Globalization

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GLOBALIZATION
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What is Globalization?????
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Globalization is.

• Goods and services exchanged through trade across
  national boundaries, creating a global market.

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Mercantilism

• Closed Door policy where countries used
  colonies as sources for natural resources
• Only the mother country could trade with the
  colonies
• Strict governmental regulation aimed at creating
  foreign trading monopolies
• The opposite of globalization
• Ended following WWII

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COLONIES
Great Britain France Spain Portugal Germany Japa
n Denmark Norway USA Italy
1920
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Historical Global Trade Patterns

• Silk Road Trade Route -Ancient trade route
  connecting China to the Mediterranean World.
  This sparked European interests in finding sea
  routes to China
• Columbian Exchange trade of plants, animals,
  and people between the old world and the new

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The Silk Road
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Negatively, they introduced diseases and
pandemics that killed most of the native
population
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Lets Trade

• Countries have typically wanted to trade with
  China because of its abundance of natural
  resources and its enormous labor force
  (population). Labor is very cheap in China
• Singapore and Panama are geographically situated
  in perfect areas for trade

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Singapore connects Pacific and Indian Oceans
Panama Connects Pacific and Atlantic Oceans
So its easier to get to China!
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Panama
Singapore
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Uneven Distribution of Natural Resources in the
World
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Uneven Distribution of Money in the World
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Uneven Distribution of Workers in the World
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Regional Specialization in Trade

• Country A makes cell phones better
• Because they have more capital ()
• Country B makes jeans better
• Because they have more labor (workers)
• Specialize
• and trade

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FREE TRADE

• An open door to tradeall nations are free to
  trade with each other
• A policy that allows businesses to trade across
  national boundaries without interference from the
  respective governments
• Free trade because the governments do not levy
  tariffs (taxes) or subsidies (to bring in) on
  imported goods

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Commercial Expansion

• The expansion of commercial industry looking for
  new markets
• Example-there is no room for any more starbucks
  in America so in order for the company to grow
  they must open stores in Europe
• a major driving force for globalization

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Integration of Economies

• The increasing reliance of economies on each
  other
• The opportunities to be able to buy and sell in
  any country in the world
• The opportunities for labor and capital to locate
  anywhere in the world
• The growth of global markets in finance

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FREE TRADE AGREEMENTS

• NAFTA- North American Free Trade Agreement
• ASEAN- Association of South East Asian Nations
• EU-European Union

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Free Trade Organizations
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NAFTA

• On January 1, 1994, the North American Free Trade
  Agreement between the United States, Canada, and
  Mexico (NAFTA) entered into force.
• Created the worlds largest free trade area
• Mexico and Canada are now the top buyers of
  American products
• Canada and Mexico are the 2nd and 3rd largest
  suppliers to the United States

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ASEAN

• Formed on 8 August 1967
• Includes Indonesia, Malaysia, the Philippines,
  Singapore and Thailand Brunei, Burma (Myanmar),
  Cambodia, Laos, and Vietnam
• The motivations for the birth of ASEAN were so
  that its members governing elite could
  concentrate on nation building
• formed to prevent Indonesia from becoming a
  hegemony

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EUROPEAN UNION

• The EU was created in the aftermath of the second
  world war. The first steps were to foster
  economic cooperation
• countries that trade with one another are
  economically interdependent and will thus avoid
  conflict

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• the union has developed into a huge single market
  with the euro as its common currency.
• The E.U. has delivered over 50 years of peace,
  stability, and prosperity, helped raise living
  standards, and is building a single Europe-wide
  market in which people, goods, services, and
  capital move among Member States as freely as
  within one country.

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The European Union
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World Trade Flows
NAFTA
EU
ASEAN
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Cause and Effect

• Uneven distribution of resources
• Natural resources, capital and labor
• Leads to regional specialization
• Increased regional trade
• Increased regional trade causes more world trade
• Globalization

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Once trade is free we have
OUTSOURCING!

• Contracting jobs abroad to save money
• Using foreign labor for jobs that were once done
  domestically (AT HOME)
• Example- call centers in India, Adidas made in
  China not Germany

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Globalization in World Trade
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Globalization in World Trade
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Globalization in World Trade
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Cause and Effect

• Better transportation technology causes
• Faster cheaper ways to ship goods around the
  world
• Therefore more trade
• And therefore more , or more , or more
  , or more

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Is Globalization a good thing

• Benefits of Trade
• Increased choice
• Greater potential for growth
• Increase international economies of scale
• Greater employment opportunities
• More in economy

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or a bad thing

• Disadvantages of trade
• Increase in gap between the rich and the poor
• Dominance of global trade by the rich, northern
  hemisphere countries
• Lack of opportunities for the poor to be able to
  have access to markets
• Exploitation of workers and growers

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Cultural Problems with Globalization

• Stronger cultures sometimes overwhelm weaker
  local cultures
• Cultural Imperialism

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How other cultures see American culture
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What is Globalization?????