Global Governance System PDF

**DO YOU THINK IS IMPORTANT TO LOOK THE MAIN ACTORS OF THE GLOBAL GOVERNANCE SYSTEM?** Yes, it is, because they are the ones controlling mainly the global governance system. Therefore, their actions and decisions will influence everyone, so we must evaluate them to understand their reasons and the...

**DO YOU THINK IS IMPORTANT TO LOOK THE MAIN ACTORS OF THE GLOBAL GOVERNANCE SYSTEM?** Yes, it is, because they are the ones controlling mainly the global governance system. Therefore, their actions and decisions will influence everyone, so we must evaluate them to understand their reasons and the consequences they will have regarding governance. Geopolitics and geo economy are the ones ruling the world. INTERNATIONAL GOVERNANCE SYSTEM: - [International World Order]: power seeking and balance of power (IIRR theories) - [International Economic Architecture]: economic influence and control (international policies) trade, finance, development **WHICH ARE THOSE MAIN ACTORS?** - [USA:] governance and liberalism - [China:] more control of trade (system based on capitalism, but has a lot of control from the government) - [India:] most populated country, huge market growing fast, technological development, English fluent, soft power, democracy **WHO IS THE MOST SIGNIFICANT ONE? HOW MUCH IT HAS INFLUENCED THE GLOBAL GOVERNANCE SYSTEM?** The most important one is the USA, as it has control and influence over the different institutions, apart from being an hegemonic power economically, socially and politically speaking. Due to its decisions, we live in a world where mostly everything has an American background. Basically, governance is the USA. The way in which the USA plays in the global order will determine our lives and it will lead to a better or worse way of living, relating and trading among the same country and with the rest of the world. **WHAT IS THE MAIN CHALLENGER TO THE HEGEMONIC PLAYER? WHERE IS THE CONFRONTATION?** The main challenger is China, as it poses a threat to USA´s hegemonic power. The confrontation relies mainly in technology, as it´s an important and growing field nowadays. Apart from the economic part, since the world uses dollars in transactions, making its economy grow. That´s why China is especially focusing on this last one (apart from the other one), because it´s trying to control and be hegemonic when talking specifically about the economy and the use of currency (trade). China wants to be the largest economy in the world (more responsibility and more power). In economic terms it can be possible, though in a social way is more difficult that China overcomes the US. \*In the future, India could be a challenger in population, democracy and economy. **WHAT IS THE ECONOMIC AND FINANCIAL SYSTEM THAT´S BEEN USED IN THE GLOBAL ECONOMIC ARCHITECTURE?** CAPITALISM based on liberalism and neoliberalism, which evolves and changes according to the situation. Some countries want to change the governance rules, though the USA doesn´t want to. \*It varies according to the degree of intervention of the State. **WHAT ARE THE VALUES AND LIMITS OF THAT SYSTEM?** The main principles are free markets, democracy, limited government intervention (security and private property) and markets adjust themselves with prices (supply and demand), always with competition. However, as the States are intervening with certain regulations (taxes), they limit the possibility of opening more markets protectionist measures. Also, another limit is inequality around the world, since there are countries which are abler to apply those liberal ideas than others. **WHAT IS THE IMPACT OF THE USA´S VALUES AND INTERESTS IN THE GLOBAL ECONOMIC ARCHITECTURE?** We live in a world designed and controlled by the USA (rules and institutions based on neoliberal capitalism). Therefore, its values and interests will have an important impact on the global economic architecture because it determines the rules of the game (governance) that affect everyone. This country has determined and forced, through their different institutions, economies to open their markets and to trade using the US dollar (international trade is in their nature). \*In foreign policy they may do something completely different to their values (based on economic interests) **WHO HAS BEEN THE MOST INFLUENTIAL COUNTRY IN SHAPING THAT MODEL? AND WHY?** The USA, referencing capitalism, as it´s the hegemonic power that controls all the institutions (created after Bretton Woods) in the global economic architecture. Thus it promotes the liberal ideas of free markets and democracy through institutions and through the different laws. These values mainly benefit the US´s economy. \*China created its own bank, promoting BRI for infrastructure investment and loans in Ywangs. If its ideas become more influential regarding currency, automatically it will become an hegemonic power since business is done with their currency control of the market. **INSTITUTIONS IN THE INTERNATIONAL ARCHITECTURE THAT REINFORCE THE GLOBAL ECONOMIC MODEL** - [IMF:] bank of last resort, lending money and devaluating that currency. It establishes the value of the currency according to the reputation of that country and to the relations it has with the USA, influencing how trade is done. - [WTO:] regulates trade - [WB:] lends money for development Small economies, by opening markets, have more problems than benefits the liberal model benefits the rich. STRUCTURAL ADJUSTMENTS: apply liberal ideas and become members of the capitalist system. - Open up trade - Reduce taxes - Reduce social costs - Privatize state companies \*Some countries that don´t follow them are doing better than the ones applying them. **WHAT IS THE IMPACT OF VALUES OF THE CHINESE MODEL IN THE GLOBAL ECONOMIC ARCHITECTURE?** Economically, China is a capitalist system. It has a strong government intervention (communism), deciding economic policies and economic factors overall. That´s a problem because they don´t have a democracy to provide certitude, a legal framework and the rule of law. Thus governments won´t need to act respecting the different actors involved. **WHAT IS THE IMPACT OF THE VALUES OF INDIA IN THE GLOBAL ECONOMIC ARCHITECTURE?** India is a major actor of the global economic growth, with its fast-growing GDP. It´s a leader in IT services and a key player in outsourcing. As a member of the BRICS and other global alliances, India is shaping international trade policies and contributing to global economic stability. Technological development and largest market in the world, though they are mainly poor. It´s the most populated country and it´s growing very fast. Though its population have low income. **WHY HAVE THE SUBJECT CHOSEN THESE 3 MAJOR ECONOMIES?** Because they are the ones that have, or will have, an impact on the global economic architecture. Right now the USA is the most powerful nation that has governance in both economic and geopolitical aspects. Nevertheless, it´s been threatened by China´s increasing control of trade and by its opposition towards today´s institutions and values, trying to change them by introducing their own values and increasing its currency among trade. And India because of its growing markets, the technological development and by having a democratic approach. This makes it a very possible candidate to control the rules of the game in the long run. **WHY IS IT IMPORTANT TO UNDERSTAND THE HISTORY AND VALUES OF THE USA?** It´s important because that history and those values are the ones influencing the USA´s decisions and rules of the game they´re implementing all over the world. Therefore, we will understand how the world works and how countries and markets interact. Due to that, we have the capitalist model based on a liberal approach of free market, democracy and a limited intervention of the government. **HOW IMPORTANT IS THE USA IN MILITARY TERMS AND HOW THAT HAS AN IMPACT ON THE GLOBAL ECONOMY?** The USA has one of the most important and professional army in the world, which gives the necessary protection to the country against foreign attacks. It finances and invests a lot in military aspects improves the global economy. This gives you a lot of power if things go wrong, you use that power to do something different (turning it around) **HOW IMPORTANT IS THE USA IN TERMS OF INTERNATIONAL TRADE?** The USA is one of the main countries that trade all over the world, mainly because the international trade is being done in dollars, which makes it easier. It also controls the rules of international trade, though China is the biggest exporter. \*Supply chains are controlled by the USA. It´s also influential in trade policies and in the world´s market dynamics. **HOW IMPORTANT IS THE USA IN TERMS OF NATURAL RESOURCES?** The USA focuses on oil, gas, coal and minerals, contributing to the global economy by exporting them to other countries that need it since they are essential. This leads to an economic growth and an increase of the country´s strength. They don´t need to import them because they have them at a national level self-sufficient. 2014: introduction of [fracking] extract oil and gas from sand particles in order not to depend on Middle East countries (bad environmentally talking). \*China produces 26% of oil, though it is embarking on an energy transition (coal, electricity, renewable). That forces Europe to do the same as China is reducing gas and oil extraction. **HOW IMPORTANT IS THE USA IN TERMS OF TECHNOLOGY? WHO IS BEHIND IN TERMS OF THE MOST TECHNOLOGICAL DISRUPTIONS?** \*Technology is important to remain competitive and for war. In terms of technology, the USA is quite developed, since the conflict which China involves the technological field, among others. Therefore, this forces the USA to develop and increase even more their technology. Nowadays, China is developing more patents, competing with the USA in this aspect. \*Now the USA doesn´t want Chinese technology. India is innovating within the technological sector they are involved at an important level in many technological companies. **WHAT IS THE IMPACT/RELEVANCE OF THE USA IN THE GLOBAL ECONOMIC ORDER? CAN WE TALK ABOUT AN HEGEMONIC POWER?** \*The USA is a hegemonic power in the global economy since it has the influence and the control of the economy at a global level, and the control of the rules of the game through institutions. It also promotes liberal values of democracy and free markets. \*The US dollar is the most used currency in the world when doing trade internationally. This forces other countries to use it as well, increasing its value global trade mostly in US dollars. \*It also established different institutions to promote their ideas, which lets the country impose rules and sanctions to the rest of the world (always benefiting the USA). \*Apart from its technology and innovations in it and other relevant fields (military force) which makes the USA gain more relevance in the global economic order. It´s the greater military power (stronger navy and air force, as it invests a lot of money in military), controlling oceans. \*The USA is strong in world agreements: - Military and economic alliances (European countries are their main allies) - Soft power: you don´t need just money and weapons, but other social and educational aspects to control the world (language) \*Largest global economy, second largest exporter and first largest importer. What happens to the USA affects the rest of the world. \*Biggest multinational corporations around the world (Walmart if it goes into bankruptcy, the economy will fall considerably) \*India has limited influence it´s innovating in technology, but it won´t make an important difference in the future. Its values come from the British, which are quite similar to American ones. **FROM 1 TO 5, HOW IMPORTANT IN THE US IN NATIONAL RESOURCES? AND WHICH ONES** It has many natural resources which leads the country to be almost self-sufficient. Oil and gas (energy in general) through fracking Corn and water (fresh water reserves) \*However, regarding mineral resources, it´s not self-sufficient because it depends in other countries such as China. \*Energy transition is not a priority they have a lot of oil and gas. **WHAT ARE THE INSTRUMENTS THE USA USES TO EXERCISE INFLUENCE IN THE ECONOMIC WORLD?** Institutions that promote USA´s liberal and neoliberal economic ideas of democracy and free trade. UN peace and prosperity WTO trade rules WB lends money to develop infrastructure IMF currency (US dollar) \*Private institutions very influential Federal Reserve is the central bank of the US and determines monetary policy. It also exerts influence in global economic power with the dollar currency, trade agreements (strategic trade pacts and economic partnerships), sanctions and regulations to pressure, and innovation and investment (global technologies advancements and economic trends through innovation, venture capital and foreign investment). **HOW STRONG IS THE USA ON TECHNOLOGY? AND WHAT´S THEIR BIGGEST CHALLENGE?** USA´s development in technology is very strong and it´s increasing and becoming better. Their biggest challenge is regarding the production of microchips in comparison to other countries such as China or Taiwan. It has to innovate and invest money in this sectors. \*Technological companies are the most important ones in the USA. **HOW IMPORTANT IS THE USA´S TRADE? AND HOW DIVERSIFIED IT IS?** Really important since world trade is done with its currency (US dollar). It trades with differentiated continents across the world (many important countries that depend on the US) trade is very diversified in that aspect. They export a lot, but highly dependent on China (logistics). It´s losing importance regarding the control of maritime routes, where trade is mainly done. **WHAT ARE THE 3 MOST IMPORTANT USA´S ECONOMIC PARTNERS?** 1. EU (trades on bilateral agreements). They don´t trade as a bloc. In terms of trade, Europe is not a bloc (it just trades mainly with some countries like Germany, the UK, France) 2. Mexico 3. Canada 4. China **HOW IMPORTANT IS THE USA´S DOLLAR IN COMMERCIAL AND FINANCIAL TRANSACTIONS? WHAT ARE THE 2 MOST IMPORTANT WAYS TO DETERMINE THE VALUE OF A CURRENCY?** The US dollar is very important since it´s used in most of the world´s transactions, increasing therefore its value. \*The value of a currency can be determined according to the relationship between that country and the IMF (USA). \*Value of China´s currency is increasing \*Value of EU´s currency 19%, though it´s just used within Europe. \*Esterline pound 2-3% (120 years ago represented 70% of world´s trade) \*58% of transactions are done in dollars. \*Japanese yen is important because USA´s investors are investing on them (safe currency because it´s protected by the USA). **FACULTIES OF THE US PRESIDENT?** - Balance of power (not that much the president, but the states) - Trade within the country and with others - War (authorization of US Congress) - Foreign policy trade barriers, tariffs **WHAT IS THE IMPACT OF THE PRESIDENT TRUMP´S ELECTION IN THE WHITE HOUSE?** There would be significant changes regarding US policies: - Regarding immigration, climate change and international trade. \*He doesn´t take climate change into account - He is also reducing the budget regarding public health, which will cause a lot of Americans to struggle with their insurances - He is willing to strengthen the military power (commander-in-chief of the army) **WHAT ARE THE CONSEQUENCES OF TRUMP´S POLICIES ON THE US ECONOMY?** He wants to reduce taxes for corporations and high-income earners (increase consumer spending) and he is going to increase tariffs to other countries to promote their self-sufficiency. 60% towards China and those countries who don´t use the dollar 10%-20% to the rest of the countries He´s reducing government spending quality of services will worsen, which will affect mainly low-income people. \*Tech, energy and crypto currency companies will reap many benefits. **WHAT ARE THE CONSEQUENCES OF HIS POLICIES ON INTERNATIONAL TRADE?** As Trump wants an economic policy based on protectionism, international trade would decrease regarding mainly its imports. This would affect those countries which trade a lot with the USA, since they would have problems selling to the USA, applying those same measures to the USA. American products won´t be that demanded because countries will apply the same strategy raising their tariffs on the US. That can lead to a deglobalization period, having a global effect on the world´s economy. **WHAT ARE THE CONSEQUENCES OF TRUMP´S ELECTION ON US POLICIES ON THE MIDDLE EAST AND UKRAINE?** Every decision of the US foreign policy is made taking into account their economic interests. The US is an important player in both wars since it supplies Israel and Ukraine with arms and materials, making a lot of money from it. Therefore, the US won´t be interested in stopping those wars. Trump wants to demonstrate that he has the power over the leaders of the international arena. \*Ukraine war has been very expensive for the US, and Trump has had personal confrontations with Zelenski. \*Regarding the Middle East, he will continue supporting the war due to economic interests. **WHAT COULD BE THE CONSEQUENCES OF TRUMP´S ELECTION/PROPOSE POLICIES ON THE US-CHINA ECONOMIC AND GEOPOLITCAL RELATIONSHIP?** Regarding the increased tariffs proposed by Trump, China could do the same to the US. - Increased prices for US customers and businesses depending on Chinese imports - Disruption of global supply chains - Difficulties for the US to import rare earths and technology from China essential for their activities \*US military presence in the Indo-Pacific could increase the risk of confrontations with China. **WHAT IS PRESIDENT TRUMP´S POLICY TOWARDS NATO AND WHICH IS THE UNDERLINE REASON?** Trump has always criticized NATO members for not meeting the military spending target of 2% of a country´s GDP. That´s why he has been pressuring European countries to do so. If not, he´s saying that the US is going to reduce its support. He considers this to be unjust, since the US is the one spending more than the Europeans. That way, each country would strengthen their armies and could answer to threats without depending wholly on the USA.