THE IMPACT OF INTERNATIONAL TRADE

Changes in Communication∙ Before cell phones and the Internet, governments could control their country’s

access to information, now the control is more in the hands of the people (democracy of information)

∙ This has created a feeling of a smaller world, global village∙ Increased the importance of the knowledge economy

∙ “The World is Flat”∙ It has also created an “on-demand” where people expect to find solutions to

problems immediately∙ Call centers for customer complaints go 24 hours∙ On-line banking is 24 hours∙ Computers can share information around the world in an instant

Changes in Transportation◻ Improvements in transportation allow goods to be rapidly distributed (e.g.

food)⬜ Containerization: the invention of a standard size for container shipping

allows a product to be packed, loaded onto a ship, then transferred onto a train or transport truck with limited disruption

⬜ Hidden costs: goods may be cheaper to ship, but there has been an increased cost to our environment; 1/5 of global carbon emissions comes from the transportation of goods■ Solution: “buy local, buy fresh”

■ Provides jobs to Canadians■ Promotes good health ■ Helps the environment

Hellmans -

United Nations Global Compact∙ TNC: Some TNC’s are richer and more powerful than some nations

o In 2002, 200 top corporations have 1/3 of the world’s economic activityo Many of the wealthiest TNC have their headquarters in more developed

countries ∙ 1999: creation of the Global Compact

o requires TNC to abolish child labor and reduce greenhouse gas emissionso pressures TNCs to consider working conditions and sustainable development

▪ concern: no enforcement▪ less than 1% of the companies who agree to this are American▪ increases costs = less competitive

Trade liberalization◻ The increasing emphasis on promoting free

trade⬜ NAFTA

◻ Does free trade really create a level playing field?⬜ (Luckiest Nut)

◻ What is the World Bank’s attitude towards free trade?

◻ What are the pros and cons to Free Trade?

◻ What is the difference between free trade and fair trade?

Foreign Investment◻ Pros and cons to foreign investment

Pros Cons-Encourages the advancement of economic development- Creates positive relationships between the countries-Shares R & D between countries

-Profits are taken out of the country and sent back to headquarters- During times of economic stress, those industries dependant on foreign investment are at a greater risk

Power of transnational corporations

◻ General Motors has more money than Thailand, Norway, Saudi Arabia, South Africa, Greece…

◻ These may be old statistics, but they make a good point

GDP(*not per capita)

Population

◻ http://slaveryfootprint.org/