UNILATERAL TRADE ORDER

 A unilateral trade agreement is a commerce treaty that a nation imposes without regard to
others.
 Other nations have no choice in the matter. It is not open to negotiation. The government
should not restrict the rights of its citizens to trade anywhere in the world.
 It benefits that one country only.
 In seventeenth and eighteenth century - Europe international trade was basically a means to
accumulate surplus (gold reserves) in the balance of payments by stimulating export and
restricting import.

Monarchs from Portugal to England used gold

reserves to

 Finance War
 Consolidate authority over domestic constituents

Cobden-Chevalier treaty of 1860

 allowed the UK and France to specialize in commodities based on their respective comparative
advantages and to achieve further advances in industrialization.
 Helped to avoid the eruption of an war between the two countries.

Most Favoured Nation (MFN) Principle

States that any negotiated reciprocal tariff reductions between two parties should be extended to all
other trading partners without condition.

The US Reciprocal Trade Agreements Act in 1934

 Put a stop to any further decline in international trade

 Allowed the president to determine trade policies and eased the pressure put on the congress
for protection
 A return to the principle of MFN
 Provided a solid base for a renewed international trade regime following World War II

MULTILATERALISM:FROM THE GATT TO WTO

 Alliance of multiple countries that pursuing a common goals.

General Agreement on Tariffs and Trade (GATT)

 Started June 30, 1948 until January 1, 1995

 The first worldwide multilateral free trade agreement.
 Eliminate harmful trade protectionism. That had sent global
 trade down 65% during the Great Depression.

3 PROVISIONS

 Each member must confer the most

favored nation status to every other member
 Prohibited restriction on the number
of imports and exports
 Developed countries agreed to eliminate
tariffs on imports of developing countries to boost
their economies.

PROS

•Reduced tariffs.
•Promoted world peace

•Inspired other trade agreements

•Improved communication

CONS

•Destroy some domestic industries

•High unemployment

•Reduced the rights of a nation to rule its own people

•Farmers that stay often grow opium, coca or marijuana, just because they can't grow
traditional crops and stay in business.

World Trade Organization (WTO)

 January 1, 1995 – Uruguay Round of GATT

 The World Trade Organization is a global organization made up of 164 member countries
that deals with the rules of trade between nations. Its goal is to ensure that trade flows
as smoothly and predictably as possible
Actors of Globalization

 MULTI-BUSINESS C0MPANIES
 STATE
 NG0
 IG0
 G0VERNMENT
 ACTIVIST GR0UP