POLS 360 Exam 2 Study Guide Is Walmart Good for America film Push and pull factors Rubbermaid bullied by Walmart was most admired in 1994 Walmart in 2004 2004 285 bil International Trade consumers vs workers Dependency Theory raw materials China then the finished goods America Low prices negotiation tactics reverse auction Walmart cut Rubbermaid products WTO antidumping prices goods below market price no profit make competitors Currency crisis if Scotland decides to leave British pound other option is Euro EU Confidence crisis Economically stable high GDP International Trade JS Mill 3 main gains of trade 1 Money direct gain 2 Increase productivity indirect 3 Cosmopolitan benefits Adam Smith The Wealth of Nations Up on absolute gains and efficiency Absolute advantage Autarky can we produce everything cheap resources work productivity decreases over time not everyone has absolute advantage Comparative Advantage What should you trade 1 Good in which you have greatest abs adv 2 Good in which you have least abs disadv Productivity Transfer of tech trickle down effect Competition price low and supply is up outsourcing cosmopolitan contact with others 1 Kantian School information econ and political fortunes democratic peace demtripod 2 Asymmetrical Trade power militarized vs diplomatic war 3 Rational Expectations trade with allies and not adversaries security externalities wealth into military strength Who Wants Free Trade Systemic approach Classic theory Anarchy State and non state affect how decisions are made Society centric approaches societal preferences interest groups big businesses elites democracies endogenous protection theory State centric approaches democracies vs autocracies Two Level Game Robert Putnam 1988 International policy Rational and unitary actors Senate is the only body to turn treaty to domestic law Internationalization Keohane and Milner High trade flows and expansion of capital markets 1 Partisan comp of govs lib vs cons 2 Strength of labor organizations corporatism 3 Political institutions division of power How do domestic institutions affect inter Policy 1 Block signaling misinformation 2 Freeze policies by creating prices for change reciprocity 3 How is this going to be effective Trade liberalization Free trade hurts small local businesses unskilled workers Weak vs Strong States Influenced by interest groups Two Level Game The GATT increase global trade High tariffs beggar thy neighbor policies states punish each other for high tariffs negative reciprocity 1 Acted as forum for multilateral talks to lower tariffs 2 Rules of conduct dispute resolution avoid retribution GATT Rules 1947 1995 1 Lowering of trade barriers quotes 2 Non discrimination 3 Once a concession is made cannot be taken back 4 All trade disputes settled by compensation Post materialism because our economy needs have been met GATT has 9 rounds Rounds of negotiations that last years focus on lowering taxes Uruguay Round 1986 1994 WTO creation non tariff barriers intellectual property GATT vs WTO GATT is not permanent WTO is WTO has numbers GATT had contracting parties GATT focus on tangible goods WTO odds intel Property WTO perm dispute body GATT no Problems with WTO 1 Labor 2 Environment 3 Democracy WTO Dispute Settlement 1 Does the WTO actually affect trade Concerns democracy core vs periphery race to the bottom institutional standing formality status instit Embeddedness regional vs multilateral Gravity Model states raise GDPs states geographically close trade more together Dispute Settlement cheating consultations 60 days 1 panel formation 2 hearings 6 months decision made Appeal 90 days 3 come in line Retaliation 4 legal capacity Regionalism 1 2 3 4 Theories of Integration Negative vs Positive Integration Steps of Integration Do PTAs liberalize trade Within a state Between states supranationalism Cohesiveness and similarities make a PTA successful neofunctionalism Ernst Haas 1950s democracies capitalist spillover effect critique simplistic Liberal Intergovernmentalism Andrew Moravscik Interest group 1 Domestic shape preferences 2 International bargaining more influence are wealthy and high populated states 3 Institutionalization of that agreement How do we get integration Negative breaking down barriers remove tariffs Positive common policies ex Currency Stages of Integration 1 2 3 4 5 Free Trade Area ex NAFTA Eliminating trade barriers tariffs negative Customs Union Adds on common external tariff positive Common Market Movement of all factors of production people capital negative Economic and Monetary Union Integration of banking system monetary policy positive theoretical Political Union positive PTAs are trade divergent Trade creation more trade within organization Trade diversion less global trade