1. International and Interstate Commerce Dr. Thomason Kaplan University

2. Big Picture The goal of this unit is to present the “big picture” of International Trade and its impact on U.S. Economic Growth and Development. As such, learning its institutional framework before proceeding to more specific policies and their effects is paramount.

3. International Trade Given its intricacy and ubiquity, International Trade demands credible government institutions and policies. Promoting coordination and cooperation among over 160 trading nations could not happen without The World Trade Organization (WTO), the International Monetary Fund (IMF), the World Bank, Customs Unions, and Free Trade Areas.

4. International Continued The important point to appreciate here is why so many nations, including the U.S., submit to these institutions on questions of trade and the promotion of Economic Growth and Development. They risk losing national sovereignty by doing so, but do it anyway.

5. International Continued What is their logic for doing so? It comes down to efficiency and self-interest. Better trade flows mean more wealth overall; it is an investment in their long-term economic well- being. In the case of the U.S., there are national policies and institutions at work as well.

6. Interstate Commerce and Congress For example, the “Commerce Clause” of the Constitution clearly delegates all power to regulate U.S.-related commerce, both interstate and international, to Congress. It is a broadly defined power, giving Congress much leeway to define “regulation,” but its jurisdiction is unquestioned.

7. Congress and The President The U.S. Congress takes this power and, here too, delegates it to, not international organizations, but the executive branch (i.e., the President) to negotiate treaties which are then taken directly to the Congress for an up-or-down vote, no amendments. This is called “Fast Track Authority.” It represents Congress forgoing its right to amend treaties for the sake of quick passage of trade bills. These can be with both “Advanced” and “Developing” countries.

8. Congress and the President In addition to goods and services is the financial side of international trade. This includes nations’ Capital Accounts and both Portfolio and Foreign Direct Investment. Capital flows are considered good indicators of other nations’ assessments of a country’s economic conditions, both present and future. In short, before proceeding to analyses of particular trade policies, you must appreciate the governing institutional organizations and general trade policies. This unit provides such a working background.

9. President Obama and South Korea http://www.miamiherald.com/2010/11/11/192 0997/us-officials-fail-to-break-impasse.html http://www.miamiherald.com/2010/11/11/192 0997/us-officials-fail-to-break-impasse.html Video from South Korea Today: http://www.youtube.com/watch?v=QS6SxyAII E8 http://www.youtube.com/watch?v=QS6SxyAII E8