Transcript Globalization - Frontenac Secondary School

Globalization
Trade Agreements
&
Organizations
Yesterday’s learning goals…
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Rationalization
Competitive Advantage
Absolute Advantage
Opportunity Cost
Comparitive Advantage
Our learning goals for today…
• Globalization
• Trade Agreements
• Trade Organizations
• Over the past century, the power, size,
and reach of corporations have grown
enormously.
• These companies conduct business on an
international scale.
• Globalization is the process whereby
national economies and cultures have
become integrated.
Global integration through..
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New global communication technologies
foreign investment
international trade
migration
new forms of transportation
the flow of money
Globalization
• Is the movement of goods, services,
technology, investment, ideas, and people
throughout the world.
Advantages
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Outsourcing
Lower prices
Improved human rights
Increased productivity
Innovation
Better jobs
Increased capital flow
Disadvantages
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Lost Canadian Jobs
Loss of Canadian productivity
Exploitation of cheap labour
Increased pollution
Unhealthy products
Spread of disease
Increase in the income gap
Influence of MNC on governments.
Globalization: Trade Agreements
• Trade agreements are written
‘agreements’ between nations establishing
terms of trade, eliminating trade barriers,
and encouraging foreign investment.
Trade Agreements
• NAFTA
• European Union
NAFTA
• North American Free
Trade Agreement
• Sets rules
surrounding the
movement of goods,
services, and
investments across
North America.
• Which countries does
that include?
Advantages of NAFTA
• Eliminates tariffs and other trade barriers.
• Protects copyright and patents.
• Promotes competition between participating
countries.
• Access to raw materials, talent, technology
across all of North America, not just in their own
country.
• Since NAFTA’s inception, trade has triple
between the three partnerst.
• (Approx. $300 billion to over $900 billion)
Disadvantages of Nafta
• Labour costs are lower in Mexico, so a lot
of manufacturing jobs have moved to
Mexico.
• With tariffs on corn and soya beans being
lifted, it is too hard for Mexican farmers to
compete with the U.S.
Tariff: $2 ??
• Price of Corn in Mexico: $5
• Price of Corn imported from U.S.A.: $4
European Union
• Imagine arranging a
shipment of goods
from Windsor to
Montreal.
– Take the 401; No big
deal.
• How about travelling the same distance in
Europe?
– You travel through Hungary, Slovakia, Czech
Republic, Germany, and the Netherlands.
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Four Border Crossings! (duties & tariffs at each!)
Five different languages!
Five sets of transportation documents!
Five different currencies!
European Union
• The formation of the European Union has
removed most of these obstacles!!
European Union Countries
• There are 27 member states of the
European Union.
• It is a trade agreement including almost
half a billion people.
• It has its own flag
Purpose
• The purpose of the EU is promote
economic growth, peace, government cooperation, and ensure that its population
can prosper.
The Euro
• One of the major accomplishments of the
EU is its implementation of a common
currency – the Euro.
Canada & The European Union
• The EU is Canada’s second largest export
trading partner after the U.S.
• Lately, in the news, the European Union
was voting on whether or not to accept oil
from Canada’s oil sands. (They were
voting on whether it was too ‘dirty’ a
supply of oil or not.)
Trade Organizations
• Agreements are treaties between nations.
• Trade Organizations are groups of nations
helping to liberalize trade (make it easier).
WTO
• World Trade Organization
• 153 countries
– negotiates trade agreements
– has a set of rules
– settles disputes
– is extremely important for Canada as we have
a relatively small economy and without it, our
voice on the international stage could be lost.
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APEC
Asia Pacific Co-operation
21 member countries
54% of the world’s GDP
Decreases tariffs and trade barriers
between countries in the APEC.
OPEC
Organization of Petroleum Exporting Countries (1960)
G8
• ‘Group of Eight’
• France, U.S., Britain, Italy, Germany,
Japan, EU, Canada, and Russia
• The major economies of the world.
G20
• Group of Twenty
• Reflects the changing times and influence
of other countries.
• Includes Brazil, India, China
• These 20 countries encompass 90% of the
world’s economic activity.
World Bank
• 186 member countries
• provides monetary and technical support
for developing countries
• provides loans and grants to poor
countries to assist with education, health,
farming, the environment, and other
economic concerns
– There are criticisms as well:
• They put stipulations on loans, change economies,
and pressure governments and producers.
International Monetary Fund
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186 countries
promotes financial stability
lends money
provides expertise to governments
warns governments of potential financial
problems.
Activity
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Create a world map (with a legend) that shows the countries in:
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The EU
G8
G20
* Some countries will be in all three, so you will need a legend
showing:
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EU
G8
G20
EU & G8
EU & G20
EU & G8 & G20
Also, label each country with its two digit country code.
eg. Canada = CA
http://www.uspto.gov/patft/help/helpctry.htm
Review
Our test (open book & open computer) will cover:
Trade Balance
The WTO
Corporations
Codes of Ethics
CSR
SRI
Ethical Imperialism & Cultural Relativism
Stocks and ROI
NGOs and Micro Credit
Capitalism, Communism, & the Mixed Economy
Rationalization, Competitive/Absolute/Comparitive Advantage