INTERNATIONAL TRADE AND POVERTY FIGHTING ORGANIZATIONS

“THE RELEVANT MARKET TODAY IS PLANT EARTH”

--Thomas Friedman

1A did jan 13 20161A did jan 13 2016

HOW COUNTRIES ARE CLASSIFIED Developed countries have a relatively high per capita

GDP Less-developed countries have a relatively low per

capital GDP GDP (gross domestic product) is the total market value of

all final goods and services produced annually in a country

Per capita GDP is GDP divided by the population

OBSTACLES TO ECONOMIC DEVELOPMENT Rapid Population Growth Low Savings rate Cultural Differences Political Instability and Government Seizure of Private

Property High Tax Rates

RAPID POPULATION GROWTH Population growth rate is the birthrate minus the

death rate Population growth rate is typically higher in less-

developed countries which have: Higher birthrates due to an economy that revolves around

agriculture and no financial assistance for the elderly (like Social Security) so parents need children to care for them in old age

A declining death rate due to medical advances

LOW SAVINGS RATE Banks get the money they loan from people who have

savings accounts at the bank Less-developed countries have low savings rates because

the people are too poor to save They can only afford the necessities of life

Thus, banks can not make loans for capital investments Farmers can’t buy tractors Businesses can’t improve their technology

VICIOUS CIRCLE OF POVERTY Less-developed countries are poor because they cannot

save Without savings they cannot buy capital goods But they cannot save and buy capital goods because they

are poor

CAUSES OF ECONOMIC GROWTH? Little to no government debt

Low taxes invite immigrants Increase in productivity Low tariffs encourage trade

EOC study g

uide

Globalizatio

n #10

INTERNATIONAL ORGANIZATIONS DESIGNED TO PROMOTE ECONOMIC GROWTH

INTERNATIONAL COOPERATION AND AGREEMENTS

International trade agreements can lead to international prosperity and peaceful relationships

North American Free Trade Agreement, NAFTA eliminated trade barriers between US, Canada, and Mexico

signed by President Bill Clinton in 1994 the overall value of intra-North American trade has more than tripled since the agreement's inception

EOC study guideGlobalization #5

INTERNATIONAL COOPERATION AND AGREEMENTS CONT. European Union, EU

over 28 member nationscreates free-trade zones that reduce or eliminate trade barriers

created a single currency

EOC study guideGlobalization #6

INTERNATIONAL COOPERATION AND AGREEMENTS CONT. World Trade Organization, WTO

negotiates new trade agreements resolves trade disputes

From 1930-1995 the average tariff in the US dropped from 59% to 5%

EOC study guideGlobalization #8

World Trade Organization, WTOArguments against the WTO

prioritizes trade and commercial considerations over all other values

refuses to ban imports of goods made with child labor

hurts the Third World

ORGANIZATIONS WORKING TO RAISE THE STANDARD OF LIVING IN MAJORITY COUNTRIESWorld BankInternational Monetary Fund (IMF)

WORLD BANK BASICSPart of the United Nations Created 1944188 member countriesHeadquarters in Washington, DC

EOC study guideGlobalization #9

WORLD BANKAims to reduce poverty in middle-income and poorer countries

Provide low-interest loans and grants for

Education Health Infrastructure Agriculture

EOC study guideGlobalization #9

IMF BASICS:Part of the United Nations Created 1944188 member countries

EOC study guide

Globalization #7

INTERNATIONAL MONETARY FUND (IMF) Purpose is to promote the health of the world economy

How? Maintain an orderly system of payments and receipts between nations

Ensure the stability of exchange rates Facilitate international trade

EOC study guideGlobalization #7 cont

ASSIGNMENT: INTERNATIONAL TRADE BROCHURE Tri-fold a piece of construction paper, so there is a “page”

for:1. Brochure title—including a venn diagram of the

organizations2. NAFTA3. EU4. IMF5. WTO6. World Bank

Under each organization explain: Who (which countries) is in this organization? What is the purpose or goal (vision/mission) of the

organization? How does the organization achieve its goal/purpose? What are some of the organizations successes?