Baylis,, Smith and

d Owens: T
The Globa
alization of World Pol itics 6e
Re
evision guiide
Chapter 27: Glob
bal trade and
a global finance

There are mo
ore flows of
o trade and
d finance around
a
the world ecoonomy toda
ay than at
anyy previous time, but care
c
shoulld be taken
n about the
e precise ssense in wh
hich such
flow
ws are labelled as global.

The increase
e in world trade since
e 1970 is dramatic, although it m
might be th
hat the
pro
ocess of re
egional eco
onomic inte
egration ac
ccounts forr those chaanges more readily
tha
an the proccess of gen
nuine globa
al economic integratiion.

Tra
ading on fin
nancial ma
arkets onlyy very rarely involves money phhysically ch
hanging
hands, so tha
at the cons
sequencess of such trrading are much moree likely to have
h
a
genuinely glo
obal reach than its pa
attern.

The move to disband th

he GATT in
n favour off the law-m
making WTO
O system was an
atte
empt to cre
eate more straightforrward nego
otiations fo
or global freee trade.

De
eveloping countries
c
decisions
d
a
about whetther to bec
come mem bers of the
e WTO
are
e often hea
avily influen
nced by th e political pressures that are pllaced upon
n them to
demonstrate their comm
mitment to the existin
ng world ec
conomic orrder.

Wh
hen they act in conce
ert, the US and the EU
E are almo
ost alwayss able to ge
et their
inte
erests imprinted into WTO law,, even if majority opin
nion amonggst WTO members
m
is a
against the
em.

There is mucch more m

money in th
he world to
oday than goods
g
to sppend it on, with the
dollar value of
o total dom
mestic fina ncial assetts around five
f
times hhigher than
n world
GD
DP.

Un
nder the Brretton Woo
ods system
m of the imm
mediate po
ost-Secondd World Wa
ar era,
fina
ance was stripped
s
off its global activities and
a genera
ally boxed in by political
deccree so tha
at it would serve the interests of
o stable global trade relations.

Oxford Universityy Press, 2014.

Baylis,, Smith and

d Owens: T
The Globa
alization of World Pol itics 6e
Re
evision guiide

The regulatory system monitored by the IMF is now often vieweed as being
g a crucial
ing
gredient of a broader political sttructure of finance wh
hich favou rs a globall elite.

Oxford Universityy Press, 2014.