Chapter 8 - International Trade Flashcards
What amounts to a sixth of the total economic activity in the world?
International trade
Scholars of international political economy (IPE) study the politics of what?
international political activities- especially trade, monetary relations and multinational corporations
____ are the most important actors in IPE, but not as important as in __________.
States & international security
True or false: Actors in IPE tend to act in their own interests.
True
What is reflected in the trade regimes that have been established around the world, and the idea of trade in general?
Reciprocity
What is the role of states?
Trade, Monetary Policy, Fiscal Policy, MNC Economic Integration
What are the two major approaches within IPE?
Liberalism and Mercantilism
What generally shares with realism the belief that each state must protect its own interests at the expense of others?
Mercantilism
Mercantilism emphasizes what?
relative power
What matters when it comes to Mercantilism?
its position relative to rival states
In mercantilism the importance of economic transactions lies in their implications for their what?
military
When it comes to mercantilism, economics should serve what?
politics
Creation of wealth underlies what?
state power
Where and when did mercantilism achieve prominence?
several hundred years ago in Britain, but it declined in the 19th century
Favorable balance of trade is what?
positive balance of trade versus negative balance of trade
What shares the belief in the possibility of cooperation to realize common gains?
Economic liberalism
What holds that by building international organizations, institutions, and norms, states can mutually benefit from economic exchanges?
Economic liberalism
True or false: In Economic liberalism, it holds that by building international organizations, institutions, and norms, states can mutually benefit from economic exchanges.
True
What are two theories of economics and also ideologies that shape state policies?
Liberalism and mercantilism
Liberalism works better in _____ than in _____
Microeconomics than in macroeconomics
The term “___” has come to embody the dominance and inequity of the application of power by the great powers at the expense of the middle and lesser powers.
neoliberal
Two commodities of great importance in the world are ____ & ____.
two examples are ___ & ____
oil and cars
ex. Saudi Arabia and Japan
3 examples of political interferences in markets
- World markets
- Sanctions
- Autarky
Governments can apply ____ against economic interactions of certain kinds or between certain actors
Sanctions
What is one example in which sanctions have backfired?
U.S. and Russia - pipeline
What is Autarky?
Self-reliance – avoid trading and instead try to produce everything the state needs itself
Two countries that are an example of Autarky?
Albania and China’s Cultural Revolution
What refers to when states try to manipulate international trade to strengthen one or more domestic industries and shelter them from world markets?
Protectionism
Protection of domestic industries from what?
International competition
Protection of industry vital to what?
National security
Protection provides what kind of effort?
Defense effort to ward off predatory practices by foreign companies or states
Protection discourages what?
Imports
What are subsidies to a domestic industry, which allow it to lower its prices without losing money?
Tax breaks
True or false: Protectionism can have both positive and negative effects on an economy
True
What links the world across space?
Information technologies
What process based on free trade is shaping the international economic agenda?
Global integration
What is central to trade regimes?
Wold Trade Organization
What is a global, multilateral IGO that promotes, monitors, and adjudicates international trade?
World Trade Organization
What is this an example of?
Most favored nation (MFN) concept: trade restrictions imposed by a WTO member on its MFN trading partner must be applied EQUALLY to all WTO members.
Reciprocity
What is an exception to reciprocity within the WTO?
Generalized System of Preferences - Trade concessions to third world states to help economic development
Most international trade is governed by what?
Bilateral and Regional Agreements
Bilateral trade agreements are what?
Reciprocal arrangements to lower barriers to trade between two states
Groups of neighboring states agree to remove the entire structure of trade barriers and adopt a common tariff toward states that are not members of the agreement (customs union). This refers to what?
Regional free-trade areas
What do you call an association of producers or consumers, or both, of a certain product – formed to manipulate its price on the world market?
Cartels
Consumers do not usually form cartels, but the major oil-importing states formed their own organization.
What is this organization?
The International Energy Agency (IEA)
What agency coordinates the energy policies of major industrialized states?
International Energy Agency (IEA)
Economic agreements between states depend strongly on what?
The reciprocity principle for enforcement
What complicates the enforcement of equal terms of trade?
Differing interpretations of what is “fair”
What is dumping?
Retaliation aimed at offsetting the advantage enjoyed from goods imported at prices below the world market
Trade cooperation easier to achieve under what?
Hegemony
What is transforming not only trade, but money, business, integration, communication, environmental management, and the economic development of poor countries?
Globalization
What are things that have happened to evolve the world economy?
- Technological innovation
- Great Depression and resultant protectionist policy
- Keynesian economics
- WWII
- Soviet bloc - centrally planned economy
What have been some resistances to globalization?
-Growing nationalism
-Competition from low-wage countries in the global South
-Human rights
Environmental issues
-Benefits of free trade more diffuse than the costs
