1. Global Economic Competition and Cooperation
Chapter 12
Global Economic Competition and Cooperation

2. National Economic Power: Assets and Utilization

3. Economic Incentives
Mixed success rate
Highly contentious

4. Economic Sanctions: Effectiveness
More effective in certain circumstances
Mixed
Modest goal
Target politically unstable and weak
Sender and target friendly and trade with each other
Imposed quickly and decisively
Sender avoids high cost to itself

5. Drawbacks of sanctions
Unintended victims
Hurt the country imposing sanctions
Used by EDCs to maintain dominance over LDCs
Harm relations with countries not supporting sanctions
Harm those whom you seek to assist

6. The North and the International Political Economy

7. The Economies of the North
High GDP
Slowing growth rate
Postindustrial economy
High technology means fewer workers
Downsizing

8. National Economic Issues and Policies of the North
Decline in economic fortunes

9. End of cold war Lessened need for strategic cooperation
Trade disputes among trilateral countries

10. Decline of central direction
Group of Seven (G-7)
Group of Eight (G-8)
Disputes in general
Free trade
NAFTA
WTO
Protectionism
Economic disputes among the EDCs
U.S.-Japan dispute

11. The South and the International Political Economy

12. Status Disparity between countries Disparity within countries
Economic class, race, ethnicity

13. Modernization Explosive population growth Rapid urbanization
Industrial and environmental dangers

14. Capital Needs: Hard Currency
Loans: Government and private
Slowing global economy means fewer exports and dropping prices
Debt crisis
Brady Plan

15. Private investment
Foreign direct investment and foreign portfolio investment

16. Trade: Export earnings
Product instability
Market and price weaknesses

17. Foreign aid Bilateral Multilateral Factors that reduce impact
Political considerations
Military content
Measuring recipient per capita aid, rather than gross aid
Measuring donor aid relative to wealth
The way aid is applied

18. LDC Perspectives and Policies
Expectations rising
Nationalism
Increased moral rhetoric
Transnational ideology

19. Development of the LDC movement
Political nonalignment
Group of 77 (G-77)
United Nations Conference on Trade and Development (UNCTAD)

20. LDC demands New International Economic Order (NIEO) Trade reforms
Monetary reforms
Industrialization
Economic sovereignty
Economic aid

21. LDC action
Cartels
Protection of domestic industries from foreign competition

22. The Future of National Economic Policy

23. Barriers to Merchandise Trade
Tariffs
Nontariff barriers
Quotas
Pricing limits
Technical restrictions
Subsidization
Dumping
Debate on Free Trade

24. Global Economic Cooperation

25. UN and Economic Development of the South
Pragmatic factors
Decreased international violence
Increased economic prosperity

26. Response of North Programs UN Development Programme (UNDP)
UN Industrial Development Organization (UNIDO)
UN Conference on Trade and Development (UNCTAD)
Group of 77 (G-77)

27. General Economic Cooperation: Other IGOs and Processes
Organization for Economic Cooperation and Development (OECD)
Group of 7 (G-7)
Some CITs

28. Trade Cooperation GATT/WTO Uruguay Round Arguments for and against
Tariff reductions

29. Structure of WTO Power to enforce provisions of GATT
Assess trade penalties
Countries can withdraw
Three-judge panel hears trade violation complaints
Sanctions
Each country has one vote
Imposed by 2/3 vote

30. The future of GATT and WTO
What if a country rejects WTO rules?
Strengthening of movement against globalization

31. Monetary Cooperation
Early monetary regulation
Bretton Woods

32. IMF Helps maintain exchange-rate stability Special Drawing Rights
Efforts in the 1990s
Stabilize economies of LDCs
Aid CIT reorientation to market economy
Asian financial crisis
Russian financial crisis

33. Controversy: IMF Voting based on member contribution Conditionality
Interferes with sovereignty
Destabilizes countries
Maintains dependency of LDCs
Capitalism and social justice

34. Development cooperation: The World Bank Group
International Bank for Reconstruction and Development (similar to commercial bank)
International Development Association (focuses on loans to poorest countries)
International Finance Cooperation (loans to LDCs and guarantees private investment promoting private-sector development
Multilateral Investment Guarantee Agency (promotes flow of private development capital to LDCs through guarantees)

35. Controversy: World Bank
Dominated by North
Too little funding
No understanding of the needs of South
Terms of loans violate sovereignty, damage economies
Not enough attention to human and environmental impacts of projects
Promote market economies, foreign direct investment, and other aspects of capitalism

36. Regional Economic Integration
Bilateral or Multilateral Economic Cooperation

37. Economic Integration: Surrender Some Sovereignty
Levels
Free trade area
Customs union
Economic union
Monetary union

38. The Western Hemisphere

39. The North American Free Trade Agreement
The evolution of NAFTA
The impact of NAFTA
Economic and nationalistic problems of NAFTA

40. The Free Trade Area of the Americas
The origins of FTAA
The Summit of the Americas
The future of FTAA
The Southern Common Market (Mercosur)

41. Asia, the Pacific, and Elsewhere
Association of Southeast Asian Nations (ASEAN)
Asia-Pacific Economic Cooperation (APEC)
Slow progress

42. The Future of Regionalism
Integration versus revival of regionalism