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globalization.pptx
Globalization
The trend toward great interconnectedness of the world’s financial, economic, technological, political, cultural, sociological, ecological, and geographical systems.
Bretton Woods in 1944 where 44 nations attended a conference to stabilize world currencies, and establish credit for international trade.
Paved way for a close-knit global economy and global financial system (World Bank, IMF, and WTO)
Trade Organizations
Trade organizations
Groups established to help with the free flow of goods and services. They may be global in scope or national organizations created by individual governments to help domestic companies expand into international markets.
Trade Organizations
World Trade Organization (WTO)
An international organization established in 1995 (which now has over 150 member countries) that promotes trade liberalization throughout the world.
The main purposes of the WTO are:
To act as a forum for negotiations
To provide a set of rules that have been negotiated and signed by the governments of member countries
To offer a forum for dispute settlement
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Trade Organizations
The World Bank
An organization with 186 member countries that provides monetary and technical support for developing countries.
Provides loans and grants to assist with education, health, infrastructure, farming, environmental issues, resource management, and other economic concerns.
Helps poor countries move beyond conflict
Provides loans and grants to poor countries with issues
Helps these countries get proper infrastructure
Canada and other countries donate to the WB
Some say many countries suffered because of the rules it makes for taking loans
They take advantage of the countries they loan to, so that when they’re working well, they’ll be advantageous to the countries in the WB
Trade Organizations
International Monetary Fund (IMF)
An organization that tracks economic trends, analyzes countries’ financial performances, warns governments of potential financial problems provides expertise to governments, and provides a forum for discussion
Purpose of IMF:
promote financial stability, prevent and solve economic crises, encourage growth, and assuage poverty.
Encouraging countries to adopt responsible economic policies
Lending money to emerging and developing countries
Providing technical training in areas such as banking regulations and exchange rate policies
Economically
Cross –border movement of goods, services, technology and capital
Process of increasing economic integration
Emergence of global marketplace
Viewed as either positive or negative depending on your paradigm
Current trends leads to developed economies integrating with developed or undeveloped economies
Direct foreign investment, reduction in trade barriers, and immigration
Culturally
Transmission of ideas, meanings, and values around the world to extend and intensify social relations
Tied together with the added process of commodity exchange
Increased cross-cultural contacts, however is leading to the loss of uniqueness of isolated communities
Think about the different foods that can be found in north America, Europe and East Asia
How does McDonalds combat the different cultures in markets they enter with their own culture?
Think about Muslim countries
Think about certain butchering practices in certain cultures
Politically
Creation of international trade agreements and economic unions
NAFTA, EU, ASEAN are some examples where countries part of the intergovernmental organizations benefit from trading goods/services, technology, culture.
But with every benefit, there is a drawback.
Jobs, price, infant industries, etc.
Association of Southeast Asian Nations
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The European Union
A trade agreement signed in 1993 that now encompasses twenty-seven countries in Europe
It has its own flag, anthem, and currency
Formed to remove many obstacles between movement through small EU countries
The agreement eliminates protectionism and allows all governments to purchase goods from each other
Purpose is to promote:
Peace
Economic growth
Government co-operation
Strong bonds between people
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NAFTA
North America Free Trade Agreement
When the US and Canada originally signed a trade agreement, American jobs in the automobile industry, and others, moved north of the border
When Mexico joined, the jobs that once left the US to Canada, now left Canada an went to Mexico
Reason why is because labour is cheaper
Also companies where given more power and able to sue or take to court national provincial/state governments
Trade Agreements
Advantages of NAFTA
Has helped create higher paying jobs in education, engineering, and banking sectors in Canada
Allows freer flow of goods and services across North America, providing better access to raw materials, talent, capital, and technology
Trade has tripled between the three members since NAFTA’s inception
Disadvantages of NAFTA
Manufacturing jobs have been lost to Mexico, where labour costs are lower
Without tariffs, many Mexican farmers could not compete and lost their livelihoods
Canadian companies sold to foreign investors
Globalization and International Trade
Positive effects of
globalization
Outsourcing
Lower prices
Improved human rights
Increased productivity
Innovation
Better jobs
Increased capital flow
Negative effects of
globalization
Lost Canadian jobs
Fear of job loss
Loss of Canadian productivity
Exploitation of cheap labour
Increased pollution
Unhealthy products
Spread of disease
Increase in the income gap
Influence of multinational corporations (MNCs) on governments
