Agenda
Questions?
Review
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Test 1, October 6
Interdependent Global Economy
Canada’s trade structure
Pacific Rim
World system theory
Dependency
Terms of Trade
Multinational Enterprise
Test 1 will be based on
the following sources:
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Wheeler et al. Chaps 1-4
Lectures up to Monday, October 4
Scan the introduction to NAICS
Californian Perspective on Regional
Economic Development Policy in Canada
Scan the CAMI site
Look over the WTO pages on the Seattle
and Doha Ministerials, paying special
attention to “Criticism, yes…misinformation,
no!”
Trade as a Measure of
Global Interdependence
International trade: one measure
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Merchandise trade
Trade in services
Deeper integration
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Foreign direct investment
Strategic alliances
Finance
Supranationalism
Canada’s International Trade Balance,
2001
($ 000,000)
Commodity Classification
Section I Live animals
Section II Food, feed, bev. & tobacco
Section III Crude materials, inedible
Section IV Fabricated materials, inedible
Section V End products, inedible
Special transactions, trade, exports
Other balance of payments adjustments
United States
United Kingdom
Other EEC
Japan
Other OECD
All other countries
Exports
2,394
25,723
54,558
109,058
208,566
8,119
6,221
350,908
6,574
15,727
9,482
10,925
21,023
Imports Balance
398
1,996
18,674
7,050
20,939 33,619
69,444 39,614
227,895 (19,329)
6,843
1,275
6,430
(209)
255,028 95,880
11,863
(5,290)
23,225
(7,498)
10,585
(1,104)
18,626
(7,701)
31,295 (10,272)
Source: Statistics Canada 2003, Cansim II Table 228
Pacific Rim
US “is functioning in the traditional role of a
Third World country” with Pacific rim (p.
61)
Large US deficit with Japan
NICs, 4 little tigers…
One big lion
Canada’s Trade with China
China is now
Canada’s second
largest import source,
ahead of Japan and
UK, 5.5% of total Cdn
imports
In the US, China is the
second largest import
source at 12% of total
imports!
Source Statistics Canada Infomat, April 7, 2004
World-system Theory
Immanuel Wallerstein
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Core
Semi-Periphery
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Periphery
Hierarchy of dominance (hegemony) and
Dependence (subordination)
Wallerstein’s 4 epochs
Dependency Theory
Dependenistas of Latin America (1960s)
underdevelopment as active process,
preventing the development of the periphery
Net economic flows from periphery to core
e.g. brain drain is a “reverse transfer of
technology” exceeding value of forward transfers
of technology with foreign investment
e.g. repatriated profits exceed capital
investments
Foreign aid payments are relatively small
Deteriorating Terms of Trade
Is trade mutually beneficial?
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GATT
WTO in 1995
Traditionally, the periphery exports resource
products to pay for manufactures
But commodity prices have declined relative to
manufactures
Engel’s Law: As incomes rise, proportion of income
spent on food declines
Tech. change in core economies reduces their
consumption of many resource products
Battle in Seattle
Seattle Ministerial Conference in 1999
WTO has few friends:
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A threat to US trade sovereignty
A threat to periphery because WTO controlled
by the wealthy core nations
A threat to all peoples because WTO is
undemocratic tool of MNCs
Does this come as a surprise?
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Intergovernmental organization representing
140 states
Doha Round – a “do-over” announced 2001
at a “Ministerial Conference” in Qatar