global issues

 Describe comparative advantage, competitive advantage and strategic trade theory. How are they different? Use a real-world example or come up with a hypothetical example in your description of each. Which do you feel is better for the global good?  

Chapter 8
Global Trade

Globalization of Free Trade
Silk Road – earliest example
Models of Trade
Mercantilist
Autarky
Comparative Advantage
Competitive Advantage
Strategic Trade Theory

Globalization of Free Trade
Countries move from protectionist to free trade and back
Corn Laws
Great Depression
Reciprocal Trade Agreement Act – 1934
Creation of institutions to help globally
International Monetary Fund
International Bank for Reconstruction and Development (World Bank)

Globalization of Free Trade
Creation of Institutions to help globally
General Agreement on Tariffs and Trade (GATT)
GATT becomes the World Trade Organization (WTO) in 1993
Most-Favored Nation Clause

Exchange Rates, Budget Deficits and Trade
Exchange Rate
The value of the dollar
Neomercantilism
Trade deficit vs. trade surplus

Global Companies
Fordism vs. post-Fordism
Communication/technological innovations
Financial globalization
Race to the bottom
Made in China
Promotion of Equality
India and the untouchables aka dalits

Global Companies
Labor Unions
Have declined significantly in the US since the 1980s
Public Perceptions
Political Change
Knowledge-Based Economy
Globalization of Individualism
Employment Competition
Global Financial Crisis

Global Companies
Labor Unions
Anti-globalization

Global Trade Disputes
Tariffs
Tax imposed on exports and imports that increase their cost to the consumer
Quotas
Specify limits on the number of products to create a barrier to importing them
Subsidies
Government payments to an industry to help control the price

Global Trade Disputes
Subsidies in Agriculture cause numerous trade disputes
EU – Common Agricultural Policy (CAP)
US – Agricultural Legislation in 1933
Iron Triangle
Genetically Modified Food

Global Trade and the Environment
Environmental protection is used as a barrier to free trade
Shrimp nets
Diseases and Global Trade
Madcow Disease

Trade Blocs
Several reasons for the formation of regional trade blocs
Economic Development
Managing Trade Regionally
Economic Competition
Political and Strategic Considerations
Range from free-trade to economic unions

Trade Blocs/Economic Unions
The European Union
Most powerful trade bloc recognized today
NAFTA
Canada, Mexico, and the US
ASEAN
South American Common Market