The Impact of Economic Crises on International Trade

1. Christian Caratas, Tamara Vujicic
Alexandru Caratas, Jeanne Whitesides, Nicole Michaud

2.  ANCIENT
◦ Trade of goods over long distances
◦ First record: 19th century BC
◦ Arabian nomads in the Far East
◦ Greeks exploit trading opportunities with
India prior to the Roman Empire
◦ Silk Road
◦ Incense Route for the luxury goods

3.  EARLY MODERN
◦ Vasco da Gama
◦ 1592 first foreign trade
licenses to prevent
smuggling and piracy
◦ 1602 foundation of
“The Dutch East India
Company”
 POST MODERN
◦ 1946 Bretton Woods system
◦ 1947 General Agreement on
Tariffs and Trade
◦ 1958 E.E.C.
◦ 1960 E.F.T.A.
◦ 1994 N.A.F.T.A. takes effect
◦ 1995 foundation of WTO
◦ 2002 launching of the Euro
Zone

4.  Tulip Mania: 1936 - 1937
 The Great Depression: 1929 – 1939
 Oil Crisis: 1973
 Black Monday: 1987
 Financial Crisis: 2007 - 2008

5. What caused the Great Depression ?
 A combination of domestic and worldwide
conditions
 A combination of a stock market crash, bad
banking structure and tight monetary policy

6.  The crisis started in October 1973
 The members of OPEC proclaimed an oil
embargo

7.  Also known as the Global Financial Crisis 2008
 Considered by many economists the worst
financial crisis since the Great Depression of
the 1930s
 Threat of total collapse of large financial
institutions, the bailout of banks by national
governments, and
downturns in stock
markets around the world

8.  Propagation of crisis because of
international trade
 Unclear impact:
 Drop in imports?
 Rise in exports?
 Lagging effect

9.  Tough Macro situation
 Trade protectionism
 Boosting domestic production
 Selective reduction
 WTO constraints and incentives

11.  International trade:
drop by more than
50%
 Spiral effect
 Weak Macroeconomic
stability
 Plunge in production
worldwide
 Structural changes in
composition
 Fall in oil imports
 Rise in imports of
substitute goods
 Restructuring for
sustainable energies

14.  Main trade-limiting measures taken by countries in
the wake of the financial crisis
Measure
• General Tariff
Hike
WTO agreement
• GATT
Country /Region
• Russia, India,
Turkey, Viet
Nam, Ukraine,
EU, Brazil,
Ecudor

15.  Main trade-limiting measures taken by countries in
the wake of the financial crisis
Measure
• Standards and
Certification
WTO agreement
• TBT
Country /Region
• Mayalsia,
India,
Indonesia,
Ecudor,
Thailand,
South Korea

16.  Main trade-limiting measures taken by countries in
the wake of the financial crisis
Measure
• Import
Licensing
System
WTO agreement
• Agreement on
Import
Licensing
Procedures
Country /Region
• India,
Indonesia,
Argentina

17.  Main trade-limiting measures taken by countries in
the wake of the financial crisis
Measure
• Government
Procurement
WTO agreement
• Agreement on
Government
Procurement
Country /Region
• US, Indonesia,
Australia,

18.  Main trade-limiting measures taken by countries in
the wake of the financial crisis
Measure
• General Tariff
Hike
WTO agreement
• GATT
Country /Region
• Russia, India,
Turkey, Viet
Nam, Ukraine,
EU, Brazil,
Ecudor

19.  Main trade-limiting measures taken by countries in
the wake of the financial crisis
Measure
• Consumer
Subsidies
WTO agreement
•GATT
Country /Region
•Malaysia

20. Sources:
http://www.porttechnology.org/
http://www.nber.org/
http://www.un.org/en/unitar_economiccrisis_tradeshocks.pdf
http://www.ceps.eu/system/files/article/2009/10/264-293-Forum.pdf
http://www.twnside.org.sg/title2/wto.info/2009/twninfo20090601.htm
http://en.wikipedia.org/wiki/International_trade
http://unctad.org/en/docs/ditctab20102_en.pdf