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International Trade Agreements and Organizations

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International Trade Agreements and Organizations
International Trade Agreements and Organizations

The Increase of Globalization
Showed a dramatic increase after WW2 Why? Growth in…
Communication
Technology
Travel
Baby Boom
Advantages of Globalization
Outsourcing
Lower prices
Improved human rights
Increased productivity
Innovation (due to increased competition)
Disadvantages of Globalization
Loss of local jobs
Exploitation of cheap labour
Pollution
Disease
Unhealthy products being spread around (e.g. drugs, fast food)
Increase in income gap (the rich get richer, the poor get poorer)

A History of Trade Agreements
Increase in globalization coincides with formation of IMF and World Bank
1944 Bretton Woods Conference
Led to formation of many trade organizations
Trade Agreements:
An enforceable treaty between two or more countries that addresses the movement of goods and services, eliminates trade barriers, establishes terms of trade, and encourages foreign investment

Types of Agreements
Multilateral
Involve three or more parties
NAFTA, European Union
Bilateral
Involve only two parties
Canada-Costa Rica Free Trade Agreement, Canada-Israel Free Trade Agreement

NAFTA Review
Advantages?
Increased jobs in all countries involved
Job creation
Access to raw materials, talent, capital, technology
Allows North America to be competitive against rest of the world
Disadvantages?
Jobs are lost to Mexico due to low labour costs
Wage gap has risen in US
Increase in pollution in Mexico
Small Mexican farmers can no longer compete
Loss of Canadian culture and Canadian companies being lost to foreign investors (e.g. Canadian company Zellers is being bought by American company Target)

Tax Treaty
Make business operations more predictable for companies going global
Allow goods, capital, and technology to move easily across borders
Investor confidence improved

Why the European Union
Windsor to Montreal is 1000km (2 provinces, 1 country)
Budapest to Amsterdam is

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