2. Look through the text again and pick out the key words and expressions

III. Post-Reading Tasks

1. Discussion.

1. Explain the following statement from the article: "If the IMF is to be less of a fireman, it must become more of a policeman".

2. Do you agree that the report fails to provide a new vision of an international financial architecture? Why do you think the authors call this vision shortsighted?

3. Comment on the following statements:

a) there can be less crisis lending only if there is more crisis prevention

b) the role of IMF lending needs reassessment in a world where private capital markets play an increasing role

c) good macroeconomic policy is crucial to development, and the IMF is arguably more competent in this regard than the World Bank

d) There is little agreement on how much the IMF should lend, for how long and on what terms.

2. Simulations

a) In groups make a list of reasons for IMF criticism. Compare and discuss your lists with your group mates.

b) Hold a round table on the problem of reassessment of IMF activities and prospective reforms.

3. Make a summary of the text

Unit 2 nafta

I. Pre-Reading Task

1. What does NAFTA stand for?

2. What are its members?

3. What year was it enacted?

4. What are the major provisions of NAFTA?

II. Reading Task

1. Read the text to find out the answers to the following questions

1. Outline the main links between the member countries mentioned in the article.

2. How is the NAFTA countries economic interdependence illustrated in the article?

3. What are the possible risks of the close economic interaction?

Is there a connection between the economic relationships proliferation and political ties?

Nafta — Toward the Continental "We"

by J.Faux

We can start again, but we cannot start over. NAFTA has permanently merged the economic geography of the United States, Canada and Mexico. Our domestic economy now stretches not just from the Atlantic to the Pacific, but from the Arctic to Chiapas.

Despite U.S. homeland security policies, anti-immigrant sentiment in border states and bursts of nationalism in Mexico and Canada, the “toothpaste” of NAFTA cannot be put back into the tube.

Bankers and brokers now deal with each other in a seamless web of finance. Car makers and food packagers are dependent on supplies and markets in all three countries. And the movement of people back and forth across the borders cannot be stopped.

Cultures are mixing — and new common rules will be needed. Like it or not, we are building a continental society.

A political nightmare

The North American common market now contains more than 430 million people, with an annual GDP of close to $20 trillion. In 2003, Canada was the world’s eleventh largest economy, and Mexico was number twelve.

When the U.S. political and business elite is finally forced to come up with a strategy for the country to work its way out of the debt trap, it will find itself hung by its own petard.

Twenty-five to 30% of the entire production of Canada and Mexico is now dependent on sales to the U.S. market.

The elimination or even substantial reduction of the U.S. trade deficit could thus do them substantial damage, as well as disrupt U.S. businesses with cross-border production and marketing.

It could plunge Mexico into an explosive social crisis, which, given the level of social and economic integration, would be a political nightmare.

Working together

Both Canada and Mexico, weaned from their traditional policies of economic independence, now depend on the U.S. market for growth, with 85 to 90% of Canadian and Mexican exports now going to the United States.

Between 1994 and 2001, U.S. investors supplied 58% and 46%, respectively, of the foreign direct investment into Canada and Mexico. The process has gone way beyond trade and investment relations.

Every day, more intra-continental connections in finance, marketing, production and other business networks are being hardwired for a seamless North American market.

Increasingly, the national economies are not simply selling each other goods and services, but producing together.

Assembly line

A large share of U.S. trade with Canada and Mexico occurs within the same or an affiliated firm. The auto industry, which makes up some 25% of U.S.-Canadian trade, is the most dramatic example.

Ford pick-up trucks are now assembled in Mexico’s Cuautitlán, with engines coming from Canada’s Windsor, Ontario, and transmissions made in America’s Livonia, Michigan.

A car made in North America may, in its separate pieces, cross the borders dozens of times before it is finally sold.