Global Politics and Economy Quiz

Study Notes

The global economy refers to the interconnectedness of national economies through trade, investment, and financial flows.
The global economy is characterized by an uneven distribution of gains, leading to winners and losers in global economic exchange.
The distribution of gains in the global economy leads to political battles between winners and losers, influencing national and international policies.
Winners advocate for deeper integration into the global economy, while losers seek to erect barriers.

International Political Economy (IPE) studies the relationship between politics and the global economy.
IPE focuses on how political forces shape global economic developments and how economic systems influence political dynamics.
IPE highlights the political struggles between winners and losers in the global economy, examining the distribution of benefits and costs.

### Four Issue Areas of Global Economy

### Focus of the Course

The course aims to explain government policy choices based on the interaction between societal interests and political institutions.
Interests represent the economic policy preferences of different groups in society.
Political institutions define the rules that govern decision-making processes.

Globalization of production networks, also known as global value chains, involves international collaboration in manufacturing and supply chains.
Examples include Toyota's global car production and Ferrero's Nutella production across various countries.
The rapid growth of world trade, averaging 6% growth rate, fuels the globalization of production networks.
The World Trade Organization (WTO) and its predecessor, the General Agreement on Tariffs and Trade (GATT), have significantly contributed to the growth of world trade.
Government decisions shape the rules and institutions governing global trade.

Located in Geneva, Switzerland, the WTO serves as a platform for trade negotiations, administering trade agreements and resolving trade disputes.
The WTO replaced the GATT in 1995, inheriting many rules that govern international trade relations.
The WTO has 164 member countries.
The WTO functions as a political system with four key components: principles and rules, intergovernmental bargaining process, dispute settlement mechanism, and enforcement.

Market liberalism: The economic rationale promoting free trade and minimal government intervention.
Nondiscrimination: Ensuring fair treatment of trading partners by prohibiting discriminatory practices and promoting equal opportunities.
The WTO aims to promote free trade by reducing trade barriers.