Is Is Benefical to Be a Part of a Multilateral Agreement During a Finanacial Crisis?

!"#$%&'()#%*+,$#%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%-./%#01%23456675628% OPTION 1 REGULAR EXAM IN IB55 FALL SEMESTER COPENHAGEN BUSINESS SCHOOL 1. Introduction Globalization, increasing growth and free trade were a major part of the global picture before September 2008. The quarter-century up to the crisis saw the fastest increase in economic growth and prosperity in history. International trade enlarged seven folded between 1980 and 2007, outpacing the rise in global GDP in the same period.1 Much of the sharply increasing trade figures were supported by multilateral agreements and organizations such as WTO and EU. The recent years turbulent economical and financial situations has left many countries with huge economical challenges. Falling growth rates and increasing deficits has been fatal consequences; accompanied with high unemployment rates and diminishing trade numbers. At the same time there has been a rising development in the emerging markets, leading to a heated competition between the BRIC and other leading countries at the world trading markets. China has become the biggest export country in the global economy2, and is also one of the most prominent trading partners to the US. Although China has been experiencing fairly stabile GDP growth, the recession is affecting their trade figures in a negatively fashion. The downward trend is a dangerous element when looking at developing aspects. Export constitutes 39,7% of Chinas GDP, and is a vast component for the country’s economic growth.3 The US on the other hand has experienced the financial crisis at first hand with increasing unemployment rates and declining GDP number. “The risk of protectionism is evitable in times of economic crisis: slow demand, slow supply, creates unemployment and unemployment produces social pain and people looking for being %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%
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”Trade, Globalisation and Emerging... [continues]

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