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University of Toronto St. George
Junchul Kim

Chapter 1: Globalisation is fragile; a global market economy depends on the support of states: - decrease in costs of transportation and communication (not a new phenomenon, consistent tendency) - economic liberalization E.g. imports have grown more than exports in the US economy, mainly due to the large inflows of capital, money invested by foreigners willing to take a stake in the US economyanother aspect of growing intl linkages There are gains from trade, i.e. when countries sell goods and services to each other, this exchange is almost always to their mutual benefit; BUT may hurt particular groups within nations, i.e. strong effects on the distribution of income. Protectionist Policies: - shield industries from foreign competition by placing limits on imports, i.e. quota - help them in the world competition by subsidizing exports ** Conflicts of interest within nations are usually more important in determining trade policy than conflicts of interest bw nations. Since WWII, the advanced democracies led by US, have pursued a board policy of removing barriers to intl trade; free trade was not only for prosperity but also promoting world peace; e.g. NAFTA bw US, C
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