Liberal international economic order
In international relations, the liberal international economic order (LIEO) is the global free trade establishment. Critics sometimes refer to LIEO as the Washington Consensus, which implies that this system works mostly in the favor of the United States at the expense of smaller countries.
LIEO is said to be shaped by supranational institutions. The World Trade Organization, for example, creates and implements free trade agreements, while the World Bank issues structural adjustment loans to Third World governments that include conditions ranging from opening up their markets to Western businesses to privatizing public utilities.
Among the firmest underlying assumptions of free market thinking is that as regulations are removed, global trade becomes more efficient and peoples' needs are better met, allegedly resulting in less poverty, and consequently, stability and peace.
Critics point to rampant abuses of laborers and citizens in the Third World by multinational corporations, as well as the negative effects on public health caused by privatizing public utilities. Another criticism can be the dumping of metals and other wastes into the environment of such nations by corporations. This often effects local environmental heatlh and peoples, most often by industrial facilities such as factories.
Third World countries are particularly incensed by the continuing existence of tariffs on United States and European agricultural products, which they claim run counter to the spirit of free trade and prevent them from taking full advantage of the global marketplace.
- Structure of the Liberal International Economic Order
- The Case of Texaco in Ecuador—an example of what can happen when multinational corporations visit countries with governments unwilling (or unable) to regulate them.