. • Has Dispute Settlement Body • Consensus and negotiations • EU / US trade disputes

  11. European Union • European Coal and Steel Community in 1951 • European Economic Community in 1957 • European Union in 1992 • Tripartite structure: Commission, Council of Ministers, European Parliament

  12. NAFTA and CAFTA • 1994 NAFTA founded • Chapter 11 and Chapter 19 • CAFTA signed 2005

  13. Other regional treaties • Asia Pacific economic Cooperation group • Mercosur • Andean Pact • Australia-New Zealand

  14. Lomborg: Anderson • Static Gains: inter / intra industry • Dynamic Gains: knowledge; faster growth from imported capital goods • Why protectionism? • What reduces protectionism? Info; tech; foreign openness; trade agreements • Costs: social and environmental?

  15. Anderson (2) • 1) Free trade; (2) Doha + and APEC (MFN); (3) FTAs (non-MFN); (4) PTAs with ex-colonies. • Binding? ; MFN? ; Reciprocal? • Free trade = 2*(Doha) = 24 * (FTAA) • Trade diversion vs. trade augmentation • Bananas and trade diversion $1 / -$1 / -$13

  16. Anderson (3) • Gross effects versus net effects • Economic costs of reducing tariffs and subsidies. • Private and social costs. Concentrated costs and diffuse benefits • Poverty, environment, climate change, conflict

  17. Pronk • Positive effects of trade on other areas (poverty, health, environment) depend on ‘sustainability conditions’. • Trade policy and domestic policy interact • Gradualism vs. shock therapy. Sticky costs. • Is WTO actually slowing free trade? Two-track liberalization.

  18. Bergstein • Bicycle must keep moving • Big is beautiful • Bulding blocks, not stumbling blocs • Money is central • Leadership is essential

  19. Ruggie • What is ‘embedded liberalism?’ • Power and purpose • Move from classical liberalism to neoliberalism

  20. Wallace • What is Europeanization? Magnetic / Heineken analogies. • Importance of history and goeography • Neofunctionalism • Multi-level governance • Territorial, Functional, Affiliational Integration • Multiple modes of interaction • Impact on domestic politics

More Related