POLD89H3 Study Guide - Bretton Woods Conference, North American Free Trade Agreement, Bretton Woods System

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Published on 19 Apr 2013
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UTSC
Department
Political Science
Course
POLD89H3
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of 12
Terms for POLA84 Final
1. Bretton Woods System
!- A conference of 45 sovereign states at hotel Bretton Wood, New Hemisphere
!- The purpose of the conference was to secure international monetary cooperation, stability
!currency rates and to expand access to hard currencies
!- Led to the creation of WTO, for members to address international trade issues
!- IMF and the IBRD were established as part of this system
!- Under the BS, the US dollar was pegged to gold and all other currencies pegged to the US
!dollar. With lots of spending, the amount of dollars in circulation exceeded the amount of
!gold used to back the US dollar. After being pulled back into a recession in 1960s, president
!Richard Nixon declared that i could no longer be pegged to gold, thus the end of BS system
2. “Emerging Economy”
!- The emerging economy also known as the Emerging Market Economy (EMEs) describes
!the countries who have been repeatedly hit by International financial crisis since the mid
!1990ʼs
!- EMEs are characterized as transitional, meaning they are in the process of moving from a
!closed economy to an open market economy while building accountability within the
!system. Examples include the former Soviet Union and Eastern bloc countries.
!- One key characteristic of the EME is an increase in both local and foreign investment. A
!growth in investment in a country often indicates that the country has been able to build
!confidence in the local economy. Foreign investment is a signal that the world has
!begun to take notice of the emerging market, and when international capital flows are
!directed toward an EME, the injection of foreign currency into the local economy adds
!volume to the country's stock market and long-term investment
3. European Parliament
!- The European Parliament (EP) is a branch of the European Union (EU) that consists of 75
!members. It is the only directly-elected body within the EU
!- The parliament holds a three fold action: It is one of the European decision makers; it
!carries Community acts, its Legislative Power. Its Budgetary Power allows it to define the
!definitive budget. It is enabled to reject it
!- It also holds a political control of the institutions: it can ask the Commission to submit a
!proposal to the Council or ask written or oral questions to the institutions
!- As part of the EU, the EP has been vital in the creation of a modern state. The
!development of the EP is an example of political globalization because it incorporates the
!political activities of countries within a region. The EP focuses on regional politics due to the
!increase in the importance of regional events
4. The European Union
!- An economic and political union or confederation of 27 member states which are located
!primarily in Europe
!- The EU can be seen as a mixed system of participation, regulation, and action, epitomized
!by its three pillar institutional structure. First pillar containing the European Community with
!its economic powers and procedures, the second containing the Common Foreign and
!Security Policy, and the third containing provisions for justice and home affairs
!- EU contributes to global government by encouraging the building of transnational networks
!and providing a model of continuous negotiation as a way of coping with the emergence of
!a global political economy
!- The main legal acts of the EU come in three forms: regulations, directives, and decisions.
!Regulations become law in all member states the moment they come into force, without the
!requirement for any implementing measure, and automatically override conflicting domestic
!provisions. Directives require member states to achieve a certain result while leaving them
!discretion as to how to achieve the result. Decisions offer an alternative to the two above
!modes of legislation. They are legal acts which only apply to specified individuals,
!companies or a particular member state.
5. FAO
!- Food and Agriculture Organization. The objective of FAO is eliminating hunger and
!improving nutrition and standards of living by increasing agricultural productivity
!- It coordinates the efforts of governments and technical agencies in programs for
!developing agricultures, forestry, fisheries, and land and water resources
!- It maintains information and support services, including keeping statistics on world
!production, trade, and consumption of agricultural commodities
!- In 1974 World Food Conference, held in Rome during a period of food shortages in the
!southern Sahara, prompted the FAO to promote programs relating to world food security,
!including helping small farmers implement low-cost projects to enhance productivity
6. GATT (General Agreement on Tariffs and Trade)
!- a multilateral agreement designed to provide a framework to negotiate trade barrier
!reductions among nations, signed by 150 countries. It was created when the US senate
!refused to ratify the ITO charter
!- The workings of the GATT agreement are the responsibility of the Council for Trade in
!Goods (Goods Council) which is made up of representatives from all WTO member
!countries
!- There have been 8 rounds of negotiation since the formation of the GATT, the most recent
!round being the Uruguay Round. When the Uruguay Round was complete, there was an
!agreement among 117 countries to decrease trade barrier and to create more detailed and
!enforceable world trade regulations
!- The WTO acts as a forum for debating further reductions of trade barriers and for settling
!discrepancies in policy, and also enforces trade rules signed in the agreement
7. Global Governance
!- The political interaction of transactional actors (both state and non state) aimed at solving
!global problems affecting more than one state or region, such as environmental degradation
!and nuclear proliferation
!- Global governance exists mainly in the context of globalization. In response to the
!acceleration of interdependence on a worldwide scale, global governance designates
!regulation intended for the global scale
!- Global governance affects states and how they interact with each other. It also affects the
!political economy. Governance should focus on the political economy due to the changes
!that have taken place in terms of changes in social structures in the post war era
!- When issues emerge, this called for the emergence of global governance. Institutions play
!a key role in terms of governance. One such example of an institution is the World Trade
!Organization. Through the use of multi-level governance, the WTO operates as a rule based
!institution that provides framework for the rules of trade. The WTO shapes the politics of the
!trade regime through the use of multi-level governance, which can be identified as a method
!of global governance
8. Gross National Product
!- The total value of goods and services produced by a countryʼs citizens, plus the income
!earned by citizens abroad, minus the income of foreigners within that country
!- GNP can help provide an idea of the contribution foreign direct investment has to a
!countryʼs economy. However, GNP is used less frequently due to the increased number of
!citizens abroad as a result of globalization
!- GNP and GDP and GDP/GNP per capita are often used to determine economic and
!welfare strength of a country
!- GNP is a fairly good measure of inequality, as richer countries tend to have a good
!health care system, infrastructure and the living conditions tend to be good for a majority of
!the population. Poorer nations with low GNP a basic or no health care system in place, the
!infrastructure tends to be undeveloped in many regions and living condition are poor. There
!is a strong correlation between GNP and the development of a country
9. Hyperglobalizers
!- Hyperglobalizers believe that globalization is growing fast and affecting us all more and
!more, so that our lives are all subject to the disciplines of the global market
!- Hyperglobalizers see regional trade pacts like NAFTA, Mercosul, FTAA, and the EU as
!well as international state trade agreements like GATT and the WTO as manifestations of a
!new global period reflecting an enormous and relatively recent historical transformation
!- They believe governments can no longer control the economy. It is governed by market
!forces. Markets are most effective and productive, and cannot be skewed by political
!manipulations. They also believe the main factor accelerating globalization is free trade
!- The main supports of this concept are Fukuyama and Ohmae
10. ILO
!- The International Labour Organization is an organization which has a long history of
!improving working conditions and promoting social justice and human rights
!- Created to deal with the widespread of industrialization of Europe in the 19th century
!- It believes: Labour is not a commodity. Freedom of expression and association are
!essential to sustained progress. Poverty anywhere constitutes danger to prosperity
!anywhere. All human beings, irrespective of race, creed, or sex, have the right to pursue
!both their material well-being and their spiritual development in conditions of freedom and
!dignity, of economic security and equal opportunity
!- The executive body of the ILO is compromised of 28 government representatives, 14
!employersʼ representative, and 14 employeesʼ representatives. 10 of the government seats
!are held by representatives of member states which the organization has categorizes as of
!chief industrial importance: Brazil, China, France, Germany, India, Italy, Japan, the Russian
!Federation, the United Kingdom, and the US
11. Interdependence
!- This term was first used by Karl Marx in the Communist Manifesto. It describes the
!universal interdependence of nations and compares it to the old local way of
!interdependence and self-sufficiency
!- The overall idea is that co-operation between countries is necessary to sustain life. This
!idea is assisted by advancements in technology, which means mass production of goods.
!Mass production of goods means that we can now export to other countries for profit, those
!countries that need certain products they canʼt produce themselves. Co-operation between
!countries also enhances communications because it can link governments so they can
!trade their countryʼs goods!