Globalization

Expanding Globalization

WHAT DO YOU BELIEVE IS MEANT BY EXPANDING GLOBALIZATION?

WHAT CAN BE A FACTOR TO EXPANDING GLOBALIZATION?

How Do International Agreements And Organizations

Contribute To Expanding Globalization?

>A factor of expanding globalization is reducing trade barriers so that goods and services can move around the world easily. This is called Trade LiberalizationTrade Liberalization.

>In order for liberalization to take place these things must be removed:• Tariffs• Quotas• Regulations

>When two countries agree to eliminate all tariffs and taxes on goods and services traded between them, the result is called Free TradeFree Trade.

>Creates jobs, uses resources, and reduces the cost of consumer goods.

Name the widely known, and one of the earliest developed Free Trade agreements?

*hint: movie

The World Trade Organization

» The WTO was established in 1995 to increase international trade by lowering trade barriers

» Decisions are made by coming to a ConsensusConsensus - a general agreement - which all the members support.

» The WTO: » Ensures that the terms of trade agreements

are followed» Settles trade disputes between governments» Conducts trade negotiations.

WHAT DO YOU THINK THE WTO USED TO ENFORCE DECISIONS?

*hint: economic actions

Sanctions» WTO has the power to enforce

Sanctions Sanctions - economic actions such as trade boycott - to enforce decisions

» WTO used this power to resolve disputes in trade between nations

Example of Dispute in the WTO

» 2002 Canada asked the WTO to rule on a longstanding dispute with the US over softwood lumber.

» 2006 WTO finally ruled in Canada’s favor, removing American tariffs on Canadian lumber and required the U.S to repay almost 80% of the more than 5 billion it had collected in tariffs on lumber imports from Canada

WHAT DO YOU BELIEVE ARE REASONS THAT PEOPLE OPPOSED THE WTO?

Opposing the WTO» There are many that oppose the trade

liberalization that fosters globalization, targeting the WTO.

» Their point: » The WTO has too much powerThe WTO has too much power. It can force countries to

change their regulations to make them fit into WTO rules» The WTO is not democratically accountableThe WTO is not democratically accountable. . Hearings

on trade disputes are closed to the public and the media» The WTO does not care enough about the problems The WTO does not care enough about the problems

of developing countries.of developing countries. It has not forced rich countries to fully open their markets to products from developing countries.

» The WTO has not done enough about the The WTO has not done enough about the environment, child labor, worker’s rights, or health environment, child labor, worker’s rights, or health carecare

WHAT DO YOU BELIEVE ARE REASONS PEOPLE SUPPORTED THE WTO?

Supporting the WTO» People that supported the

WTO said that the WTO had managed to raise – and would continue to raise- living standards around the world, providing numerous opportunities for ultimately everyone.

WHAT IS ONE OF THE BIGGEST FREE TRADE AGREEMENTS THAT CANADA IS PART OF RIGHT NOW?

*hint: Most recent member is Mexico

North American Free Trade Agreement

» Went into effect 1998» Expanded to include Mexico in 1994» Eliminated all trade barriers

between these three countries» Different opinions arose because

this was the first free trade agreement between countries with such different levels of development

WHAT GROUPS DO YOU SUPPOSE SUPPORTED NAFTA?

WHAT GROUP WERE LIKELEY TO OPPOSE IT?

WHY?

Changes in Economics NAFTA

» Canadian exports to Mexico increased fourfold (1993-2005)

» Canadian exports to U.S rose $359 billion in 200 from $183 billion in 1994

» Canadian investment in the U.S tripled» Canadian investment in Mexico rose

200 percent » Since NAFTA came into effect, the

Canadian Economy has grown an average of 3.4 a year and 2.5 million new jobs have been created.

Poll on Public Opinion on weather they had Won or Lost

as a result of NAFTA

There were definitely positives and negatives for

each country involved in NAFTA

NAFTA Supporters NAFTA OpponentsSupporters believed that NAFTA

Opponents believed that NAFTA

• would create thousands of high paying jobs

• would cause thousands of jobs to leave Canada and the U.S. for Mexico

• would raise living standards in Canada, Mexico, and the U.S.

• would create a “race to the bottom” for wages in all three countries

• would improve environmental and employment standards

• would undermine health, environmental, and safety standards

• would transform Mexico from a developing country to developed country

• would undermine the ability of member states to make their own decisions

Many believed that Mexico was the most negatively affected country from NAFTA. Why do you think that is?

How was Canada negatively affected?

The European Union» Created a liberalized trading area in

Europe» Came into effect in 1991 after more

than 40 years of negotiation» EU enables members to take

advantage of the opportunities created by economic globalization while protecting them from certain aspects of globalization (pressure to reduce spending on social programs)

» Also serves as a parliament

WHICH OF THE TWO TRADE AGREEMENTS DO YOU THINK HAS A GREATER GDP? POPULATION?

The European Union and NAFTA (2006)

Category European Union NAFTAArea 4 324 782 sp. km 21 5888 638 sq.

kmPopulation 486 642 000 438 993 672Member 27 3GDP $12.82

trillion(U.S)$15.279 trillion(U.S)

GDP per Person $29 400 (U.S) $34 8-5 (U.S)