1. Canada has less a banking system, which is not as much a risk taker as its American counterpart. This maybe due to our history of not being as much a gambler as our cousin is in remaining in perpetrating open ended conflicts and allowing the housing market to go wildly in debt.
2. Canada has other banking rules, which make it less vulnerable than those risk takers. We invest but the rules required by lenders is much more stringent, I understand.
3. Canada has fewer bank branches, which can be affected by the current drop in lending rates. This means fewer banks will lose less money on account of the faulty borrowing that has been going on.
4. Interest rates in Canada are likely to remain low compared to American counterparts but mortgage rates are expected to increase. Lower interest rates will invite more people to borrow and will stimulate the economy (as long as those people are solvent).
5. Canada is on the top of the list of the most stable banks. Sweden is second. Both these countries enjoy a relatively high standard of living and attract a good deal of foreign investment even during difficult times.
6. People have lost billions south of the border. Thankfully the amount of money lost through the Canadian system has been much smaller.
7. Our jobless rate is less than half of what it was in the early eighties when the recession was the worst since the WWII
8. There will be cuts in the demand for our commodities but those will be less in proportion than those felt by our American friends
9. Economic growth is predicted to be smaller but not negative as can be other harder hit countries
10. Banks will continue to cut interest rates to help vitalize economic growth through this economic slump

The Great Depression (1929)

The Big Crash

After the extravagance of the Roaring Twenties, the American stock market was getting shaky amidst speculative fears. Between 1 September and 21 October, the market fell by 40 percent. On 24 October 1929, the stock market began to drop drastically. It was known as Black Thursday.  By July 1932, it was down by 90 per cent.

By 1933, a quarter of the American workforce was out of job. Widespread unemployment and misery followed. It caused the world to plunge into a global depression that lasted for more than a decade until World War II.

People could be seen everywhere on the streets on Black Thursday, 24 October 1929, as the stock market crashed. (Photo courtesy of Flickr)

Recovery

World War II was declared in 1941 and the preparations brought the economy back on track.

Importance

The Great Depression, which is the worst that the world has ever seen, is still being used as a benchmark for how far the economy can fall.

The Oil Shock (1973)

The Big Crash

It began when the world's oil producers quadrupled oil prices. On 17 October, they announced that they would stop shipping oil to the United States, its allies in Western Europe and Japan. It was a move to retaliate against US for supporting Israel in the Yom Kippur War against Iraq, Syria and Egypt in 1973.

The surge in oil prices caused a jump in inflation which led to the first instance of stagflation (people were out of jobs but prices remained stubbornly high). It was the worst thing that could happen to an economy.

Recovery

Oil prices stabilised in the late 1970s, but rose to a new peak when war broke out in 1981 between Iran and Iraq. However, it declined gradually again after the war.

Importance

The Oil Shock is brought up as a warning to the economy each time oil prices shoot up to new records.

Black Monday (1987)

The Big Crash

A dark cloud loomed across the nation as the trade deficit continued to widen and there was a rash of investigations into insider trading. On 19 October 1987, jittery investors who were hit by confidence moved en masse out of stocks into safer bonds. Computers automatically cut their traders' losses by issuing a large number of sell orders. This caused the system to lag, creating mass panic among investors. They reacted by dumping stocks in the darkness before they fell by more.

That day, the Dow Jones Industrial Average saw the biggest percentage drop in history by 22.6 per cent, wiping out US$500 billion in one day.

Panic selling swept through Wall Street as the Dow dropped by more than 500 points. (Photo courtesy of Flickr)

Recovery

Global markets restricted trading. Liquidity was pumped into the system. Recovery was fairly rapid and the Dow rebounded to its previous level within a year.

Importance

Though macro-economic factors played a part, this was the first instance of computer trading systems contributing to such a huge loss. Also, no one knows the exact cause despite the US stock market losing almost a quarter of its value in one day.

The Asian Financial Crisis (1997)

The Big Crash

The Thai government ended the baht's peg to its US dollar due to the speculative attacks to its currency. As a result, it caused the baht to halve in value and the Thai economy to come to a halt.

Most of Asia was affected as currencies buckled, stock markets crashed and asset price fell. The Thai stock market fell by 74 per cent, followed by Hong Kong's 23 per cent and South Korea's 7 per cent in a single day. Asian economies went into recession, causing global growth to slow down.

Local residents rushed to buy bags of government discounted rice with the little money they had in Jakarta, Indonesia, which was one of the countries hardest hit by the Asian Financial Crisis. (Photo courtesy of Flickr)

Recovery

The road to recovery was slow and painful despite help from the International Monetary Fund. It suffered more economic shocks along the way. But the economies in the region got back on track when they were boosted by a global boom.

Importance

Asian governments have learnt their lessons from the financial crisis and built up hefty reserves. Thus, it helps them to be better insulted from the current downturn.

The Dot.com Bust and 9/11 (2001)

The Big Crash

With the rise of internet in 1995, a completely new online market was created. Companies and investors greedily invested into it but their dreams were dissolved as newly listed start-ups folded quickly for having spent and borrowed more than what they could earn in time.

The US Nasdaq lost nearly 9 per cent within a week in March 2000. Furthermore, the terrorist attacks on 11 September 2001 caused The Dow to suffer its worst losses which weakened the economy even further.

Recovery

Western countries such as the United States and the European Union were worst hit. They went into recession. However, the market rebounded in 2003.

Importance

The crisis is the most recent example of what happens when a healthy stock market abruptly crashes when it is being pushed up by speculative activity.

SARS and Iraq War (2003)

The Big Crash

The world was badly hit by the Sars epidemic and the Iraq war. Asian economies were forced back into slower growth and recession fears, just when they were starting to recover from the financial crisis of the 1990s.

Recovery

After Sars was contained, many economies including Singapore and China embarked on an economic expansion which was fuelled by the long-delayed property booms, as well as growing demand in exports.

Importance

People remember the downturn as it is still fresh in their minds. Much has been experienced and learnt during the Sars period. As such, countries will be more prepared to combat future epidemics.

The Current Global Economic Crisis (2008)

The Big Crash

The US sub-prime mortgages became worthless when home owners defaulted on their loans. This caused the housing and property market to collapse, which wiped out Wall Street's revered investment banks. It pulled down companies, stock markets and economies around the world along with it.

On 29 September, the Dow posted its biggest loss in history by falling 777.68 points. As a result, more than US$1 trillion was lost in a single day in the US.

The powerful Group of Seven finance chiefs discussed ways to fight the global economic crisis and to restore confidence in the financial system. (Photo courtesy of Reuters)

Recovery

Countries around the world have come up with drastic measures to counter the financial crisis but recovery is nowhere in sight yet.

Importance

According to experts, this is the closest the world has come in rivalling the Great Depression. With the complex financial system still unwinding by the day, the crisis is nowhere near over. Countries have to stay united to combat it together.

The world has come a long way and has learnt its lessons from past stock market crashes of the century. I am confident it will pull through the current financial meltdown. Let us pray the crisis will end soon. Let us remain as optimistic as we possibly can. Let us stay united together!

So who makes up the American middle-class? You and me! Those of us who work our tails off, pay taxes, live paycheck to paycheck. We are of different cultures, faiths, religions, backgrounds, colors and beliefs. We are proud, patriotic parents, grandparents, sons, and daughters. We are hard-working Americans and the government doesn’t give a flip about us. We don’t get to benefit from our hard-earned money and our taxes, which support the over-burdened welfare system. We don’t get to benefit from government programs because we all make TOO MUCH MONEY, according to the laws.

At least that’s what I was told today when I tried to enroll my youngest in the pre-k program at the same public school my daughter attends. That’s right. I got a phone call from the school today saying that our son, “Does not qualify for our pre-k program because you make too much money.” I was stunned silent. I could feel the blood rushing to my face. I said, “What? Are you kidding me? That is blatant discrimination.” The lady replied by saying that it wasn’t the school’s policy, they were just following state policies that go along with the state-funded pre-k program. Because the State of Texas does not “require” pre-k, the programs were set up specifically for low-income children. (Later they added military children who did not previously qualify, and that’s alright with me.) But, what makes low-income children any more special than middle-class children? Are my tax dollars paying for these state-funded programs? This is a public school. A U.S. public school. A school district that I pay taxes into. A public school my child cannot attend, yet every illegal is more than welcome to take advantage of. I am so sick and tired of illegal aliens getting free medical care, free education, free everything and they don’t even have the decency to learn English. When is enough enough?

I am sick and tired of our government catering to everyone except those who work the hardest. I wouldn’t mind it so much of we were all treated equally, but why do I have to keep paying without enjoying any of the benefits of my hard-earned money. Middle-class America is slowly dying. The upper-class is too rich to notice. The lower-class is too fat on welfare, gets everything free and doesn't have to do a thing to earn it. (I’m not talking about everyone on welfare because I do know that there are many who really need it and use it the way it was designed to be used. I’m talking about those idiots who abuse the system and never get off it and keep manipulating it all their lives so they don’t have to work. LAZY FREELOADERS.)

This isn’t an issue of race, the only reason I bring up the issue of illegals is because I live in a border town. My area is a very poor community, one of the poorest in the nation, and it just so happens that a large number are illegal. So, no child left behind - my eye! I don’t mind keeping my child home another year. But it really broke my heart because my son was so excited about going to school. We do have the option of putting him in private school, but tuition is outrageous and I don’t want to pay for a pre-k program, and I shouldn‘t have to. If there is a program at a public school, then anyone in that district should be able to enroll, regardless of income.

I did speak to my son this evening and explained to him why he couldn’t go to school with his older sister on Monday (first day of school in August). I told him that Daddy made too much money and that pre-k was only for poor kids. He said, “But I am poor.” Oh, the precious mind of a 4-year-old. Well, his disappointment bothered me so much that I’m going to do something I never thought I would do - home school.

When I told my son that it will be just me and him, his eyes lit up. I told him that I will be his teacher and he got real excited, which surprised me. I told him that I will teach him letters, numbers, the alphabet. I will take him to the library and our own personal field trips. He was so happy he would not stop hugging and kissing me. His happiness melted my anger away. Yeah, I know, a blessing in disguise. Perhaps I was meant to school him - just this year. That’s okay with me. I would rather him be at home with me than with a bunch of kids who don’t speak English. And yes, I will teach him Spanish. After all, I am Hispanic too.

 It’s hard not to feel prejudice in a world full of discrimination. Especially when it’s middle-class America that keeps getting discriminated against. May we all R.I.P.

The reason for their inflated salaries lies in a fundamental concept of economics.  Basic economics states that people get paid in exchange for the services they provide their employers.   Having said that, another fundamental concept is the idea of service consumption and how it relates to salaries.  As an employee a company consumes your service.  Typically, only one company can consume your service at a time; therefore, only one income stream can be applied to that service per unit time.

Athletes and entertainers are different.  For them the service they provide is not consumed so much by their franchise or studio, but by sports fans and moviegoers.   Athletes provide a service which fans consume, not the franchise itself.  Movie stars provide a service that moviegoers consume, not so much the studio releasing the film.

The beauty of it is that the service can be consumed by more than one individual per unit time.  Think about it, a stadium of people watching A-Rod consumes his service at the same time, which means his service is available to thousands of people in unison.  Factor in television and you’ve got a service available to millions of people all at once.  The more consumers of your service per unit time means you have a greater source of income per unit time.  In other words, you can make millions of dollars while doing no more work than any other person.  The difference is the level of consumption of that service.

For famous people, the A-Rods and George Clooneys, the value added because of their expertise and fame only augments the fact that millions of people can consume their service at a single time.  For the average Joe, this is like having an MBA that a million companies are willing to pay for versus having an undergraduate degree consumed by millions of companies.  This explains the reason for the range of salaries in sports and entertainment.  Note, however, that even unknown relief pitchers command six-figure salaries due to the level of service consumption available to them.  The difference between them and Brandon Webb is expertise and command of the game.

That’s pretty much the reason behind it all.  It is not so much a case of skewed priorities in our society, but more an example of economics supporting the situation.  So next time somebody makes a comment about athletes’ salaries you can explain the economic underpinnings of it!

The internet isn't the only place people are unloading their belongings. Flea markets, consignment shops and pawnshops have also seen a boost in items being brought in for sale. For many people, this is not about down sizing but the need to pay for the necessities to live.

At the pump, the average national price of a gallon of regular gas is rising almost everyday. Gas prices are approximately 67 cents higher than a year ago, and are expected to continue rising through the summer months. Many Americans are choosing to sell their gas guzzling minivans and purchasing smaller, more fuel-efficient models.

U.S. food prices rose 4 percent in 2007, compared with an average 2.5 percent annual rise for the last 15 years, according to the U.S. Department of Agriculture. And the agency says 2008 could be worse, with a rise of as much as 4.5 percent. For some parents, that means adding an extra cup of water to their soup, watering down their children's milk, or giving their children pop/soda because it's less expensive than milk.

Steadily rising health care costs are consuming an ever-growing portion of American's household budgets. Many, under age 65 are in families that will spend at least 10 percent of their income on health costs in 2008. The main reason consumers are spending more on health care is because of rising health insurance premiums. Between 2000 and 2007, the average annual premium for job-based family health coverage paid for by employer and employee combined rose from $6,351 to $12,106, an increase of more than 90 percent. Despite decreases in generic prescription costs by large retailers, formulary and non-formulary co-pays continue to increase as well.

American's are looking for fast and easy ways to fill in the gaps the economy has created. Selling what we own, to make money to meet our basic needs is a last resort for some, but they only answer for many American's today.

Yet the amount of rice is not growing to meet the increasing population and demand for the plant. Limits to suitable land, drought and less predictable water management, together with the move towards growing plants for biofuels are all having a negative impact on the amount of rice being grown. Last year, the total amount of rice grown increased but not by so much as to meet increased demand, resulting in depleted stocks in warehouses. This year, the total amount of rice grown is scheduled to be less than last year. People, unsure of the future, inevitably think about hoarding what rice they can get and so go and buy whatever is available. This makes the situation worse and, although panic buying has not yet quite broken out, there is no guarantee that it will not do so in the future.

Already, governments in China, India, Egypt, Cambodia and Vietnam have imposed some form of export ban or similar measure. The government of Thailand, which is the world's largest rice exporter, is discussing means of preventing hoarding and is subsidizing the provision of lower-quality rice for poorer people. Rumours of a potential rice shortage are rife, although officially discounted out of hand. For those peasant farmers in northern provinces such as Chiang Mai, where fighting between neighbouring villages for access to water has already broken out, the idea of a rice shortage is a very frightening one. Even in a country developing as well and as rapidly as Thailand, the line between survival and disaster for the millions of subsistence farmers can be very narrow indeed. Every year, flooding causes many farmers and their families to lose everything they have and then there is a wave of suicides.

So far, there are no reports of rice riots in Asia, although the situation surrounding rice distribution by government agencies has been described as tense. However, if the projected 40% increase in rice prices (as well as other foodstuffs) does take place, then there will be many desperate people. The poorest will of course suffer the most. The proportion of their income spent on food is already very high and is set to get higher still. Money will have to be saved on education, health and transportation. Those poor, even if they can survive the crisis, will have no chance to escape from poverty.

Gross Domestic Product is about the value of goods and services of each year. A more exact definition of GDP is the market value of all final goods and services produced within a country in a given period of time (Mankiw, 2007). What that means is GDP is the nation's total income for that year or quarter. “GDP measures the value of all goods and services produced within the United States and is considered the best barometer of the country's economic fitness” (Business Week). This is because a higher income in a country will give its citizens a higher standard of living. Since we always want what is best for others, an increase in economic growth is important, so GDP therefore has to go up each year.

Over the past 20 years, Americans have enjoyed a steady level of economic growth and the past year is no different. Thanks to the help of the Bureau of Economic Analysis's website, I found that GDP has increased at an average rate of 2.98% over the past 20 years (BEA, 2007). The current average increase in GDP from 2006 to the first three quarters of 2007 is 0.2 percentage points higher at a grand total of 3.1%, the previous increase of 2006 being 2.9% (BEA, 2007). That 3.1% change is very good compared to the past twenty years. As shown by the graph below, the highest increase in GDP was 4.5% in 1999 and the lowest was -0.17% in 1991, so a 3.1% increase is actually pretty good (BEA, 2007). We are closer to the highest increase than the lowest increase. As shown by the graph below, there have been many different increases and decreases in GDP from 1987 to 2006 (BEA, 2007). For example, 2001 was the year that the Terrorists attacked the World Trade Center. Big things like that tend to affect GDP in different ways.

2007 has so far had some good actions taking place to increase GDP. An older article from July 22nd, 2007 on the New York Times webpage, entitled “Two Sides of Economic Growth” gives the credit for the economic growth of 2007 to businesses buying new inventory and increased consumer spending (NY Times). The businesses purchasing new inventory according to the article was because they were replacing the items they didn't replace from higher earlier sales this year (NY Times). Real personal consumption, which takes into consideration the negative effects of inflation, also increased during 2007 by an excellent rate of 4.2% according to the article (NY Times). My example in the previous paragraph of how 9/11 affected the economic growth of GDP in 2001 is from an economic standpoint similar to how the increased consumption and investment spending helped out 2007's growth in the article. People buying, replacing, and investing more isn't going to affect the U.S. economy's growth positively as much as a terrorist attack will affect it negatively, but due to the economic law of diminishing returns, the amount that Americans helped GDP is actually quite good. We aren't in a time of economic prosperity, but even the slightest above average GDP growth is a very good thing for any economy.

While above average GDP growth is a good thing, it's actually a bad thing to have a highly above average inflation rate. According to Mankiw's (2007) textbook, inflation is defined as an increase in the overall level of prices in the economy and the inflation rate is the percentage change in the price index from the preceding period (Mankiw, 2007). What that means is the amount of purchasing power goes down quicker when the inflation rate is rising more quickly every year. A controlled inflation rate is ok and actually good sometimes, but when it rises too quickly, like with a Hyperinflation rate of 20 to 30%, the economy can suffer because people can barely purchase as much as they want to with their savings or wages (Investopedia, 2007). And with the opposite happening, stagflation, going in the economy, it is most likely experiencing a time of no economic growth.

The inflation rate might be lower than average, but Business Week did have this to say, “Federal Reserve policymakers say the biggest danger to the economy is if inflation doesn't recede as they currently predict” (Business Week, 2007). The Fed watches inflation and changes interest rates around to get the highest amount of employment, stable prices, and a healthy amount of economic growth (Investopedia, 2007). Those interest rates help the government control the money supply. The U.S. Government has done very good with watching inflation over the past 20 years.

Over the past 20 years, Americans have had a steady inflation rate of about 3.1% (BLS, 2007). Our current inflation rate of the first ten months of 2007 being 2.5% is a good thing as it is 0.6 percentage points below the average (BLS, 2007). The lowest inflation rate we have had over the past twenty years was 1.6% in the years of 1998 and 2002 (BLS, 2007). The highest inflation rate we have had was 5.4% in 1990 (BLS, 2007). So our inflation rate of 2007 being closer to the lowest inflation rate in the past twenty years of inflation history shows America is taking the right steps to prevent inflation. The data collected above can be viewed in the following graph.

As I mentioned earlier, interest rates help the government control the money supply. Unfortunately, The Fed's recent cut of three quarters of a percentage point in September hasn't done much to the banking system (Wall Street). According to James Bianco, president of Bianco Research, “Even though the Fed has eased three-quarters of a percentage point since September, the market has only gotten 0.25% and 0.50% of that easing” (Wall Street). The article later goes to tell us that the rates on loans haven't dropped, credit card interest rates have dropped a good amount, and homeowners are getting some benefits if they have mortgages with less years on them (Wall Street)). While inflation might be less than average, it isn't a good sign to see that interest rates aren't dropping as fast as the Fed would like them to. If investment spenders are affected in a negative way to these defiant interest rates, economic growth could slow down dramatically and the unemployment rate would increase along with it.

The final topic of Macroeconomics is the unemployment rate. According the Mankiw's (2007) textbook of Macroeconomics, unemployment includes those who were not employed, were available for work, and had tried to find employment within the last four months (Mankiw, 2007). This does not include discouraged workers, but simply those who want to work, are looking for a job, and or are waiting to be recalled back to a previous employer after being laid off (Mankiw, 2007). Some unemployment is good, but any unemployment has long-term effects on the economy. America is currently not in a state of massive unemployment and in fact the economic data of the United States of unemployment for 2007 show that, similarly to GDP and inflation, we are running at a slightly higher rate than average.

Similar to the data for GDP and inflation, the data for unemployment shows that America's economy is just a little bit above average. The current rate of unemployment of the average of the past ten months of 2007 is 4.56% (BLS, 2007). The average rate of unemployment is 5.5% over the past twenty years (BLS, 2007). Therefore, the current rate of unemployment is below the average of the past 20 years by 1.18 percentage points (BLS, 2007). The lowest unemployment rate of the past twenty years was 4% in 2000 and the highest unemployment rate was 7.5% in 1992 (BLS, 2007). So we are actually much closer to the lowest unemployment rate than the highest. As shown with the graph below, unemployment goes up and down as time changes and different events affect the economy.

I currently believe that the American economy is doing slightly well. My old band teacher used to say, “To be average, scares the hell out of me”. Well, we're not average. We just aren't in the greatest time in history for rapid economic prosperity. Many economists think that the only reason we aren't in a recession right now is because the unemployment rate is so low (Economist, 2007). They're saying that with not many people building houses right now and the fact that defense spending has gone down, we should in fact be in a recession right now (Economist, 2007). I have come to the conclusion that these people are crazy and 2007 is going to be a good year for the economy. All three parts of Macroeconomic data show that we are just barely above average. “In both 1990 and 2001, Wall Street's seers were predicting modest growth when the economy, it turned out, was already contracting” (Economist, 2007). 2001 and 1990 were our two worst years of the past twenty for the economy as shown by the graphs above and they were the result of bigger events. 1990's poor economy was the result of the Gulf War, high interest rates, and poor economic planning by the government and 2001 was the result of the 9/11 terrorist attacks. Unless something awful happens within the next month, like Ben Bernanke being captured by Al-Qaida, I don't think 2007's economy could turn out badly.

To summarize, the current American economy of 2007 is running well. I believe that with all areas of Macroeconomics above average, we are doing well, and there is no reason for concern. While studying economics is always as fun as fifteen roller coasters combined, I am depressed to say that the economy is not doing anything particularly out of the ordinary. Everything is stable, but in economics that's usually a good thing. We're more likely to have something bad happen than to have a time of unpredicted economic prosperity. Everything is as it should be.

Canada’s Top 10 Export Countries

• United States 81.6% of total exports
• United Kingdom 2.8% of total exports
• Japan 2.1% of total exports
• China 1.7% of total exports
• Mexico 1.0% of total exports
• Germany 0.9% of total exports
• France 0.7% of total exports
• Netherlands 0.7% of total exports
• South Korea 0.7% of total exports
• Belgium 0.5% of total exports
• Top of Total 10 92.7% of total exports

Discovery and Purpose

The World Trade Organization came in to effect on January 1, 1995 is the new form of GATT (General Agreement on Tariffs and Trades) which was created in 1947 and continued to function for over 50 years. The WTO obviously is at the global level, deals with the rules of trade between global and international levels, and is responsible for negotiating and making new trade agreements. They help settle trade disputes. When countries have faced trade barriers, their government comes to the WTO fro negotiations.

They also provide technical assistance for developing countries. The main staffs consist of 625 people and the head of the organization is Pascal Lamy (Director-General). The export of merchandise grew over 6% annually. The WTO is the cause for over 97% of the world’s trade. The total amount of trade that happened due to the WTO was 22 times the amount that happened in 1950.

The WTO agreements are signed by most of the major trading partners of the world and others too. They have different rounds and negotiations. The WTO headquarters are in Geneva, Switzerland. Most of WTO`s work right now comes from the Uruguay round however the current negotiation and round is called the Doha round.

Current members of the WTO in Green

The second WTO meeting was in 1998 in Geneva, Switzerland. It has been promoting its ``Free Trade`` symbol. One of the differences between GATT and WTO was that GATT had mainly had experience and helped with just trade in goods but WTO and its negotiations deal with creations, designs, services and in trade inventions. As I already mentioned that, the WTO was created during the Uruguay round. The budget for 2006 was 175 million Swiss Francs and since 11 January 2007, the membership consists of 150 countries.

But WTO isn’t all about free trade and making negotiations, sometimes it helps and support maintain trade barriers for example to protect the environment or stop the spread of diseases.

The System

A good fact about WTO is that there is trade without racism, or favouritism. The organization has a system called MFN (Most Favoured Nation) which means in the WTO agreements a country cannot treat their other trading partners unfairly. For example, lower custom duty rates for one of their products they have to do that for all of the WTO members.

Some exceptions are that they can start a free trade agreement for a good within their country or a certain group to stop goods from outside their group or to help and offer tax cuts to developing countries only. Also with services, the members of WTO are given an exception if the services are under a certain limit. But these exception are under strict conditions such as to allow to do this a country must do something like open up a trade barrier of decrease a custom trade duty by a certain amount.

One of the main concerns of WTO is reducing and lowering trade barriers such as import bans, custom duties or importing in a restricted quantity. Since GATT, there have been eight rounds of trade negotiations and the ninth round, which is still going, is called the Doha round. The first few rounds were focused on reducing tariffs (custom duties) and by about 1994 on wards the taxes and duties on industrial goods have fallen to less than 4%.

By about the mid- 1980s, the rounds covered such as services and non-tariff barriers on goods. WTO allows countries to gradually open new markets and lets it develop new ideas. Most of the time developing countries are given longer periods of time to fulfill their obligations.

When WTO means “Free Trade Agreements”, it is not only free trade, the countries are allowed to put tariffs and taxes on their goods but in limited amounts. These rules are there to help maintain secure and fair-trade conditions.

More than three quarters of the WTO members are developing countries, which have a big impact on the organization and at the end of the Uruguay; round most of the obligations were still pending on the developing countries. However, the agreements did give them periods of time to slowly uplift the burden of the obligations. Very recently, many developed countries have started to allow duty-free and quota-free imports for almost all the products and goods but only for some of the least-developed countries.

The Uruguay Round

The Uruguay round lasted over seven and half years and that was actually twice the amount of time the round was supposed to last. The base of this round was made in November 1982 at a meeting for the ministers at Geneva, Switzerland. Even though the meeting was held to create a new major negotiation round but they wanted to extend this round to cover further agricultural trade so it was thought to be a complete failure.

Then four years later after a heap full of researching, observing, organizing and analyzing issues. The ministers decided to launch a new round. They did so in September 1986 at Punta del Este, Uruguay. This was the biggest global trade negotiation so the ministers gave up over four years to complete.

Then again, two years later in 1988 at Montreal, Canada the ministers had a meeting for an assessment of the round’s scheduled halfway point. In addition, it was held to make plans for the next two years of the remaining round but the talks did not come to a bottom line so they continued it in a quiet manner in Geneva the next April. Although the problems in the Montreal meeting the ministers did come up with some early results including assisting developing countries and market-access on tropical products as well as better trade dispute problem solutions.

Then the round was supposed to in December 1990 in Brussels but then they disagreed on their agricultural talks so they decided to extend their talks and the round so far.

The key dates in Uruguay round were:

• Sept 86- The Punta de Este launch
• Dec 88- Montreal Mid review
• Apr 89- The Geneva mid-term review complete
• Dec 90- The Brussels ``closing`` meeting ended in a lock
• Dec 91- In Geneva the draft of first act was completed
• Nov 92- In Washington, U.S. and Euro25 achieve goal on agriculture
• Jul 93- In Tokyo G7 achieve market access at G7 summit
• Dec 93- In Geneva, most negotiations achieved
• Apr 94- In Marrakesh, Morocco agreements signed
• Jan 95- In Geneva, WTO was created and more agreements were created

This was biggest round that was ever completed and a very important one because WTO was formed this round and most of the work that WTO has today is because of the Uruguay round.

This round was so beneficial to making trade easier around the globe because it covered almost all trade, toothbrushes to boats to telecommunications. It covered almost everything from a pin to a plane. It was the largest trade negotiation and will probably remain the largest trade negation ever to be in global trade history.

The Uruguay round has early results in success. In only the first two years countries had agreed on a package of cuts on import duties for the tropical products. This round also made new rules to resolve trade disputes.

Agriculture and Fairer Markets for Farmers

When the old and original GATT started to cover the area of agricultural trade, it continued but it contained many loopholes. Some examples were that GATT allowed countries to use not loopholes relating to tariffs but things like import quotas and to decrease or limit the amount of products or goods imported. Due to these loopholes, agriculture trade became very hard and mostly left alone with with export limits on agricultural trade, which was not used on industrial trade.

However, all hope was certainly not lost. The Uruguay round bring an agreement had a commitment to reform other negotiations on agricultural trade. These negotiations were launched in 2000 because the Agricultural Agreement required it.

The agriculture agreement is to make agricultural trade easier and overall better. This agreement would make the predictability of this area much easier and would improve security for importing and exporting. Predictability is very important in an area because it improves security for the business and more companies would invest in a stable area rather than an area, which is unpredictable, and you never know what is going to happen. Therefore, if you know the future of a company you would rather invest in that and that area would grow financially and globally.

Some of the new rules and commitments apply to trade restrictions that involve imports, raising or guaranteeing prices to farmers, and other ways to make exporting agricultural goods artificially competitive. Some exceptions are that developing countries do not have to lower their taxes or limits as much as other developed countries and are given extra time to complete their obligations. Least-Developed countries do not have to apply to these rules at all. The rules also bend for countries that completely or major rely on their either food imports or food exports.

Criticism

The WTO has been mainly criticized for reducing tax or tariff protections for farmers, which is a major source of income for many of the developing countries, and on the other side, the WTO is allowing rich countries to pay their farmers a huge amount of money, which the developing countries unfortunately cannot afford.

Actually, there has been a massive “Our World is Not for Sale, Stop Corporate Globalization” protest against the WTO in Hong Kong in December 2005. Some of the causes to this were events like the WTO calling the protection of sea turtles and dolphins a trade barrier and calling U.S. clean air laws a barrier too.

In November 1999, more than 50,000 protesters traveled to Seattle to challenge this global corporate meeting. They demanded a more environmentally friendly, democratic and socially suitable global economy. These protests were successful and stopped the global expansion of WTO. Then in the summer of 2004 of the most powerful, influential and rich countries in the world came together and gave false assurances that the area of agriculture would be concentrated on focused. They would clear out the problems revolving around agriculture to keep the negotiations of agriculture back on track.

Then in November 2005, the agricultural negotiations came back on track including agricultural, services and better market access for industrial goods and natural resources.

Conclusion

My conclusion is that I really enjoyed writing this project because I was interested in learning about world trade and not just one country’s trade. I learned a lot by completing this project. I learned the pros and cons of the World Trade Organization.

By learning about the WTO, I did not only learn about global trade but it helped me understand global economics better and the part of business in trade. This project made me realise the importance of trade and hat role it plays in our daily life. I realised how important trade is to us and to a country that completely depends on its imports and exports.