2. 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
3. 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
Rise of fascism
and the Second World War
4. 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
5. 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
6. 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
7. 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
8. 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
9. 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
10. 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
