2. Agenda Questions?Review Test 1, October 6 Test 1, October 6 Interdependent Global Economy Interdependent Global Economy Canada’s trade structure Pacific Rim World system theory Dependency Terms of Trade Multinational Enterprise

3. Test 1 will be based on the following sources: Wheeler et al. Chaps 1-4 Wheeler et al. Chaps 1-4 Lectures up to Monday, October 4 Lectures up to Monday, October 4 Scan the introduction to NAICS Scan the introduction to NAICS Californian Perspective on Regional Economic Development Policy in Canada Californian Perspective on Regional Economic Development Policy in Canada Scan the CAMI site Scan the CAMI site Look over the WTO pages on the Seattle and Doha Ministerials, paying special attention to “Criticism, yes…misinformation, no!” Look over the WTO pages on the Seattle and Doha Ministerials, paying special attention to “Criticism, yes…misinformation, no!”

4. Trade as a Measure of Global Interdependence International trade: one measure International trade: one measure Merchandise trade Merchandise trade Trade in services Trade in services Deeper integration Deeper integration Foreign direct investment Foreign direct investment Strategic alliances Strategic alliances Finance Finance Supranationalism Supranationalism

5. Canada’s International Trade Balance, 2001 ($ 000,000) Source: Statistics Canada 2003, Cansim II Table 228

6. Pacific Rim US “is functioning in the traditional role of a Third World country” with Pacific rim (p. 61) US “is functioning in the traditional role of a Third World country” with Pacific rim (p. 61) Large US deficit with Japan NICs, 4 little tigers… NICs, 4 little tigers… One big lion One big lion

8. Canada’s Trade with China China is now Canada’s second largest import source, ahead of Japan and UK, 5.5% of total Cdn imports In the US, China is the second largest import source at 12% of total imports! Source Statistics Canada Infomat, April 7, 2004

9. World-system Theory Immanuel Wallerstein Immanuel Wallerstein Core CoreSemi-Periphery Periphery Periphery Hierarchy of dominance (hegemony) and Hierarchy of dominance (hegemony) and Dependence (subordination) Dependence (subordination) Wallerstein’s 4 epochs Wallerstein’s 4 epochs

10. Dependency Theory Dependenistas of Latin America (1960s) Dependenistas of Latin America (1960s) underdevelopment as active process, underdevelopment as active process, preventing the development of the periphery preventing the development of the periphery Net economic flows from periphery to core Net economic flows from periphery to core e.g. brain drain is a “reverse transfer of technology” exceeding value of forward transfers of technology with foreign investment e.g. repatriated profits exceed capital investments Foreign aid payments are relatively small

11. Deteriorating Terms of Trade Is trade mutually beneficial? Is trade mutually beneficial? GATT WTO in 1995 GATT WTO in 1995 Traditionally, the periphery exports resource products to pay for manufactures Traditionally, the periphery exports resource products to pay for manufactures But commodity prices have declined relative to manufactures But commodity prices have declined relative to manufactures Engel’s Law: As incomes rise, proportion of income spent on food declines Tech. change in core economies reduces their consumption of many resource products

12. Battle in Seattle Seattle Ministerial Conference in 1999 WTO has few friends: A threat to US trade sovereignty A threat to US trade sovereignty A threat to periphery because WTO controlled by the wealthy core nations A threat to periphery because WTO controlled by the wealthy core nations A threat to all peoples because WTO is undemocratic tool of MNCs A threat to all peoples because WTO is undemocratic tool of MNCs Does this come as a surprise? Does this come as a surprise? Intergovernmental organization representing 140 states Intergovernmental organization representing 140 states Doha Round – a “do-over” announced 2001 at a “Ministerial Conference” in Qatar