LIBERALISM AND ORGANIZATIONS BRETTON WOODS AND THE WTO

LIBERALISM AND ORGANIZATIONS: BRETTON WOODS AND THE WTO

REMEMBER: LIBERALISM AND ORGANIZATIONS International Monetary Fund (IMF) World Bank (WB) International Trade Organization (ITO); later becomes (GATT) then the WTO (more in a bit)

WHAT HAPPENED?

WHAT HAPPENED IN THE INTERWAR PERIOD? Protectionism: placing trade barriers on imports (taxes, quotas, regulations) Tariffs: taxes on imports Inflation: when purchasing power (value of currency) drops relative to price of goods Balance of Payments: governments do not receive what they spend

ENTER LIBERALS (THE WELFARESTATEYONES) Wait, the neoliberaly-Milton Friedmany ones are coming Minimal State… not quite BUT market failures do occur Deficit spending is needed; social programs John Meynard Keynes

BRETTON WOODS INSTITUTIONS International Monetary Fund (IMF): Provide loans, address balance of payment problems World Bank (WB): loans for infrastructure and development projects International Trade Organization (ITO): work with countries to lower tariffs

REMEMBER THIS… 1971, unilateral decision to end Gold Standard Dwindling gold reserves Individual countries began to devalue Bretton Woods?

1970 S DIDN’T END THERE

EFFECTS, NOT IN THE US “Petrodollars” OPEC countries AND oil companies Exxon Mobil, British Petroleum (BP) Save money in US/European Banks Arab exporting states did well, SO did banks and corporations

NOT EVERYONE GOT RICH Latin American and African States Import Substitute Industrialization (ISI), Protectionism Purchasing Oil Cheap, 1950 s-1973

INFLATION

WHO/WHAT COULD HELP, AND HOW? IMF and WB In December 1982, the IMF approves a USD 3. 8 bn loan to the Mexican government. As a condition, the government has to implement a series of free market reforms.

STRUCTURAL ADJUSTMENT Enter liberals, neoliberaly ones To receive loan and development assistance, must engage in domestic policy reforms Welfare state consensus questioned Privatize public enterprises, specialize in exports, remove taxes/deregulation, balance of payments and end inflation

WTO (WORLD TRADE ORGANIZATION) What it is? How does it function? How is it similar, different from the IMF and WB

THE ILO DIES: HAVANA CHARTER 1948, 53 countries signed US Congress, reject Dead

GENERAL AGREEMENT ON TRADE AND TARIFFS (GATT) GATT takes its place in 1947 Eight ‘rounds, ’ 13 to 50 countries Tariff negotiations were held between 1947 and 1994: Geneva (1947), Annecy (1949), Torquay (1950 -51), Geneva (1956), Geneva (1960 -61) the Kennedy Round (1964 -67), the Tokyo Round (1973 -79) and the Uruguay Round (1986 -94) Multilateral meetings, yet bilateral deals https: //www. wto. org/english/docs_e/gattbilaterals_e/indexbyround_e. htm

GATT, CONT… “Australia, Belgium, Brazil, Burma, Canada, Ceylon, Chile, China, Cuba, the Czechoslovak Republic, France, India, Lebanon, Luxemburg, the Netherlands, New Zealand, the Kingdom of Norway, Pakistan, Southern Rhodesia, Syria, South Africa, the United Kingdom, and the United States of America” “Recognizing that their relations in the field of trade and economic endeavour should be conducted with a view to raising standards of living, ensuring full employment and a large and steadily growing volume of real income and effective demand, developing the full use of the resources of the world and expanding the production and exchange of goods, ” “Being desirous of contributing to these objectives by entering into reciprocal and mutually advantageous arrangements directed to the substantial reduction of tariffs and other barriers to trade and to the elimination of discriminatory treatment in international commerce”

MOST FAVORED NATION (MFN) STATUS Country(ies) receive equal treatment All that are party to the round of Negotiations get the same deal Reduce tariffs, trade barriers

GATT TO WTO GATT enforcement, dispute settlement Uruguay round (1986 -1994); 123 countries Create the WTO

WTO AND GLOBAL GOVERNANCE From 123 to 164 members (19 observers, including the EU and World Bank) The Ministerial Conference/General Council Each country, one ambassador MC – once every two years, GC – regularly on implementing and reviewing WTO agenda

WTO AND GLOBAL GOVERNANCE, CONT… US ambassador, Dennis Shea WTO Ambassador, Daniel Shea WTO General Director, Roberto Azevedo Ambassadors, nominated Director, chosen by GC of the WTO

BUDGET

ROUNDS? GATT, called for trade negotiations Doha Round (since 2001) Stalled, over agriculture, medicine, ‘special status’ / exceptions Still… ministerial and general council meetings

DISPUTE SETTLEMENT Since 1995, over 500 cases and 350 resolutions Panels, tribunals “Panels shall be composed of well-qualified governmental and/or non-governmental individuals” Not citizens of country in the dispute 3 to 5 people

MEXICO BEATS THE US!

DETAILS, “TUNA AND DOLPHINS” “Mexico’s complaint, which dates back to 2008, focused on U. S. rules on “dolphin friendly” labeling, which Mexico said unfairly penalized its fishing industry. ” “Mexico said it had cut dolphin deaths to minimal levels but that it was being discriminated against by U. S. demands for paperwork and sometimes government observers. Tuna catches from other regions did not face the same stringent tests, it said. ” Implications?

THE US?

DISPUTE SETTLEMENT/ WTO Does DSM show that weaker states can hold stronger ones accountable? Does the WTO show that the global economy is a rules-bound one, not one that is driven by dominant corporations and the US? Or when we look at the budget of the WTO, do we see a great deal of inequality and US/Europe dominance?