g In July 2008 after yet another collapse of Doha Round talks Australia and

G in july 2008 after yet another collapse of doha

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Australia and Chile sign bilateral FTA. "It comes as the DOHA round collapsed, and those countries that believe in free trade have to move forward despite the fact that DOHA negotiations did not produce an outcome. Australia and Chile share a view of what should be done in the world economy and it makes a lot of sense we work together, taking the FTA as a starting point" The biggest obstacle to more multilateral trade deals is the changing balance of global economic power. Brazil, Russia, India and China (the BRICs) see themselves as countries still poor enough to need protection for their industries while the rich ones lower their own barriers, especially to agriculture. But the rich world increasingly views the BRICs as full-fledged economic competitors whose state capitalism is incompatible with a free and open global economy
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LISA YANG IBUS20002 Business in the Global EconomyBilateral / Multilateral Global Agreements 1.prepare the road to global FTAs: export sectors gets strengthened → more political clout → easier to agree to multilateral talks 2.Quicker (not 164 countries that need to agree) 3.Easier (excluding tough/sensitive issues) Fewer gains from trade (increased complexity; limited scope; bureaucratic costs; trade diversion?) Bureaucracy in determining “nationality of product” to determine if it should enjoy privileged treatment or not Difficult and expensive process Compare: GATT agreements contain “most favoured nation” clause: a favourable tariff offered to one WTO member must be offered to all other members. Trade Diversion: By setting up a bilateral/regional FTA, imports from a lower-cost non-member country are replaced with imports from a higher cost member country – which is privileged due to paying no/lower tariffs. Consumers pay indirectly through higher prices “…the WTO remains the only international economic forum in which developing countries are on an equal footing with their rich-country counterparts. Because all decisions at the WTO are taken by consensus, every country that takes part in the global trade talks has the opportunity to block a deal. The same cannot be said of the regional and bilateral negotiations that have become so popular of late.” INTERNATIONAL INSTITUTIONS No institution with a mandate or real capacity to assess systemic risk in financial markets. No institution empowered to speak from the perspective of global economic interdependence and to counsel states on the global picture. Coordination mechanisms among central bankers and regulators exist, but they are weak. Skewed towards an economic order that is increasingly outdated. Emerging economies - especially China - are growing sources of capital and economic demand. They are tightly knit into the global economy. Bodies like the G8 simply do not reflect this changing economic architecture. Effective multilateral governance of the global economy will require institutions that do.
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