Political Economies of Regionalism

AFTA (ASEAN free trade area)

AFTA was another attempt at real integration in ASEAN with the plan to increase ASEAN's competitive edge in production through elimination of tarrifs and non-tariff barriers and to increase FDI in ASEAN. It was signed in 92. Unfortunately, it ran up into the Asian Financial Crisis of 97 and 98, where states were looking to be more protectionist.

ASEAN +3

ASEAN +3 is ASEAN plus Japan, Korea and China. Japan had long attended ASEM meetings. ASEAN decided to invite China and South Korea to send reps. In the midst of Asian economic crisis, leaders meetings began with ASEAN plus three. First discussion was over a proposed Asian Monetary Fund. Killed by U.S. opposition. But led eventually, through this forum, to Chiang Mai Initiative in which states could engage in bilateral currency swaps.

Border Industrialization Program

Also known as the Maquiladora Program. A manufacturing operation in a free trade zone, where factories import material and equipment on a duty-free and tariff-free basis for assembly, processing, or manufacturing and then export the assembled, processed and/or manufactured products, sometimes back to the raw materials' country of origin. The program was initiated by the Mexican government in order to reduce unemployment in US border areas.

Multilateralism

An approach to action or negotiations in which more than two nations participate. This currently is the predominant method for negotiations. Multilateral negotiations form the backbone of any regional trade agreement.

Balance of Payments Crisis

An economic crisis for a government, where its expenditures exceed its income. It is a currency crisis, where the local currency devalues and foreign investment flees the country due to unstable economic conditions. BOP crises usually occur in state-run economies, such as Mexico's in the 1980s and early 90s. The Mexican BOP crisis caused the country was a major factor in the country's decision to liberalize its markets, and ultimately help lead it to joining NAFTA.

APEC

Asia-Pacific Economic Cooperation. 21 Pacific Rim member economies. Established in 1989 in response to growing interdependence of Asia-Pacific economies. The US wasn't interested at the time, but then Clinton decided to try and invigorate it. Wanted to send a message to Europe - if you close your markets too much to American goods, you might find yourself on the outs of East Asia and the US. Three pillars: trade and investment liberalization, business facilitation, and economic and technical cooperation. Marked with few achievements because it is full of conflicting ambitions and operated by consensus.

Advisory Committee for trade policy and negotiations

Avery Reading. ACTPN. Top layer/most senior panel of the support infrastructure for NAFTA in the US. Composed of 44 members, mostly business leaders, who represented all of America's major economic sectors. They all made up a prviate sector advisory system that was at the top of the pyramid of lobbying activity for NAFTA's passage. The lower levels of the pyramid were (second level) 7 committees that provided sector-specific advice from industry, labor, agriculture, etc. and (third level) numerous technical and sectoral advisory committees that assessed teh impact of trade policy on specific sectors. Overall, the USTR did not need to follow ACTPN recommendations, but had to inform the committees of any "significant departures" from their stance. Altogether, the advisory system submitted 37 reports on NAFTA. The ACTPN's report was strongly pro-NAFTA (only labor representatives dissented).

Agricultural Policy advisory committee

Avery Reading. APAC was one of the sector-specific advisory committees with the president's private sector advisory system. It reflected the massive amount of diversity within American agriculture interests during NAFTA negotiations. APAC was a forum where farm groups could express their views of the development of agriculture issues during the NAFTA negotiations. While the group was somewhat fragmented on all issues due to the fragmented nature of American agricultural interests, it did provide a significant base of support for the agreement. Overall, the group recognized that its objective of increasing export growth opportunities could not be met for every commodity (reflecting its understanding that all trade agreements have winners and losers). Its stance on NAFTA was therefore that "it provides long term net export growth opportunities for US agriculture and is in the economic interest of the United States." Particularly supportive was the grain industry.

Charles De Gaulle

Charles De Gaulle is founder and first president of the fifth Republican constitution of France. His opposition to Supranationalism and to the United States caused crises in the European Community and impacted upon the integration process. For ten years, the entire European Community and its future were based upon one man and one man's ideas--the Fouchet. The plan intends to amend the Treaty of Rome, reduce the power of the Commission and pass authority to the National Parliamentarians. De Gaulle also sharpened his proposals aiming to weaken the Ministerial Council, putting an end to the supremacy of the EC Law and at the same time suggested revising any arrangements concerning European Defence in order to sideline the UK and USA. His hostility towards Supranationalism became most obvious in 1965, with what became the Empty Chair Crisis. The Luxembourg Compromise, in 1966 finally resolved this crisis. It was an agreement to disagree over majority voting whilst maintaining the principle of majority voting"

Foreign Direct Investment

Direct investment by a company or country into the economy of another country. That is, a private firm or a government of one country can create businesses or create production networks, directly in another country, while still retaining direct control over the investment. Two instances of FDI were seen with Mexico's Maquiladoras and Japanese Production Networks; the former had foreign (usually US) factories set up along the US-Mexican border and the latter had Japanese subsidiary companies placed throughout East Asian states.

EVSL

Early Voluntary Sectoral Liberalization, A failed 1997 program to further trade liberalization as part of APEC. The program was intended to liberalize trade in 15 industries. EVSL faced heavy opposition from Japan, South Korea and China and was eventually abandoned.

EAEC

East Asia Economic Caucus, regional FTA proposed by Malaysian PM Mahathir bin Mohamad in 1990. Region to include ASEAN countries, Japan, Korea, and China, and differ from APEC by excluding Oceana and the US. Japan refused because of exclusion of Western countries, highlighting the US's thumb on Japan and interest in the Asian Pacific region.

Council of Ministers (Council of the European Union

Enacts legislation binding throughout EU territory and directs intergovernmental cooperation. The Council is composed of ministers representing the national governments of the 28 member states. Different ministers attend Council meetings depending on the agenda. Most decisions are made by qualified majority voting, but some decisions (for instance on foreign policy in the framework of the CFSP, taxation, and environmental issues) still require unanimity. The Presidency of the Council (not equal to President of the European Council) rotates among the member states every six months. It is the Union's legislative body, coordinates the broad economic policies of the member states, concludes, on behalf of the EU, international agreements with one or more States or international organizations, shares budgetary authority with Parliament, takes the decisions necessary for framing and implementing the common foreign and security policy, on the basis of general guidelines established by the European Council, coordinates the activities of member states and adopts measures in the field of police and judicial cooperation in criminal matters

Authentic Labor Front

FAT is an independent confederate of labor unions in Mexico which was formed in 1960. FAT was against neoliberal reforms. FAT fought against Salinas and his reorganization of the PRI and the exclusion of unions from the NAFTA negotiations. FAT participated in the transnational labor movement post NAFTA's implementation, partnering with labor groups in the U.S. and Canada to protect workers' rights.

Maquiladora

Factories, usually geared towards milling or processing. Originally, the program allowed a foreign company (usually US-based) to invest a certain amount of capital without needing any special authorization from the Mexican government, allowed special customs treatment with respect to duties and tariffs, and acted as special economic zones without needing a local partner. These factories originally existed almost entirely along the US-Mex border. Maquiladora were key components in the production process; raw materials were shipped to plants, assembled, and then transferred back to the US.

Subsidiary

First upheld in the Maastricht Treaty (1992), subsidiarity is an important principle signifying that decisions in the EU should be made at the closest practical level to the citizen. This concept is significant because there was a prevailing notion of a democratic deficit in the EU; people believed that Europe didn't really represent Europeans. Instead, there was a belief that power in Europe was either in the hands of eurocrats in Brussels or delegated to the Council of Ministers. Thus, this principle was upheld in an attempt to deal with this so-called democratic deficit.

Mahathir bin Mohamad

Former Prime Minister of Malaysia who's government initiated rapid modernization and economic growth starting in the 1980's. Brainchild of EAEC and Vision 2020. Supported regional projects antagonistic to US interest, held "Asia for Asians" view, excluding Oceana as well.

Four Motors Sub-region

Four economically strong and highly industrialized regions in Europe, each with a major city: Catalonia (Spain) - home to Barcelona, Rhône-Alpes (France) - home to Lyon, Baden-Württemberg (Germany) - home to Stuttgart, and Lombardy (Italy) - home to Milan. These four regions have created a business grouping to get together and promote market integration.

Two-level games

In this model, states must engage in two simultaneous levels of negotiation when negotiating with other states. One level is intra-national (ie, governments with domestic interest groups), and the other international (ie, with the governments of other states)

Liberal theory of IPE

Internal national interests will be the determinant factor in regionalism. Business, labor and other interest groups will control the process. Liberals will look to farmers and auto manufacturers in Europe, business interests in NAFTA and Asia.

Asian Monetary Fund

Japanese authorities proposed an Asian Monetary Fund at the height of the 1997 Asian Financial Crisis. Aimed to serve as a regional version of the IMF. The proposal encountered strong resistance from the US because the IMF is controlled by the US. The US prefers an IMF centered approach through which it could impact policies much more effectively in line with its own preferences. When this fell through, the countries of ASEAN met to discuss bilateral currency swap agreements - the Chiang Mai Initiative.

Macroeconomic Stability

Macroeconomic stabilization is a concept seen mostly in the NAFTA case study with Mexico in reference to small businesses in favor of trade liberalization. According to Pastor and Wise, small firms should have been opposed to trade liberalization due to lack of capital, but in reality they were for trade liberalization with the belief that it would better the macroeconomic conditions in Mexico which would generate a trickle-down effect and eventually benefit them.

MERCASUR

Mercosur was established in 1991 as a Southern Cone Liberal Market. It's members: Argentina, Brazil, Uraguy, Paraguay, and (newly) Venezula view it as an alternative to FTAA. Mercosur is a weak customs union with the goal of becoming a common market (excluding the sugar and automobile industries) however it has failed to meet its own deadlines. Mercosur is an example of defensive regionalism and author Carranza suggests that it is a way to shield itself from the US and can be called a counter hegemonic project. "

PRI

Mexican political party with leftist roots that governed Mexico continuously from 1929-2001. It became very corrupt,accused of new alliances with big business and "retail politics". Over time it has become a more centerist party. Returned to power in 2012.

Non-Tarrif Barrier

NTBs are any barrier to trade other that tariffs that will create an economic loss, as it does not allow markets to function properly. One of the most common NTBs are aggressive customs inspections, an example of this is Japanese treatment of US apples claiming so called maggots. The Single European Act eliminated NTBs in Europe.

US-Canda FTA

Negotiated in 1987 and signed on January 2nd, 1988, the Canada-US FTA was meant to liberalize trade between the two countries by striking down trade restrictions over ten years. It also established a resolution scheme for inernational disagreements. Seen as mostly successful, exports from Canada increased significantly though some believe the FTA led to a recession in Ontario's manufacturing sector. Possibly the FTA's most significant contribution was serving as the precursor for NAFTA. Mexico felt pressure after the FTA's passage, causing it to push for inclusion (Gruber opinion). With NAFTA's passage, the Canada-US FTA was defunct.

Official Development Assistance

ODA is direct investment by a government in the infrastructure of another nation. For our purposes this is the assistance provided by the Japanese government to mainland Asia. This support served the dual purpose of improving Japanese corporation's access to mainland Asia and providing an incentive for mainland countries to cooperate with the wishes of Japanese firms.

Asymmetry of information

Occurs when a certain subgroup of businesses is less informed of economic policy while another group is favored and more aware of potential legislative changes. Argued to have been experienced by large, export oriented firms with respect to the Mexican government. During the enactment and creation of NAFTA, the Mexican government favored MNCs that were to benefit from regionalism, and the PRI/Salinas offered more information regarding negotiations/policy to them while excluding domestic-oriented firms from conversation

Euro

Official currency of 18 of the 28 EU member states (Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain). By adopting the EU, states relinquish their ability to manage their economy using monetary policy. Eliminates transaction costs due to differing exchange rates.

Treaty of Lisben

Passed in 2007, essentially renewed the Treaties of Maastricht and Rome, continuing the EU. However, there were some notable changes. Most importantly was the shift to a more centralized infrastructure with the creation of the President of the European Council, giving more power to the European Parliament, and making the EU's Charter of Fundamental Rights (EU's Bill of Rights) legally binding, thus taking power from the states, and giving it to the supranational EU. The Treaty signified a concerted shift to supranationalism from its more state-based predacessors.

CANACINTRA

Pastor and Wise reading. acronym: National Chamber of Manufacturing Industry. Autonomous, non-profit lobbying group in Mexico formed in 1941. Represented 60,000 small and medium-sized Mexico City industrial firms. Composed of Mexican industrialists. Acts as a consultative body for the govt and aims to represent its members before the govt at the federal, state, and municipal level. It seeks to promote the actions of both the govt and other business orgs that can contribute to improving industrial activity. Its mission is to "influence the competitiveness of the industrial sector and integration of companies, sectors, and regions." In relation to NAFTA, CANACINTRA had joined with the nationalist intellectuals and majority of govt ministries to deter President Lopez Portillo from signing the earlier GATT protocols. Then, the debt crisis and the first wave of unilateral commercial opening occurred, and further, the lobby was weakened in the mid-1980s by the "economic ill fate of many of its members" leading to its failure to "head off the subsequent GATT victory in 1986. Significance: interest group analysis opens up the puzzle of why "the breadth of support for free trade now expressed by even those smaller businesses least likely to succeed in the face of increasing import competition" exists.

Realist theory of IPE

Power and powerful states drive the regionalism process. Regionalism will take on a form which benefits powerful states. Realists will look to the actions of Germany and France in Europe, the United States in NAFTA, and China, Japan, and the United States in Asia.

Margret Thatcher

Prime Minister of the UK from 1979 to 1990. Prominent Euro-skeptic. Largely opposed deeper EU integration, in particular, opposed CAP and the inclusion of a social charter. Demanded a rebate for UK monies lost due to CAP before she would sign into the EU.

European Coal and Steel Community

Proposed by French foreign minister Schuman and formally established by the Treaty of Paris (1951), the ECSC was the first international organization based on the principle of supranationalism, and it ultimately led the way to the founding of the EU. The ESCS' main goal was to prevent any future conflict between Germany and France by creating a common market for coal and steel among its member states (Germany, France, Italy and the Benelux countries) so they wouldn't compete with each other over the regions rich in natural resources, such as the Ruhr.

Maastricht Treaty

Proposed in 1992, and officially created the European Union, the concept of European citizenship, reinforces the powers of Parliament, as well as the use of a single currency among member states (the Euro). Marks a crucial milestone in European development because it established the European Monetary Union, futher solidifying the presence of supranationalism in the region

Europan Commission

Proposes policies and legislation; the commission is responsible for administration, and ensures that the provisions of the Treaties and the decisions of the institutions are properly implemented. It consists of 28 Commissioners, including the President (José Manuel Barroso), appointed by common agreement among the member states and approved as a body by the European Parliament. Commissioners hold specific responsibilities and act in the interest of the Union, independently of national governments. Staff of 25,000 in Brussels

Supranationalism

Refers to an institution having power over the state. Is the result of deepening in regional relations. The EU contains a high degree of supranationalism unlike NAFTA or any of the fairly weak institutions in Asia. Supranationalism is opposed by nationalists.

Robert Schuman and Jean Monnet

Schuman was a French statesman who can be regarded as one of the founders of the European Union. He was Prime Minister of France in 1947-48 before becoming Foreign Minister. His administration pushed for the development of the European Community and dreamed of a supranatural democracy (Schuman plan- values such as justice go beyond national governments in wake of WWII, community under common High Authority needed, led to ECSC). Monnet was a French diplomat who can also be considered a founding father of the EU. The Monnet plan (in 1945, prior to the the ECSC) included taking control of German coal producing areas and re-directing them towards enriching France, to permanently weaken Germany. This created some tension, and the architecture of the community is somewhat a result of this. In 1955 he founded the Action Committee that would architect what would eventually become the European Union.

Miguel de la Madrid

Served as president on Mexico from 1982 to 1988. Affiliated with the PRI. Came to the presidency during a time of economic problems - balance of payment deficits because of massive government spending. Introduced neoliberal economic reforms that encouraged foreign investment. Madrid reduced tariffs, joined GAT in 1986, and moved the country away from ISI to liberal policies.

Single European Act (SEA)

Single European Act was signed in 1986 (came into force in 1987) with the purpose of reforming the European institutions as set by the Treaty of Rome, in preparation for the establishment of the single market. This treaty came as a response to the Europessimism of the 1960s and 1970s, which had seen very little further integration among the EEC members. Its main objective was to move to "re-launch the European project" by moving the organization from a customs union to a common market by harmonizing industrial standards and other regulations impeding trade. It also included the Social Charter aiming to protect the health and safety of workers. It also established quantitative majority voting (QMV) for major economic issues (as opposed to Luxembourgh compromise that required unanimous vote). This new principle made it a lot harder for a single country to veto any decision. However, it excluded issues of foreign policy and security.

Political Cost Benefit Ratio

Sum of losses over gains. Emphasizes the distributional effects, those who loose scream loudest and create problems for politicians. An economist would ignore the losers but the real cost for a politicians could be greater and they would have to consider the losers.

Commission for Labor Cooperation

Supplemental agreement to NAFTA. Objectives are to improve working conditions and living standards, to promote a set of guiding labor principles and to encourage cooperation to promote innovation and rising levels of productivity and quality. However, in this commission, there was no language of enforcement and labor remained opposed. In the US, democratic members of Congress were able to point to Clinton's language and use this back home as they were campaigning to appeal to union members.

Targeted Side-payments

Targeted side payments were used in the United States to win over the marginally committed/uncommitted groups for NAFTA. These included labor and environmental groups which were given snapback protection and guarantees of addressing environmental issues, respectively. In addition, George HW Bush promised citrus growers, sugar producers, and tomato growers 15 years of transition period instead of 10. Automobile tariffs were promised to be cut over 10 years rather than 5. Bush also offered that a certain level (62.5%) of north american content be put into automobiles to prevent Japanese "screwdriver factories"

ASEAN

The Association of South East Asian Nations was established in 1967 as an anti-communist bloc that includes Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei (1984), Vietnam (1995), Laos (1997), Myanmar (1997), Cambodia (1999). Annual summit meetings meet in Jakarta, where the secretariat is at, and ASEAN works by consensus that carefully protects national sovereignty. Treaty of Amity and Cooperation in Southeast Asia, reached at first summit meeting in 1976, spells out "non-interference in internal affairs of members" as one of the founding principles of ASEAN.

CAFTA

The Central American Free Trade Area or CAFTA is a free trade agreement created in response to, and in opposition to pressure to extend NAFTA by the United States. It is a prime example of defensive regionalism.

Europan Court of Justice

The ECJ is the highest court in the EU, concerning EU law. It cannot settle national disputes within states, but can answer questions about EU law posed by the states (these questions usually arise through their interactions with each other) Any determinations of EU law made by the ECJ are binding to the member states, therefore states must abide by ECJ rulings on EU law, even if EU law contradicts their own national laws. Recently, many rulings by the ECJ could be interpreted as creating a binding, de facto "European Union Constitution" through its rulings.

European Fiscal Compact

The European Fiscal Compact is a treaty signed in March 2012, designed to replace the Stability and Growth Pact. It was signed by all the member states of the European Union, except for Croatia and the United Kingdom. The treaty requires all signatory states to have a balanced or surplus budget, as defined by the treaty. The treaty defines a balanced budget as having a deficit of 3% or less of the nation's GDP. Although the treaty exists outside the EU's legal framework, it is scheduled to be incorporated into it by 2018.

GATT/ WTO

The General Agreement on Tariffs and Trade (GATT) is a multilateral international trade agreement. The GATT was spearheaded by the US, who hoped to create a global trade regime. In 1995 the World Trade Organization (WTO) replaced and improved GATT. This international trade agreement has 159 members and each country has one vote. Article 24 has a loophole for RTAs. The WTO follows a most favored nation concept in which you treat every WTO country like it is the friendliest trading partner and has non-discrimination clause that is considered to be a victory of liberal economists.

NAALC

The North American Agreement on Labor Cooperation was a supplement of NAFTA. Brought to the negotiations table by Clinton, this venue was created to give nations a voice for their labor grievances and to protect workers. Though it is widely seen as a weak institution, its presence helps give legitimacy to NAFTA.

SEATO

The Southeast Asian Treaty Organization was formed in 1954 by eight states: the United States, the United Kingdom, Australia, New Zealand, Pakistan, the Philippines, Thailand, and France. This treaty was part of the Truman Doctrine, the U.S. government's effort to contain the spread of communism, in this case from China. It was intended to be the Asian counterpart of NATO. The organization was dissolved in 1977, after the end of the Vietnam War.

CAP Common Agricultural Policy

The agricultural policy of the European Union. It was introduced in 1962 but has undergone several changes since then. It currently supports farmers by providing a range of price guarantees, direct payments and other instruments, including quotas and tariffs on some imported produce. By setting this up on a pan-European basis, national governments can no longer provide separate direct support for their agricultural sectors, but instead administer funds distributed via the CAP.

Fast-Track authority (trade promotion authority

The authority given to the President, by Congress, to negotiate the terms of international treaties. The President is permitted to broker deals at the bargaining table, and once the deal is laid out, send it to Congress for an up or down vote; Congress is not permitted to alter the deal. This system increases the chances for successful negotiating, as the President knows exactly what can be offered or denied. Furthermore, the other parties involved do not have to worry about thinking that they may have worked out a deal with the President, and then seeing it altered by Congress. Whatever the terms of the treaty may be, once it is sent to Congress, it can only be approved or denied, not changed.

Prisoners Dilemma

The dynamic described by game theory in which two actors are presented with a choice to cooperate or try to cheat one another. Each party has an incentive to cheat, however overall welfare would be best served if both parties cooperate. Prisoner's dilemma is particularly relevant when looking at to some degree security concerns but mostly trade liberalization. In this case, protectionist policies represent cheating. Overall welfare would be best served by removing these protectionist policies, however individual nations are better off due to their own protectionist policies.

Brenton Woods System

The economic system prevalent from the end of WWII to 1971. Bretton Woods established the IMF and WTO. Bretton Woods was based around the U.S. Dollar which was fixed to the gold standard. The collapse of Bretton Woods and the establishment of floating exchange rates ushered in an era of significant trade liberalization.

China-ASEAN FTA

The most important of a series of FTAs that have been signed in this new millennium. Most of the other FTAs are bilateral. Reached in 2003. Designed to eliminate tariffs between China and earliest six ASEAN members in 2010 and between China and less developed four ASEAN members in 2015. Parties agreed in 2005 to an "early harvest" program proceeding with the liberalization of trade in certain goods.

democratic deficit

The state in which a nation is not reseptive to the will of the people. The democratic deficit was responsible for the actions of European nations who approved deepening of the European project by the Maastricht Treaty despite overwhelming public opposistion.

Mexamerica

The sub-region described by Morales including Northern Mexico and the Southwestern United States. This sub-region is characterized by a flow of United States capital moving to Northern Mexico and a flow of finished products and illegal labor flowing north.

Production Sharing

The supply model favored by Chinese Diaspora Firms which places production of inputs in the hands of small, typically Chinese owned, businesses. This system arose in response to, and helped to cause the fall of Japanese Keiretsu and the greater flying geese model. These production sharing networks have given the Chinese Diaspora.

consumer surplus

There is a consumer surplus when the consumer's willingness to pay is higher than the market price. The difference between the market price and the consumers willingness to pay is the consumer surplus, so long as the willingness to pay is higher than the market price. Higher consumer surplus is a potential factor towards increased regionalization/regionalism, where states want to open markets to increase consumer surplus and therefore increase welfare.

Charter on Fundamental Rights

This document enshrines certain political, social, and economic rights for European Union (EU) citizens and residents into EU law. It was drafted by the European Convention and solemnly proclaimed on 7 December 2000 by the European Parliament, the Council of Ministers and the European Commission. However, its legal status was uncertain and it did not have full legal effect until the entry into force of the Treaty of Lisbon on 1 December 2009. The Charter demonstrates how regionalism in Europe has gone beyond economic policies to include legislation on human rights.

National Treatment

This principle signifies that imported goods, once they have entered the market, should be treated the same as locally produced goods. In addition, foreign and domestic services, and foreign and local trademarks, copyrights, and patents need to be treated equally. This term is significant because it represents the disproportionate benefits of the powerful US, who was looking to make political gains, in NAFTA. The US demanded and got national treatment for US multinational corporations operating in Canada and Mexico. US multinationals, even though based in the US, had to be treated like Mexican or Canadian firms.

Commission for Environmental Cooperation

This was an example of a side-payment during the NAFTA negotiations established by Clinton. The objective of the commission was to push Mexico to adopt stricter environmental policies. The comission enabled Clinton to win over the National Wildlife Federation's and the Natural Resource Defense Council's support for NAFTA

Security externalities of economic exchange

Trade liberalization may benefit one actor more than another, in relative terms. States are incentivized to liberalize trade with their allies, and decentivized to liberalize trade with their adveraries. The relative gains of trade liberalization could be used for strengthening military power, and therefore pose a security risk. Soft power is also at stake because as trade is liberalized, a smaller state may become economically dependent on another, such may be happening between China and Taiwan.

Treaties of Rome

Two treaties: the EEC treaty and the EURATOM treaty, both signed in 1957 by West Germany, France, Italy, and the Benelux countries. The first one led to the establishment of the European Economic Community on Jan1st, 1958. It proposed further reduction of custom duties, the creation of common transport and agricultural policies, as well as the creation of European Social Fund. In addition, this treaty gave birth to the European Commission, which is the main executive body of today's EU. The second treaty led to the creation of the European Atomic Energy Community (EURATOM). Unlike the EEC, which had changed and evolved over time, EURATOM has remained much the same and it's in force today only as a separate legal treaty. Many argue this is due to the sensitivity surrounding nuclear power among the public opinion in Europe. Nonetheless, both of these treaties represent important steps their signatories took when pooling some of their sovereignty in exchange for the benefits of cooperation and deeper integration.

Qualified Majority Voting

Under qualified majority voting, votes in the European Council are weighted according to the size of member states' populations; states with the largest populations (such as Germany and France, 29 votes each) have the highest number of votes. There are 345 total votes: it takes 255 votes (about 74%), the support of countries representing at least 62% of the total EU population, and the support of a majority of members for a decision to be passed. This concept is significant because the Single European Act instituted qualified majority voting which represented a major push towards quasi-supranationalism; it was a dramatic breakthrough in European integration.

Relative disparity shift

Uses the "relative disparity shift" as a hypothesis. When there is a rapid shift in economic power, regionalism is less likely because states will be overwhelmed by regionalization when there is a destabilizing rise + fall to power.

Win-Set

Win-sets are the possible outcomes that are likely to be accepted by the domestic interest groups who either must ratify the agreement or provide some other form of government backing. International agreements occur when there is an overlap between the win-sets of the states involved in the international negotiations. (see 2 level games)

The "ASEAN Way"

Works by consensus and carefully protects national sovereignty. i.e. Treaty of Amity and Cooperation in Southeast Asia (1976) spells out "non-interference in internal affairs of members" as one of the founding principles of ASEAN. Consensus and non-interference designed to protect sovereignty of members. But, these two things hurt the attempt to reach supranational integration. Everything comes down to the lowest common denominators. Can only integrate as much as the most reluctant members want to.

Bracero program

"1942-1964 (U.S. labor shortage due to WWII, Mexico declared war on Axis and thought it could contribute to the war effort by providing labor) Temporary contract labor, 50,000 workers in 1945 Allowed Mexicans to take up temporary work in the U.S. Over the 22 years, close to 4.5 million Mexicans came to the U.S. to work - it fed the circular migration patterns of Mexican workers into the U.S. Took wages that most Americans wouldn't take, there was concern over the exploitation of Bracero workers.

Zapatista Uprising

"1994 Zapatista National Liberation Army (EZLN) - mostly indigenous, peasant based movement with some urban intellectual leadership, grew out of Mexico's most southern and poor province, Chiapas. Chiapas has mostly subsistence agriculture and is excluded from NAFTA and capitalist development in practice. Grassroots movement able to connect with and earn trust of locals, also a lot of propaganda, guerilla movement that had hoped would spread into a national uprising, really was just contained to this southern region. Seeking consensus-based democracy, freedom for self-sufficiency and social justice/respect for an indigenous way of life. Used NAFTA as a rallying cry for their movement. Represents the north/south divide, unexpected reaction of farmers in Mexico to NAFTA."

Public Goods

"A good that is non-rivalrous (one person's consumption does not diminish the supply of a public good), and non-excludable. (Examples: clean air, collective security, and the oceans) Significance: There is collective action problem because of free riding (one nation can let the rest do the work). With increased trading a nation can use protectionist policies but still benefit by taking advantage of open markets (public good)."

Buenos Aires Consensus

"Conference in 2005 in Buenos Aires. In response to the Washington Consensus of the 1990s that favored efficiency of markets through liberalization. State intentionally kept out of the economy as much as possible. Represents a formalization of the desired strategic alliance between Brazil and Argentina. A move away from the unquestioned liberal policies of the 1990s: new emphasis on payment of foreign debt, growth and wealth distribution, education, and the future of Mercosur. Attempting to regionalize as a balance of power method (realist)."

IRS Firms

"Firms with increasing returns to scale. Output expands at a higher rate with additional inputs. (For example, 2 additional inputs would lead to more than 2 outputs) Constant returns to scale would mean 2 inputs leads to 2 outputs, and decreasing returns to scale means 2 inputs leads to less than two outputs. Significance: IRS firms are more likely to be part of trade because they have a profit incentive to expand. They will push the government to participate in regionalization. Mexican firms with IRS were supporters of NAFTA"

Customs Union

"On the hierarchy of RTA -- is a FTA with a common external tariff. Significance: The EEC (eventually renamed European Community of EC) was a customs union. It eventually turned into the EU. Neither Asia or North America has advanced to create a customs union."

FTA (Free Trade agreement)

"On the hierarchy of RTA it is an agreement to reduce tariffs on goods and services exported within member nations. It is a low level of economic integration. Significance: NAFTA and ASEAN are both free trade agreements. While Europe has moved beyond a FTA, countries part of NAFTA and ASEAN are reluctant to go forward. There are many FTA's between nations in Asia, which has lead to high levels of regionalization. "

Common Market

"On the hierarchy of RTA, it incorporates free trade agreements, and a customs union (common external tariff). In addition to that regulations are harmonized, there is an agreed upon regime which regulates uniformly and there is free cross border movement of factors of production (capital, goods, people and services) Significance: The EEC (European Economic Community) and EFTA (European free trade association) were both common markets, EEC had goals of greater integration while EFTA did not. EFTA has "lost" because original members joined the EU (which evolved from the ECC) "

Economic Union

"On the hierarchy of regional trade agreements, it incorporates a free trade agreement, a customs union and a common market. Monetary policies are harmonized. There are common policies on product regulation. Factors of production are movable. Sometimes it involves a unified currency. Significance: The Maastricht treaty in 1992 turned much of Europe into an economic union. Economic union involves a deep level of participation that not all countries are willing to give up sovereignty for."

Luiz Inácio Lula da Silva

"President of Brazil from 2003 to 2011, signed the Buenos Aires Consensus. Made an effort with the Buenos Aires Consensus to move back to the left. Member of the Workers Party, Brazilian left-wing party."

The Snake

"The Snake" was the first attempt at European monetary cooperation starting in the 1970s. Its main goal was to limit fluctuations between main European currencies by creating a single currency band and pegging all the EEC currencies to one another. This was meant to be achieve a higher level of coordination of economic policies in the EEC economies. However, this system was highly reliant on the US, as the currencies moved in relation to their rate against the dollar. Once the Bretton-Woods collapsed and the dollar started floating freely, the snake collapsed, as several countries abandoned their pegs. Even though unsuccessful, this first attempt at monetary coordination paved the way for the European Monetary System.

Strategic trade policy

"Theory that under specific conditions, government intervention by means of protecting or subsidizing domestic industry may enhance net welfare may outweigh the costs. Neoclassic say that can't be, but economists such as Krugman say that even though you are allowing the continuation of oligopoly, the positive spill over effect from the technology produced in sectors such as automotive and aerospace are worth it. The issue is that once one country engages in strategic trade, what if another country retaliates? The result would be a trade war, a scenario that almost played out between the U.S. and Japan in the 1980's."

ISI- (import substituting industrialization)

"Trade and economic policy that replaces foreign investment with domestic production. A country might prefer ISI because it wants to develop its own industries (to develop into exporters) rather than rely on imports. Can use protectionist measures (tariffs and nontariff barriers to trade) or promotional measures (subsidies, price supports). Mexico used ISI heavily under the PRI throughout the much of the early to middle of the 20th century before it began to be hit by economic shocks. NAFTA represents a stark divergence from this earlier policy, favoring instead FDI."

East Asian Summit

16 East Asia countries, plus US and Russia as of 2011. First summit 2005 at Kuala Lumpur. Regional summit similar to APEC, but smaller in scle. Notable because Asian regionalism doesn't move much farther than institusions like EAS and APEC, for possible reasons including diversity of members.

ARF (ASEAN regional Forum

A form of security cooperation involving ASEAN and the Northeast Asian nations. They mostly share information. There are 27 member nations, including the U.S., the European Union, the ASEAN members, and other Southeast Asian nations. They met for the first time in 1994, and meetings have been held annually since.

HSA (Hemispheric social alliance)

A group whose purpose is to work toward the creation of a Free Trade Area of the Americas (FTAA).

Chiang Mei initiative

A multilateral currency swap arrangement launched on March 24, 2010 among the ten members of the Association of Southeast Asian Nations (ASEAN), the People's Republic of China (including Hong Kong), Japan, and South Korea. It draws from a foreign exchange reserves pool worth US$120 billion. The initiative began as a series of bilateral swap arrangements after the ASEAN Plus Three countries met on 6 May 2000 in Chiang Mai, Thailand, at an annual meeting of the Asian Development Bank. After 1997 Asian Financial Crisis, member countries started this initiative to manage regional short-term liquidity problems and to facilitate the work of other international financial arrangements and organizations like International Monetary Fund.

Mutual Recognition

A principle ensuring that a product made in one EU member state must be admitted to the market of another member state. Therefore, it moves the whole process of regulation down the scale because the weakest regulation in one member country becomes the prevailing European norm. Mutual recognition was instituted by the ECJ and is significant because it is representative of the ECJ's efforts to Europeanize law. Also, it is an example of further European integration through the regulation of the European market.

Direct Effect

A principle of European Union law, which states that EU law can grant rights to individuals in member states that the courts of those states are forced to recognize. Although direct effect was not established in any particular EU treaty, the precedent for it was set by the European Court of Justice in the case Van Gend en Loos v. Nederlandse Administratie der Belastingen. As long as an EU provision is clear, is a negative, rather than a positive, obligation, is unconditional, contains no reservation on the part of the state, and isn't dependent on any national implementing measure, then direct effect can be applied to the right in question in the case.

Snapback Protection

A provision in NAFTA which allows for a reversion to original tariff structures in certain industries in the event of a surge in imports. President Clinton ensured snapback protections for agricultural groups in order to gain their support for NAFTA. Textiles and automobiles were also subject to some snapback protections under NAFTA.

Catalonia

A region and Autonomous Community in northeastern Spain. Its largest city is Barcelona. They speak both Spanish and Catalan. The region spills over into France. Is part of the Four Motors subregion. Is home to a nationalist movement that wants to separate itself from Spain. Very economically strong, more so than most other parts of Spain.

Functionalism

A theory that focuses on common interests and needs shared by states and non-state actors, rather than nations' self-interests, in processes of global integration. Therefore, it rejects ideas of state power and political influence in explaining the reason for the creation of international integration. Neo-functionalists focus on regional integration and believe that states initially integrate in functional or economic zones and then further integration becomes harder to resist once the process has started. It is significant for our study because neo-functionalists see Europe as evolving by a series of functions, harmonizing regulations, etc., and see this integration process as predictable.

Chinese Commonwealth

John Kao calls Chinese Business Networks more like a Chinese Commonwealth. A commonwealth is primarily a network of entrepreneurial relationships. Unlike Japanese Production Networks, the Chinese Commonwealth has an open architecture, and it represents access to local resources like information, business connections, raw materials, and more. It is an interconnected yet open system.

Europan Parliament

It is composed of 766 members, directly elected to five-year terms. Members of the European Parliament (MEPs) form political rather than national groups. The Parliament acts as the EU's public forum, debating issues of public importance and questioning the Commission and the Council. The Parliament can amend or reject the EU budget. HQ: Brussels and Strasbourg, in the Alsace region of France

Senkaku [Japanese name]/Diaoyutai [Chinese name]

A group of islands in the East China Sea that are disputed between Japan (which currently controls them) and the PRC. Interestingly, the PRC and Taiwan both believe that the islands are part of Taiwan. This dispute serves as a barrier to further regionalism in East Asia.

Costa V. ENEL

Costa V ENEL: 1964 court case between Mr. Costa, an Italian citizen who opposed nationalist of the electricity sector in Italy and ENEL, newly created SOE electricity company. Mr. Costa argued that the nationalization violated the Treaty of Rome and the Italian Constitution. Italian Supreme Court ruled in favor of ENEL, stating that Treaty of Rome could not prevail against the Italian nationalization law. The case then when to the ECJ. Significance: The case established the supremacy of EC law over national law. It also established citizens can raise challenges against national laws based on EC law.

FTAA

Free Trade Area of the Americas. A proposed agreement to eliminate or reduce the trade barriers among all countries in the Americas excluding Cuba

Cowan v Trevsor Public

"Cowan V Trevsor Public (1989). British tourist Cowan got mugged in France. France compensates nationals, permanent residences, and citizens of countries with reciprocal compensation agreements. British and French had no such agreement. Cowan wants compensation. Sues France through ECJ claiming he is being discriminate against by virtue of his nationality. ECJ tells France to give money. Significance: establishes that every citizen of every member state is privileged to the same services as the nationals of each member state. Every citizen crossing Member state borders inside the community is protected by the free movement principle and right to equal protection in any member state "

Immigration industrial complex

-The immigration industrial complex is the confluence of public and private sector interests in the criminalization of undocumented migration, immigration law enforcement, and the promotion of 'anti-illegal' rhetoric.

Yasukuni shrine

A Shinto Shrine in Japan that became controversial after enshrining 14 WWII Class-A war criminals. While its purpose is to commemorate Japanese war dead, the presence of the war criminals and frequent visits by Japanese Prime Ministers has led to outrage in China and South Korea. Many believe that the visits show a lack of remorse for the atrocities committed by the Japanese during their occupation of Korea and Manchuria. This tension could be a factor in why regionalism is relatively weak in Asia.

Confucian capitalism

A cultural business model that emphasizes Confucian values of thrift, hard work, family (even incompetent family members over competent others), and obedience to a patriarichal authority in an attempt to build a small dynasty.

SEZs (Special Economic Zones)

A geographic area (that may span across international borders) set up by a government or governments, to promote the economic integration and synergy of the area. SEZs usually have little or no economic barriers such as taxes or other restrictive laws and/or policies. SEZs allowed states in East Asia to economically integrate (regionalize) without having to politically integrate (regionalism). SEZs were seen in the 1980s, when PRC Chairman Xiaopeng Peng established SEZs along costal China to begin to open the country to foreign trade. Other SEZs include the: SIJORI (Southern) Growth Triangle and the Baht Economic Zone.

Dokdo [Korean name]/Takeshima [Japanese name]

A group of islands in the Sea of Japan/East Sea that are disputed between Japan and South Korea (which currently controls them). This dispute serves as another barrier to further regionalism in East Asia, and has caused South Korea to seek closer ties with China in order to face down Japan.

Spratly Islands

A group of islands in the South China Sea that are disputed between China (which claims the entire South China Sea as its territory) and Vietnam, the Philippines, Malaysia, and Taiwan. Brunei also claims a small portion as well. The islands may contain reserves of oil and natural gas, and they are good fishing grounds. This dispute serves as yet another barrier to further regionalism in East Asia. Example of a security externality.

Keiretsu

A keiretsu is a set of companies with interlocking business relationships and shareholdings. It has dominated Japanese business after the US told Japan to get rid of their zaibatsu system in the years after WWII. There is the horizontal keiretsu: a set of companies in almost every industry in economy that is financed by a central bank like Mitsubishi. There is also the vertical keiretsu, which link suppliers, manufacturers, and distributors of one industry. There's an assembler on top, then first tier of suppliers, second, and so on. Toyota is an example. Produces very little of what is actually in a Toyota, mostly is out to subcontractors.

Regional Production Network

A production system that spans throughout a local region. With a parent company in one country at the top that sells the finished product, subsidiaries exist in other states to produce and/or assemble the particular good that the parent ultimately sells on the market. These subsidiaries exist to better take advantage of local resources, labor, or capital. A possible consequence of this system is that the host countries of the subsidiaries come to be technologically and economically dependent on the parent company's host state. An example of this is the Japanese Production Network model.

SAJORI Growth triange

Also known as Indonesia, Mayalsia, Singapore growth triangle, it is a growth triangle between Singapore, Johor, and Riau founded in 1989--the first in South east Asia.. It is the most successful subregional triangle of this sort. Its success stems from comparative advantage: each country utilizes its relatively abundant factor to create a complimentary growth triangle. The triangle is export oriented, and extremely lucrative for major corporations. It is another example of regionalization rather than regionalism in Asia.

Obama Pivot

American "pivot" to Asia. As of 2008 when Obama took office, his administration has put their sights on Asia as the new area of focus. Because of the huge economic potential of the area, the US has determined Asia as an area of strategic interest (Hilary Clinton's Pacific Century), one that is worth securing militarily. Although the US military is still engaged in the Middle Eastern quagmire, the Obama administration still has its eye on Asia, and is pursuing agreements such as the TPP to secure US vital interests in the area.

Bundesbank

Bundesbank: "Buba" is the central bank of Germany. Established in 1957 it was responsible for managing the D-mark, like the fed does with the dollar. It was the first fully independent bank in Europe and is the most important member of the ESCB. It has historicaly kept a tight lid on inflation and used strict monetary policy. Significance: Under the EMS it was the dominant institution and helped position Germany as the gold standard for currency value that all other members were required to adhered to within a band. Now is the most important member of the ESCB so it is influential in setting the monetary policy of both the EMU and non-EMU EU states.

Cassis de Dijon

Cassis de Dijon: In this 1979 court decision ReweZentral AG, a large german food and beverage company complained to the ECJ that the German government was making it difficult for it to important and sell the French drink, Cassis de Dijon. The Court ruled in the firms favor saying that if a companyis allowed to make a product freely available for sail in one EC country then it must be able to do so in all EC countries. Significance. This case established the principle of mutual recognition, whereby products sold in one market cannot be subject to greater regulation in another EC country unless very specific conditions are met.

Hugo Chavez

Chavez was the former president of Venezuela. His opposition, along with the opposition of other South American leaders to an expansion of NAFTA ensured that Free Trade Area of the Americas (FTAA) was never created.

European Monetary System

EMS was established in 1979, when the majority of the EEC members linked their currencies in order to prevent large fluctuations relative to one another. This treaty entailed keeping the member currencies within a +/- 2.25% band among each other. Although there was no official anchor, due to its relative strength, as well as the low-inflation policies of Bundesbank, the Deutchmark emerged as the center of the EMS. As a consequence, all members were expected to follow Germany's lead if they were to stay in the system. The system worked well until speculative attacks on some member currencies (Italy and UK for example) led them to abandon it. This, in turn, lead to dissatisfaction in other countries, prompting talks on establishing a monetary union (i.e. single currency).

European Monetary Union

EMU---Definition: The European Monetary Union is the monetary component of the European Economic and Monetary Union. Established as a formal goal in the treaty of Maastricht in 1992, it came into full force with the introduction of the Euro in 1999. The current 18 member states all share a common currency that is managed through the European Central Bank. Significance: Reduces trade and investment transaction costs across borders. Binds the states together; all share common monetary policy and are subject to the supranational ECB. From a functionalist perspective this union will lead to greater integration as new issues arise that need to be dealt with through a supranational framework. Exposes states collectively to problems that can no longer be contained through currency devaluation, as the Greece crisis and bailouts show. Inability of states to use inflationary policies to grow with a common currency is also important.

Flying Geese Pattern of Development

Following up on the regional division of labor, Japanese officials dubbed their plan for development the "flying geese pattern of development." They hoped that eventually this could lead to a pattern of industrial sequencing as more developed countries pass down industries in which they no longer have a comparative advantage. Japan is the lead goose flying ahead and as it outgrows certain technologies it will pass them down to the NIE's and those countries will outgrow them and then pass it down to other states.

METI (Japan's Ministry of Economy, Trade and Industry)

Formerly MITI (Ministry of international trade and industry) until 2001. One of the most powerful ministries of Japan, largely responsible for arranging industrial policy that led to the integration of Japanese business conglomerates. Following Hatch's idea of the state exercising "coordinatorship", MITI has been instrumental in coordinating development in the region, and the formation of the "flying geese" pattern as well.

Guanxi

From Chinese, it is a massive network of contacts in which firms can connect with one another to find resources or business opportunities. The system is built on trust based on many interactions between the involved parties to build up a positive report with each other. It is mainly ethnic Chinese who use the guanxi, but it has been extended to foreigners, such as US firms looking to expand into East Asia.

General trading companies

General trading companies are the horizontal keiretsus in Asia that basically have their hands in every possible industry ranging from customs to beer production to technology.

Regional Division of Labor

In the 1990s, the common style of Japanese state officials and business executives was to create a regional division of labor based on the different technological levels of member countries. This means that they tried to promote economic integration through observing and following up on a state's comparative advantage in a skill or trade.

Jose Manuel Barroso

Jose Manuel Barroso: Former PM of Portugal, Jose is the 11th and current President of the european Commission. Heavily pushed the treaty of Lisbon, oversaw Turkey's application process, establish the Galileo positioning system, pushing an EU climate change package, and has been very active in the pushing the EPSF in response to the Eurzone crisis and strengthenin the supranational nature of the EU

NICs (Newly Industrializing Countries) or NIEs (Newly Industrializing Economies)

Newly Industrialized Countries/Newly Industrialized Economies are areas that recently experienced or still undergo rapid economic growth. In 1980s in Asia, examples of NICs/NIEs are Hong Kong, Singapore, Korea and Taiwan were the NICs/NIEs in Asia that moved as leaders of the asia flying geese pattern along with Japan. Current examples of NICs/NIEs are Brazil, China, Mexico, South Africa, etc.

Open Regionalism

Open regionalism is a regional economic integration that is not discriminatory against outside countries; typically a group of countries that agrees to reduce trade barriers. Adopted by APEC in 1989. Can also mean: open membership, global liberalization, and trade facilitation

Asian Financial Crisis

The 1997 Asian Financial Crisis was a period of financial crisis began in July 1997 in Thailand. The crisis affected Korea, Indonesia and Thailand most, and Hong Kong, Laos, Malaysia and the Philippines were affected by it as well. Other Asian countries all suffered from a loss of demand and confidence throughout the region.

China circle

The China Circle is Borrus's term for an ethnic Chinese business network. He discusses at length about how the China Circle was able to gain on Japanese production networks, and how part of the US success was through its ability to tap into this vibrant infrastructure in Southeast Asia where smaller and flexible, mostly Chinese, manufacturers initially manufacturing goods and products.

TPP (Trans Pacific Partnership)

The TPP began as an agreement between Singapore, New Zealand, Brunei, and Chile in 2006 that has expanded to 12 members including the US. The Obama Administration has made the TPP the center of its pivot to East Asia. The agreement and negotiations look to foster better trade and investment within the TPP, promote growth, and create jobs. However, there are numerous sticking points including that of countries wanting to maintain some of their more protectionist goods such as sugar. TPP has also been criticized due to the secrecy of the negotiations.

Hub and Spokes system

The hub and spoke system is used to discribe the way in which the United States approaches interactions with Asia. This system places the hub, the United States, in contact with the spokes, each individual asian nation, on a bilateral basis. It is belived that this approach has helped inhibit the formation of regionalism.

relationalism

This is the word Hatch uses to explain the phenomenon of Japenese production networks, and is the idea that the relationships people build impact their economic choices: "we generally prefer to do business with those we trust". He goes on to specify that actors choose to embed themselves in some relationships and not others, and calls this "selective relationalism". These relational ties (if they are strong) reduce the cost of gathering information about prospective trade partners, but generate costs when they become exclusionary, if they limit insiders from outside-world information (eg Job oppurtunities)

Constructivist theory of IPE

While internal national interests and power will be important to constructivists in regionalism, culture will also play a part. They will point to the importance of nationalism in explaining the varying degrees of regionalism in the EU, NAFTA, and Asia.

Comfort women

Women and girls from Japanese occupied territories in the Second World War that served as sex slaves/prostitutes to Japanese soldiers. This is one of the historical conflict between Korea and Japan that prevents Korea and Japan from having closer ties. Until today, Korean comfort women still protest in front of the Japanese Embassy in Seoul every wednesday, asking for a proper apology that's acceptable.

Political Opportunity structure

an approach of social movements heavily influenced by political sociology. It argues that success or failure of social movements is primarily affected by political opportunities

Structural Funds

basic instruments for supporting social and economic development in EU member states, account for over a third of EU budget. Significance: because it is the EU trying to help individual states in ways that states cannot help themselves - shows weaknesses and strengths for big and small countries

Rent-seeking behavior

rents are excess profits. Profits aren't supposed to exist for very long, rents are excess profits that can't be eaten away from competition because there is no competition. Eg. firms with government protection. Rent-seeking is the idea that firms will not invest in new technologies or higher production, but will instead hire lobbyists to make sure that rents are maintained. ISI firms in NAFTA case were rent-seekers.

The Marshall Plan

the American initiative to aid Europe, in which the United States gave economic support to help rebuild European economies after the end of WWII in order to prevent the spread of Soviet Communism The plan was in operation for four years beginning in April 1948. The goals of the United States were to rebuild war-devastated regions, remove trade barriers, modernize industry, and make Europe prosperous again.