Trade Liberalization and InterdependenceSocial Studies 30

Bretton Woods international monetary management established the

rules for commercial and financial relations among the world's major industrial states.

Preparing to rebuild the international economic system as World War II was still raging,

Setting up a system of rules, institutions, and procedures to regulate the international monetary system, the planners at Bretton Woods established the International Bank for Reconstruction and

Development (IBRD) (now one of five institutions in the World Bank Group) and the

International Monetary Fund (IMF).

The chief features of the Bretton Woods system were an obligation for each country to adopt a monetary policy that maintained the exchange rate of its currency within a fixed value—plus or minus one percent—in terms of gold; and the ability of the IMF to bridge temporary imbalances of payments. In the face of increasing strain, the system collapsed in 1971, following the United States' suspension of convertibility from dollars to gold.

Until the early 1970s, the Bretton Woods system was effective in controlling conflict and in achieving the common goals of the leading states that had created it, especially the United States.

GATT The General Agreement on Tariffs and Trade

was first signed in 1947. designed to provide an international forum

that encouraged free trade between member states by regulating and reducing tariffs on traded goods and by providing a common mechanism for resolving trade disputes.

WTO only global international organization dealing

with the rules of trade between nations. The goal is to help producers of goods and

services, exporters, and importers conduct their business.

Criticism Gap between rich and poor widens Further globalization Does not consult “the little guy”

World Bank The World Bank is a vital source of financial and

technical assistance to developing countries around the world.

made up of two unique development institutions owned by 184 member countries the International Bank for Reconstruction and

Development (IBRD) focuses on middle income and creditworthy poor countries

International Development Association (IDA). focuses on the poorest countries in the world

Criticism- Undermines national sovereignty- Free trade fosters unacceptable working

conditions in developing countries, destroys the environment, and destroys jobs at home

- Benefits only big corporations

IMF 184 member countries established to promote international monetary

cooperation, exchange stability, and orderly exchange arrangements; to foster economic growth and high levels of employment; and to provide temporary financial assistance to countries to help ease balance of payments adjustment.

Criticism Vicious cycle of foreign debt To much is tied to other factors

Transnational Corporations A multinational corporation (MNC) or

multinational enterprise (MNE) or transnational corporation (TNC) is one that spans multiple nations; these corporations are often very large. Such companies have offices, factories or branch plants in different countries. They usually have a centralized head office where they coordinate global management.

Criticism Threatens sovereignty of states Exploits the local workforce and then leaves

when resources depleted and environment contaminated

G8 informal group of eight countries: Canada,

France, Germany, Italy, Japan, Russia, the United Kingdom and the United States. Each year, G8 Leaders and representatives from the European Union meet to discuss broad economic and foreign policies.

Criticism Canada is a member Too elite Ineffective—lip service to issues

EEC established 1958 by Belgium, France, Italy,

Luxembourg, the Netherlands, and West Germany known informally as the Common Market The EEC had as its aim the eventual economic union

of its member nations, ultimately leading to political union. It worked for the free movement of labor and capital, the abolition of trusts and cartels, and the development of joint and reciprocal policies on labor, social welfare, agriculture, transport, and foreign trade.

EC Created when the EEC and the Maastricht

Treaty merged (both were trying to achieve economic cooperation.)

EU an economic and political confederation of European nations

(1993) responsible for a common foreign and security policy and for

cooperation on justice and home affairs. Twenty-seven countries—Austria, Belgium, Bulgaria, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany (originally West Germany), Great Britain, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, and Sweden—are full members of the organizations of the EU.

Continues to be added to—i.e. 2008 Lisbon Treaty on Agriculture

Criticism Integration Cooperation Sovereignty

NAFTA North American Free Trade Agreement accord establishing a free-trade zone in North

America; it was signed in 1992 by Canada, Mexico, and the United States and took effect on Jan. 1, 1994.

NAFTA immediately lifted tariffs on the majority of goods produced by the signatory nations. It also calls for the gradual elimination

Criticism Loss of jobs in Canada

OAS Organization of American States international organization, created Apr. 30, 1948, at Bogotá,

Colombia, by agreement of Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Cuba, the Dominican Republic, Ecuador, El Salvador, Guatemala, Haiti, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, the United States, Uruguay, and Venezuela.

regional agency designed to work with the United Nations to promote peace, justice, and hemispheric solidarity; to foster economic development and to defend the sovereignty and territorial integrity of the signatory nations.

Criticism USA power

OAU Organization of African Unity former international organization, established 1963

at Addis Ababa, Ethiopia, by 37 independent African nations to promote unity and development; defend the sovereignty and territorial integrity of members; eradicate all forms of colonialism; promote international cooperation; and coordinate members' economic, diplomatic, educational, health, welfare, scientific, and defense policies.

Now the African Union

Criticism effectiveness