Growth of Free Trade in the World

Free Trade and Economic Globalization• The increase in free trade is directly responsible for the spread of

economic globalization.

• Free trade is trade that is not restricted in any way by government regulation.-No quotas,-no tariffs,-no restrictions of any kind.

• What is a tariff?

• Why do governments put tariffs on imports?

Have we always had Free Trade?• During the Great Depression, Old Core countries RAISED trade

barriers. Why do you think they did this?

• In the 1940s, it became obvious that free trade was the way the world’s economy would grow.

• In 1944, 44 Allied nations met in Bretton Woods,New Hampshire to discuss economic issues. The end of themeeting saw the International Monetary Fund and the World Bank be created. It also led to the GATT, or General Agreement on Tariffs and Trade.

• GATT became the World Trade Organization (WTO).

Free Trade• The WTO is responsible for coordinating and regulating worldwide

trade.

• It has court systems, the power to issue orders and fines, etc.

• It gets together regularly to set goals and targets, and establish plans on how to get there.

• These meetings are called rounds and they are named after the place that the meetings are held, OR, named after important people that plan them.

• It has become even more important since the end of the 1980s.

Free Trade Growth• Since the 1990s, free trade has expanded a lot.

• Allows for freer spread of wealth between countries. Economies all over the world grow because of it.

• Opponents of free trade fear the loss of sovereignty for countries. Culture can be lost, labour standards, social programs can be impacted.

Canadian Free Trade Growth• In 1988, Canada signed the FTA with the United States.

• We included a provision that allows us to regulate cultural items like television shows, magazines, and music.

• In 1994, the FTA became NAFTA when the deal was expanded to bring in Mexico.

• Nowadays, Mexico is becoming the recipient of a lot more benefits than Canada.