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Unformatted text preview: Lecture 19: Whats the problem? Question time: Didnt you go a little overboard? Last time I said in effect that the WTOs Dispute Settlement Body was a court. This is a bit overstated. It looks and acts like a court in that it weighs evidence and makes judgments based on its interpretation of a legal document, the trade treaty. But in one crucial respect its not like a court. A court has the power to compel enforcement of its orders. It can send the sheriff to seize my property and sell it if I owe money, and it can seize my body if I dont cooperate. The DSU has no such powers. It does not dispose of force. It can issue judgments, such as that the US damaged Korean steel exporters, and order the Congress to pay damages to the Koreans and repeal the tariff, but it cant use force to compel compliance. It this respect, the idea that the ultimate power has been ceded to a world body is not correct, and this ultimate power is still retained by the worlds different nations. Nonetheless, if the US Congress simply refused an order the disruption to the world trade order would be so great, and the ensuing anarchy would be so frightening, that I dont believe it will happen, and in fact it hasnt happened yet. In the steel case, the tariff was repealed. In the cotton case, US cotton subsidies were modified; the Brazilians claimed the modification did not constitute a full compliance, the WTO agreed and the issue is therefore back before the Congress. Introduction: Globalization and contemporary politics . The burden of the last three lectures has been that free trade increases the wealth of the worlds economy, because it enables the worlds productive resources to be employed more efficiently. In fact, it increases the wealth of the country that practices it. Theres a tendency to respond to the protectionism of other countries with ones own protectionism, to level the playing field. In fact, a better term for this is cutting off your nose to spite your face. Its as if your neighbor burns his house down and pollutes the atmosphere, so you decide to get even by burning your house down. But at the same time, contemporary politics have running exactly the other way. To recapitulate the politics of trade over the past 15 years, since the passage of NAFTA: The first contemporary politician who tried to build a career based on opposition to free trade was Pat Buchanan, an ultra-right winger who ran for the Republican Presidential nomination in 1992. Buchanan, an ultra-right winger who ran for the Republican Presidential nomination in 1992....
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This note was uploaded on 07/08/2008 for the course GEOG 20 taught by Professor Acker during the Spring '08 term at University of California, Berkeley.
- Spring '08