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World Trade Problems and Their Resolutions - Coggle Diagram
World Trade Problems and Their Resolutions
Main Idea 1: Free trade and sanctions can exist side by side
G20 aims to promote free trade but also discusses sanctions.
Sanctions are used as political tools to express disapproval (e.g., Russia in Crimea).
Trade and politics interact in complex ways.
Main Idea 2: International trade rules were built to avoid economic chaos
GATT was created after WWII to prevent protectionist policies like those in the 1930s.
The goal was to maintain global economic stability.
WTO was established in 1995 to formalize dispute resolution.
By then, nations already valued freer trade.
Main Idea 3: Trade sanctions often have limited effectiveness
Sanctions can pressure countries, but results vary.
South Africa changed partly because of trade pressure.
Many sanctions fail to change targeted nations.
Iran resisted US sanctions for decades.
Sanctions can hurt civilians more than elites.
Main Idea 4: Protectionism usually leads to retaliation and disputes
Sudden protective laws provoke international response.
Retaliatory sanctions are common.
WTO often intervenes when disputes arise.
Local-content rules and quotas often lead to complaints.
Main Idea 5: Negotiation through WTO works better than confrontation
Most disputes are resolved through mediation and compromise.
WTO acts as an impartial mediator.
Example: Japan–US voluntary export restraints.
Negotiation avoided escalation.
Main Idea 6: WTO plays a key but limited role
WTO helps keep trade stable.
It provides rules and adjudication.
WTO cannot fully control powerful nations.
Some countries ignore rules, but the system still maintains general order.