This chapter examines how the European Payments Union resolved the problem of currency convertibility and unlocked the potential of trade liberalization, thereby paving the way for the European Economic Community (EEC), which in turn spurred further intra-European trade. It first provides an overview of trade and payments before and immediately after World War II and goes on to discuss postwar approaches to convertibility and liberalization. It then considers the degree, speed, and commitment with which countries opened up their domestic markets to each other's exports under the Trade Liberalization Programme. It concludes with an assessment of Britain's efforts to join a wider free trade area with the members of the Organization for European Economic Cooperation.
Wendy Asbeek Brusse
This chapter explores the complex and multifaceted relationship between international trade and environmental protection. The global trade regime's normative principles, legal rules, and real-world consequences often contradict environmental governance. For example, there is tension between trade and environmental governance with respect to the commercialisation of endangered species, export of hazardous wastes, emissions involved in transporting goods, and patentability of living organisms. However, there are also synergies, which enable trade liberalisation and environmental protection to reinforce one another. For example, trade forces were key drivers in the reduction of ozone-depleting substances and the affordability of pollution abatement technologies. The chapter explores these conflicts and synergies by first discussing the literature that examines the positive and negative impacts that trade has on the environment. It goes on to look at the trade dimensions of various environmental regimes, and then environmental dimensions of the trade regime, within both the World Trade Organization and preferential trade agreements.
Federico M. Rossi and Donatella della Porta
This chapter explores the relationship between social movements, trade unions, and transnational advocacy networks of resistance to non-democratic regimes in the global wave of democratization. It considers views from social movement studies within the democratization literature as well as views of democratization within the social movement literature. It also examines the diverse roles played by movements, depending on the type of democratization process and the stage in which mobilizations emerge (resistance, liberalization, transition to procedural democracy, consolidation, expansion). The chapter identifies a host of factors that produce the most favourable setting for democratization, including a non-syndical strike wave and/or a pro-democracy cycle of protest; increased political organization in urban areas, and a relatively dense resistance network; and the existence of pro-democratic elites able to integrate the demands for democracy coming from below (at least until transition is well initiated).
This chapter examines development policy objectives and their explicit focus on poverty reduction. It first considers different definitions of development policy objectives before discussing the roles that the market mechanism and the state should play in allocating society’s productive resources. In particular, it looks at the economic role of the state as one of the central issues dividing opinion on development strategy and explains how rising inequality led to a backlash against economic liberalization. The chapter proceeds by exploring the relationship between economic growth and poverty reduction, along with the political difficulties that arise from economic reform. It also analyses the importance of transforming the structure of economies and the new global development landscape, including changes in development finance.
This chapter assesses regional trade agreements (RTAs). The number of RTAs has grown rapidly since the World Trade Organization (WTO) came into existence in 1995. Roughly one-half of world trade is now conducted within these preferential trade arrangements, the most significant exception to the WTO's principle of non-discrimination. Governments have entered regional economic agreements motivated by a variety of political and economic considerations. They may prefer trade liberalization on a regional rather than a global basis for several reasons. The chapter then reviews the political economy of regionalism: why RTAs are established; which actors are likely to support regional rather than global trade liberalization; the effects that regionalism has had on the trade and welfare of members and non-members; and the relationship between liberalization at the regional and global levels.
Sophie Meunier and Kalypso Nicolaïdis
This chapter examines the determinants of the European Union's trade power as well as the contribution of trade policy to the power of Europe in the international system. It first considers how the EU acquired and expanded competence to represent the member states in trade policy, from the Common Commercial Policy in the Treaty of Rome to trade policy after the Treaty of Lisbon. It then provides an overview of the EU trade policymaking process before discussing the exercise of the EU's trade power. In particular, it explores the European single market and world trade liberalization, settlement of disputes in the World Trade Organization, and the EU's retreat from multilateralism. The chapter also looks at preferential trade agreements, along with bilateral and regional agreements, and concludes with an analysis of how the EU is resolving the tensions inherent to being a world power in trade and through trade.
The Politics of Competence Expansion
This chapter examines the European Union’s competition policy. It shows that the EU’s legal powers in general competition policy—over restrictive practices, abuse of a dominant position, mergers, state aid, and state monopolies—are very extensive and highly supranational with few direct controls for national governments. The chapter then studies two views of the application of these powers—that they have been used in a more ‘neo-liberal’ manner in recent decades or that they continue to provide scope for industrial policies of supporting European champion firms. It underlines that the Commission has been an active and central player in policy-making, together with the European Court. But all actors operate in a wider context of large powerful firms as well as experts and practitioners in competition policy. The chapter concludes by analysing how the economic crisis after 2008 has reignited debates about altering the criteria for policy to give more place to aims other than protecting competition, to offer more space to national policy-makers, and to provide greater scrutiny and accountability for the Commission, as well as greater action to deal with the new ‘digital tech giants’, but that these encounter significant obstacles.
Erin Hannah and James Scott
This chapter assesses the global trade system. It begins by looking at the debate over free trade and protectionism. The chapter explores the evolution of the multilateral trade system, with particular emphasis on the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO), highlighting the centrality of trade liberalization and non-discrimination in contemporary trade relations. It then considers the debates surrounding the relationship between trade and development, particularly around how multilateral trade rules reflect unequal power relations, and the social consequences of liberalized trade. The chapter also reflects on the recent backlash against neoliberal trade and the ostensible turn towards protectionism in some parts of the world. Finally, it highlights the gendered nature of trade and how it affects gender equality.