Political Systems

Tuesday, September 11 A global look at industries (cont'd)

Goods

aerospace
agriculture
cars
chemicals
computers
energy
pharmaceuticals
precious metals
raw materials
textiles

Services

advertising
airlines
entertainment
finance
health care
insurance
internet
retail
telecommunications
travel

Share of oil Production

OPEC (excluding Saudi Arabia) 30 %
Saudi Arabia 12 %
Russia 9%
North Sea 9%
United States 9 %
Others 31 %

Drug Use (% of World Health Market)

Vitamins and Dietary Supplements 33.5 %
Cold and Allergy Remedies 18.8 %
Medicated Skin Care 15.0 %
Analgesics 13.1 %
Digested Remedies 12 %
Other 6.7 %

Where Tourists come from in 2020 (millions)

Germany 153
Japan 146
USA 123
China 100
Britain 95
France 55

Political Systems

Pure democracy <------------------------ Totalitarian

Economic Systems

Pure Market Economy <------------------------- Centrally Planned Economy

Why do Governments intervene in International Trade?

National sovereignty
National security
National prestige
National welfare

Protectionism is used to lessen the harm done to victims of free trade.

Protectionism and Trade Restrictions

Tariffs: taxes on goods moving across an economic or political boundary. They can be imposed on imports, exports, or on goods in transit through a country on their way to some other destination. Can be export, import, punitive.
Nontariff Trade Barriers:

Formal Trade Restrictions	Administrative trade Restrictions
Nontariff Import Restrictions (price-related measures) Surcharges at border port and statistical taxes nondiscriminatory excise taxes and registration charges Discriminatory excise taxes, government insurance requirements Nondiscriminatory turnover taxes Discriminatory turnover taxes Import deposit Variable levies Consular fees Stamp taxes Various special taxes and surcharges	State Participation in Trade subsidies and other government support government trade, government monopolies, and granting of concessions and licenses laws and ordinances discouraging imports problems relating to general government policy government procurement tax relief, granting of credit and guarantees boycott
Quantitative Restrictions and similar specific Trade Limitations (Quantity-related measures) Licensing regulations Ceilings and quotas Embargoes Export restrictions and prohibitions Foreign exchange and other monetary or financial controls Government price setting and surveillance Purchase and performance requirements Restrictive business conditions Discriminatory bilateral arrangements Discriminatory regulations regarding countries of origin International cartels Orderly marketing agreements Voluntary restraint agreements Various related regulations	Technical Norms, Standards and Consumer Protection Regulations Health and safety regulations Pharmaceutical control regulations Product design regulations Industrial standards Size and weight regulations Packing and labeling regulations Package marketing regulations Regulations pertaining to use Regulations for the protection of intellectual property Trademark regulations
Discriminatory Freight Rates (Flag Protectionism)	Customs Processing and other Administrative Regulations Antidumping policy Customs calculation bases Formalities required by consular officials Certification regulations Administrative obstacles Merchandise classification Regulations regarding sample shipment, return shipments, and re-exports Countervailing duties and taxes Appeal law Emergency law

The General Agreement on Tariffs and Trade - GATT and the WTO

GATT created in 1947 by 23 nations
for the liberalization and promotion of nondiscriminatory international trade between participating nations
settlement of trade disputes
periodic trade rounds or negotiations
practice of reciprocity

nondiscriminatory: all members are treated the same, MFN (most favored nation status)

WTO took over after 1995

The International Monetary Fund (IMF) and the World Bank

created in 1944 in Bretton Woods
the IMF was created to promote orderly and stable foreign exchange markets, maintain free convertibility among the currencies of member nations, reduce international impediments to trade, and provide liquidity to counteract temporary balance of payments disequilibria
the World Bank gives long-term loans, mainly to developing nations (15 to 25 years)

Article: IMF Acts to Pre-Empt Emerging-Market Crisis

Three major changes in the Global Policy Environment

reduction of domestic policy influence
weakening of traditional international institutions
sharpening of the conflict between industrialized and developing nations

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