Bretton Woods Agreement
-usually have a depression after world war(ex: ww1)
- purpose to avoid another Great Depression
- met in New Hampshire
- created International Bank for Reconstruction and Development (IBRD)
- created International Monetary Fund (IMF)
IBRD is called the ___
International Bank for Reconstruction and Development is called:
The World Bank
What was the Purpose of the IMF
International Monetary Fund
- purpose to avoid country devaluing their countries currency
- PREVENT beggar-thy-neighbor policy
Purpose of the International Bank for Reconstruction and Development?
- to rebuild war torn Europe (succeeded)
- now promotes economic growth in less developed countries
GATT? Why was it created and how does it work?
General Agreement on Tariffs and Trade
- cooperative environment for nations to discuss Trade and Tariffs
- have to agree to treat other nations at LEAST as well as your Most Favored Nation
Most Favored Nation Principle?
-GATT members have to treat every other GATT member as their “Most Favored Nation”
Most Favored Nation is the one you do the most business(trade) with
How did GATT do regarding reducing overall Tarifs? What about reducing overall Quotas and NQNTBs?
Tariffs
-yes, was effective
Quotas and NQNTBs
-no
What replaced the GATT?
World Trade Organization (WTO)
- more powerful enforcement powers
- more powerful mandate powers
4 things the GATT tries to do
TRIP (Trade Related Intellectual Property Rights)
-protect countries intellectual property rights
TRIM (Trade Related Investment Measures agreement)
-establish standards on foreign investments
GAT (General Agreement on Trade in Services)
-get countries to reduce trade barriers in services
Reduce trade barriers in Agriculture
-WTO not very effective rn at this
Regional Trading Bloc
- country treats foreign nation with trading benefits with them BETTER than foreign nation who has no benefits
- try to benefit REGIONAL countries, not all countries
What lead to the Great Depression
Germany prints money to pay off war debt (inflation)
- causes germany’s prices to go down
- foreign countries buy germany’s products over their own domestic
- causes domestic countries buying germany’s goods to have to lower there prices
- dominoe effect
4 types of Regional Trading Blocs
Free Trade
-countries get together and agree to lower trade barriers
Custom Union
-neighboring countries get together and make “customs” for trade barriers
Common Market
- is a custom market
- AND trade barriers dropped on manufacturing
- neighboring countries agree to do comparative advantage
Economic Union
- complete process
- putting countries together basically
- neighboring countries agree to act as one economically
Advantages to Regional Trading Blocs
- increase competitiviness
- may increase FDI (foreigners invest in neighboring countries you have sided with to get your domestic treatment)
- increase availability of technology, information, etc.
EU?
European Union
-purpose was to promote peace and economic proesperity
4 sections that make up the EU and their purpose?
European Council of Ministers (most powerful)
- ministers from each country to represent their issues
- lower countries = lower votes on decisions
- strive/work towards unanimous votes
Commission of the European Union (propose legislation)
- has 28 members (1 per country)
- money to Europe (how they get EU budget money)
- 33,000 employees in EU Bueaucracy (1/5) translators
Parliament (least powerful)
- represents local population interests
- power recently expanded due to Treaty of Rome
European Court of Justice
- 28 justices
- make sure countries are following rules/laws
- interpret EU laws
- 6 year term
NAFTA?
- regional trading bloc like European Union
- Canada, Mexico, United States
- Free Market system (but restrictions on FDI)
What is a screwdriver plant? (tis a feared thing in NAFTA)
where a foreign nonmember makes something in its home country, slips it to member nation and where only “one screw” needs to be applied making it “made in” and within trade bloc
(provisions to protect: Rules of origin and need substantial transformation, need court to determine)
