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international relations : part 2

International Organization, Law, and Human Rights:

Chapter Summary

  • International anarchy is balanced by world order—rules and institutions through which states cooperate for mutual benefit.
  • States follow the rules—both moral norms and formal international laws—much more often than not. These rules operate through institutions (IOs), with the UN at the center of the institutional network.
  • The UN embodies a tension between state sovereignty and supranational authority. In part because of its deference to state sovereignty, the UN has attracted virtually universal membership of the world’s states, including all the great powers.
  • The UN particularly defers to the sovereignty of great powers, five of whom as permanent Security Council members can each block any security-related resolution binding on UN member states. The five permanent members of the Security Council are the United States, France, Great Britain, China, and Russia.
  • Each of the 192 UN member states has one vote in the General Assembly, which serves mainly as a world forum and an umbrella organization for social and economic development efforts.
  • The UN is administered by international civil servants in the Secretariat, headed by the secretary-general.
  • The regular UN budget plus all peacekeeping missions together amount to far less than 1 percent of what the world spends on military forces.
  • UN peacekeeping forces are deployed in regional conflicts in five world regions. Their main role is to monitor compliance with agreements such as cease-fires, disarmament plans, and fair election rules. They were scaled back dramatically in 1995–1997, then grew rapidly again in 1998–2001.
  • UN peacekeepers operate under the UN flag and command. Sometimes national troops operate under their own flag and command to carry out UN resolutions.
  • IOs include UN programs (mostly on economic and social issues), autonomous UN agencies, and organizations with no formal tie to the UN. This institutional network helps strengthen and stabilize the rules of IR.
  • International law, the formal body of rules for state relations, derives from treaties (most important), custom, general principles, and legal scholarship—not from legislation passed by any government.
  • International law is difficult to enforce and is enforced in practice by national power, international coalitions, and the practice of reciprocity.
  • The World Court hears grievances of one state against another but cannot infringe on state sovereignty in most cases. It is an increasingly useful avenue for arbitrating relatively minor conflicts.
  • A permanent International Criminal Court (ICC) began operations in 2003. Taking over from two UN tribunals, it hears cases of genocide, war crimes, and crimes against humanity, starting with war crimes in Sudan.
  • In international law, diplomats have long had special status. Embassies are considered the territory of their home country.
  • Laws of war are also long-standing and well established. They distinguish combatants from civilians, giving each certain rights and responsibilities. Guerrilla wars and ethnic conflicts have blurred these distinctions.
  • International norms concerning human rights are becoming stronger and more widely accepted. However, human rights law is problematic because it entails interference by one state in another’s internal affairs.
International Trade :

Chapter Summary

  • Liberal economics emphasizes international cooperation—especially through worldwide free trade—to increase the total creation of wealth (regardless of its distribution among states).
  • Mercantilism emphasizes the use of economic policy to increase state power relative to that of other states. It mirrors realism in many ways. Mercantilists favor trade policies that produce a trade surplus for their own state. Such a positive trade balance generates money that can be used to enhance state power.
  • Trade creates wealth by allowing states to specialize in producing goods and services for which they have a comparative advantage (and importing other needed goods).
  • The distribution of benefits from an exchange is determined by the price of the goods exchanged. With many buyers and sellers, prices are generally determined by market equilibrium (supply and demand).
  • Politics interferes in international markets in many ways, including the use of economic sanctions as political leverage on a target state. However, sanctions are difficult to enforce unless all major economic actors agree to abide by them.
  • States that have reduced their dependence on others by pursuing self-sufficient autarky have failed to generate new wealth to increase their well-being. Self-reliance, like central planning, has been largely discredited as a viable economic strategy.
  • Through protectionist policies, many states try to protect certain domestic industries from international competition. Such policies tend to slow down the global creation of wealth but do help the particular industry in question. Protectionism can be pursued through various means, including import tariffs (the favored method), quotas, subsidies, and other nontariff barriers.
  • The volume of world trade is very large—about one-sixth of global economic activity— and is concentrated heavily in the states of the industrialized West (Western Europe, North America, and Japan/Pacific) and China.
  • Over time, the rules embodied in trade regimes (and other issue areas in IR) become the basis for permanent institutions, whose administrative functions provide yet further stability and efficiency in global trade.
  • The World Trade Organization (WTO), formerly the GATT, is the most important multilateral global trade agreement. The GATT was institutionalized in 1995 with the creation of the WTO, which expanded the focus on manufactured goods to consider agriculture and services. Intellectual property is another recent focus.
  • In successive rounds of GATT negotiations over 50 years, states have lowered overall tariff rates (especially on manufactured goods). The Uruguay Round of the GATT, completed in 1994, added hundreds of billions of dollars to the global creation of wealth. The Doha Round began in 2003 and has yet to conclude. Meanwhile textile tariffs were dropped worldwide in January 2005.
  • Although the WTO provides a global framework, states continue to operate under thousands of bilateral trade agreements specifying the rules for trade in specific products between specific countries.
  • Regional free trade areas (with few if any tariffs or nontariff barriers) have been created in Europe, North America, and several other less important instances. NAFTA includes Canada, Mexico, and the United States.
  • International cartels are occasionally used by leading producers (sometimes in conjunction with leading consumers) to control and stabilize prices for a commodity on world markets. The most visible example in recent decades has been the oil producers’ cartel, OPEC, whose members control more than half the world’s exports of a vital commodity, oil.
  • Industries often lobby their own governments for protection. Governments in many states develop industrial policies to guide their efforts to strengthen domestic industries in the context of global markets.
  • Certain economic sectors—especially agriculture, intellectual property, services, and military goods—tend to deviate more than others from market principles. Political conflicts among states concerning trade in these sectors are frequent.
  • Because there is no world government to enforce rules of trade, such enforcement depends on reciprocity and state power. In particular, states reciprocate each other’s cooperation in opening markets (or punish each other’s refusal to let in foreign products). Although it leads to trade wars on occasion, reciprocity has achieved substantial cooperation in trade.
  • The world economy has generated wealth at an accelerating pace in the past two centuries and is increasingly integrated on a global scale, although with huge inequalities.
  • Communist states during the Cold War operated centrally planned economies in which national governments set prices and allocated resources. Almost all these states are now in transition toward market-based economies, which more efficiently generate wealth.
  • Free trade agreements have led to a backlash from politically active interest groups adversely affected by globalization; these include labor unions, environmental and human rights NGOs, and certain consumers.
Global Finance and Business:

Chapter Summary

  • Each state uses its own currency. These currencies have no inherent value but depend on the belief that they can be traded for future goods and services.
  • Gold and silver were once used as world currencies that had value in different countries. Today’s system is more abstract: national currencies are valued against each other through exchange rates.
  • The most important currencies—against which most other states’ currencies are compared—are the U.S. dollar, the euro, and the Japanese yen.
  • Inflation, most often resulting from the printing of currency faster than the creation of new goods and services, causes the value of a currency to fall relative to other currencies. Inflation rates vary widely but are generally much higher in the global South and former Soviet bloc than in the industrialized West.
  • States maintain reserves of hard currency and gold. These reserves back a national currency and cover short-term imbalances in international financial flows.
  • Fixed exchange rates can be used to set the relative value of currencies, but more often states use floating exchange rates driven by supply and demand on world currency markets.
  • Governments cooperate to manage the fluctuations of (floating) exchange rates but are limited in this effort by the fact that most money traded on world markets is privately owned.
  • Over the long term, the relative values of national currencies are determined by the underlying health of the national economies and by the monetary policies of governments (how much money they print).
  • Governments often prefer a low (weak) value for their own currency, as this promotes exports, discourages imports, and hence improves the state’s balance of trade. However, a sudden unilateral devaluation of the currency is a risky strategy because it undermines confidence in the currency.
  • To ensure discipline in printing money—and to avoid inflation—industrialized states turn monetary policy over to semiautonomous central banks such as the U.S. Federal Reserve. By adjusting interest rates on government money loaned to private banks, a central bank can control the supply of money in a national economy.
  • The World Bank and the International Monetary Fund (IMF) work with states’ central banks to maintain stable international monetary relations. From 1945 to 1971, this was done by pegging state currencies to the U.S. dollar and the dollar in turn to gold (backed by gold reserves held by the U.S. government). Since then the system has used Special Drawing Rights (SDRs)—a kind of world currency controlled by the IMF—in place of gold.
  • The IMF operates a system of national accounts to keep track of the flow of money into and out of states. The balance of trade (exports minus imports) must be balanced by capital flows (investments and loans) and changes in reserves.
  • International debt results from a protracted imbalance in capital flows—a state borrowing more than it lends—in order to cover a chronic trade deficit or government budget deficit.
  • The U.S. financial position declined naturally from its extraordinary predominance immediately after World War II. The fall of the dollar-gold standard in 1971 reflects this decline.
  • The positions of Russia and the other states of the former Soviet bloc declined drastically as they made the difficult transition from communism to capitalism. Though the uncontrolled inflation of the early 1990s has subsided, the economies of the former Soviet republics are still not fully integrated in the world economy.
  • Multinational corporations (MNCs) do business in more than one state simultaneously. The largest are based in the leading industrialized states, and most are privately owned. MNCs are increasingly powerful in international economic affairs.
  • MNCs contribute to international interdependence in various ways. States depend on MNCs to create new wealth, and MNCs depend on states to maintain international stability conducive to doing business globally.
  • MNCs try to negotiate favorable terms and look for states with stable currencies and political environments in which to make direct investments. Governments seek such foreign investments on their territories so as to benefit from the future stream of income.
  • MNCs try to influence the international political policies of both their headquarters state and the other states in which they operate. Generally MNCs promote policies favorable to business—low taxes, light regulation, stable currencies, and free trade. They also support stable international security relations, because war generally disrupts business.
  • Increasingly, MNCs headquartered in different states are forming international alliances with each other. These inter-MNC alliances, even more than other MNC operations across national borders, are creating international interdependence and promoting liberal international cooperation. 
International Integration :

Chapter Summary

  • Supranational processes bring states together in larger structures and identities. These processes generally lead to an ongoing struggle between nationalism and supranationalism.
  • International integration—the partial shifting of sovereignty from the state toward supranational institutions—is considered an outgrowth of international cooperation in functional (technical and economic) issue areas.
  • Integration theorists thought that functional cooperation would spill over into political integration in foreign policy and military issue areas. Instead, powerful forces of disintegration are tearing apart previously existing states in some regions (especially in the former Soviet Union and Yugoslavia).
  • The European Union (EU) is the most advanced case of integration. Its 27 member states have given considerable power to the EU in economic decision making. However, national power still outweighs supranational power even in the EU.
  • Since the founding of the European Coal and Steel Community (ECSC) in 1952, the mission and membership of what is now the EU have expanded continually.
  • The most important and most successful element in the EU is its customs union (and the associated free trade area). Goods can cross borders of member states freely, and the members adopt unified tariffs with regard to goods entering from outside the EU.
  • Under the EU’s Common Agricultural Policy (CAP), subsidies to farmers are made uniform within the community. Carrying out the CAP consumes 40 percent of the EU’s budget. EU agricultural subsidies are a major source of trade conflict with the United States.
  • The EU has a new monetary union with a single European currency (the euro) in 16 of the 27 EU states. It is the biggest experiment with money in history and had great success in its first years. Such a union requires roughly comparable inflation rates and financial stability in participating states.
  • In structure, the EU revolves around the permanent staff of Eurocrats under the European Commission. The Commission’s president, individual members, and staff all serve Europe as a whole—a supranational role. However, the Council of the European Union representing member states (in national roles) has power over the Commission.
  • The European Parliament has members directly elected by citizens in EU states, but it has few powers and cannot legislate the rules for the community. The European Court of Justice also has limited powers, but has extended its jurisdiction more successfully than any other international court, and can overrule national laws.
  • The 1991 Maastricht Treaty on closer European integration (monetary union and political-military coordination) provoked a public backlash in several countries against the power of EU bureaucrats.
  • Twelve new members, mostly Eastern European, joined the EU in 2004 and 2007. The EU’s structures and procedures are being adapted as it moves from 15 to 27 members. The EU faces challenges in deciding how far to expand its membership, particularly regarding Turkey.
  • A different type of international integration can be seen in the growing role of communication and information operating across national borders. Supranational relationships and identities are being fostered by new information technologies— especially mass media such as TV, radio, and the Internet—although the process is still in an early stage.
  • Governments use the dissemination of information across borders as a means of influencing other states. Government access to information can also increase the stability of international relationships, since the security dilemma and other collective goods problems become less difficult in a transparent world.
  • The greater and freer flow of information around the world can undermine the authority and power of governments as well. Authoritarian governments find it hard to limit the flow of information into and out of their states.
  • Telecommunications are contributing to the development of global cultural integration. This process may hold the potential for the development of a single world culture. However, some politicians and citizens worry about cultural imperialism—that such a culture would be too strongly dominated by the United States.
  • Transnational communities in areas such as sports, music, and tourism may foster supranational identities that could someday compete with the state for the loyalty of citizens. 


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