Title: Globalization
1GLOBALIZATION
2What is Globalization?????
3Globalization is.
- Goods and services exchanged through trade across
national boundaries, creating a global market.
4Mercantilism
- 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
5COLONIES
Great Britain France Spain Portugal Germany Japa
n Denmark Norway USA Italy
1920
6Historical 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
7The Silk Road
8Negatively, they introduced diseases and
pandemics that killed most of the native
population
9Lets 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
10Singapore connects Pacific and Indian Oceans
Panama Connects Pacific and Atlantic Oceans
So its easier to get to China!
11Panama
Singapore
12Uneven Distribution of Natural Resources in the
World
13Uneven Distribution of Money in the World
14Uneven Distribution of Workers in the World
15Regional 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
16FREE 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
17Commercial 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
18Integration 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
19FREE TRADE AGREEMENTS
- NAFTA- North American Free Trade Agreement
- ASEAN- Association of South East Asian Nations
- EU-European Union
20Free Trade Organizations
21NAFTA
- 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
22ASEAN
- 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
23EUROPEAN 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
24- 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.
25The European Union
26World Trade Flows
NAFTA
EU
ASEAN
27Cause 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
28Once 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
29Globalization in World Trade
30Globalization in World Trade
31Globalization in World Trade
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33Cause 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
34Is Globalization a good thing
- Benefits of Trade
- Increased choice
- Greater potential for growth
- Increase international economies of scale
- Greater employment opportunities
- More in economy
35or 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
36Cultural Problems with Globalization
- Stronger cultures sometimes overwhelm weaker
local cultures - Cultural Imperialism
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38How other cultures see American culture
39What is Globalization?????