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Int Trade

1) Global powers set up organizations like the IMF and World Bank after the 1930s depression to encourage free global trade and prevent another economic crisis. 2) The IMF lends money to countries with economic issues but requires cuts to public spending, which critics say increases poverty. The World Bank also lends with conditions like price increases and spending cuts through "Structural Adjustment Programs" that have shown little success. 3) There is much outrage over globalization due to criticisms of the IMF, World Bank, and falling developing country trade shares as well as subsidies and tariffs maintained by wealthy nations that disadvantage others.

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103 views10 pages

Int Trade

1) Global powers set up organizations like the IMF and World Bank after the 1930s depression to encourage free global trade and prevent another economic crisis. 2) The IMF lends money to countries with economic issues but requires cuts to public spending, which critics say increases poverty. The World Bank also lends with conditions like price increases and spending cuts through "Structural Adjustment Programs" that have shown little success. 3) There is much outrage over globalization due to criticisms of the IMF, World Bank, and falling developing country trade shares as well as subsidies and tariffs maintained by wealthy nations that disadvantage others.

Uploaded by

D Attitude Kid
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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International Trade

Trade Barriers
• the EU’s internal market is about
removing barriers to free movement
of goods, services, people and capital
• the flow of goods and services
in the world economy is also important
• organisations have been set up
to encourage the removal of barriers
to free global trade
Why the stress on free world
trade?
• The world economy went into a deep
depression in the 1930s, as many
countries closed their barriers to trade
with other states. This led to:
• Mass unemployment
• Social upheaval
• Financial crisis
and the Second World War
How to prevent chaos happening
again?
• Global powers set up bodies
to support international trade
• International Monetary Fund
• World Bank
• All countries encouraged to join
these organisations, or face
exclusion from benefits
of free world trade
What do the IMF and World
Bank do?
IMF:
• Lends to countries with balance
of payments problems
• Pushes for economic reforms
• Reports on policies in member
states
What do the IMF and World
Bank do?
World Bank:
• Aims to help development by
advising and lending – with many
conditions
• Countries encouraged to lift import
and export barriers, cut subsidies
and remove price controls
Criticisms of IMF
IMF only lends money if countries
agree to:
• Sell their resources cheaply
• Cut public spending
Critics say this serves to increase
the problems of poverty in poor
member countries
Criticisms of World Bank
Loans depend on countries agreeing
a ‘Structural Adjustment Programme’
• Leads to rapid increase in price
of goods in country
• Increases poverty
• Lower investment and cut social
spending
Little evidence that these policies work
What about the World Trade
Organisation (WTO)?
• The WTO deals with the rules of
trade between countries
• It developed from the General
Agreement on Tariffs and Trade
(GATT)
• WTO agreements set the ground
rules for international commerce
Why so much outrage over
globalisation?
Other than the criticisms raised earlier,
opponents of globalisation point to:
• Falling share of world trade taken
by developing countries
• Subsidies and tariffs set by rich
developed economies: USA steel tariffs,
EU agricultural subsidies are two
of the culprits

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