8.
6 Globalization
Essential Questions:
How
are the interests of free trade and protectionism resolved in the global economy? What impact do trade surpluses and deficits have on the national and the international economies? What effect do the limited labor and environmental regulations of foreign countries have on the economy of the United States?
Global Interdependence
Globalization Foreign Comparative
trade Unfavorable Balance of Trade Favorable Balance of Trade Multinational conglomerate
advantage Exchange rate Treaty Child labor Human rights
Globalization
is the increasing interconnection of people and places as a result of advances in transport, communication, and information technologies that causes political, economic, and cultural cooperation. Economic globalization has had an impact on the worldwide integration of different cultures.
Globalization
Foreign Trade
International
trade is the exchange of goods and services across international boundaries or territories. In most countries, it represents a significant share of GDP. Industrialization, globalization, multinational corporations, and outsourcing are all having a major impact. Increasing international trade is basic to globalization.
Balance
of trade refers to the amount a country imports compared with the amount it exports. A favorable (positive) balance of trade is known as a trade surplus and consists of exporting more than is imported. An unfavorable (negative) balance of trade is known as a trade deficit and consists of importing more than is exported.
Balance of Trade
United States trade deficit
Multinational Company
A
multinational conglomerate is a company that involves at least 2 countries. Multinational corporations can have a powerful influence in international relations and local economies. Multinational corporations play an important role in globalization.
Examples of Multinational Companies
Comparative Advantage
In
economics, the principle of comparative advantage explains how trade is beneficial for all parties involved. Comparative advantage is a key economic concept in the study of trade.
Exchange Rate
The
exchange rate compares the value of one countrys currency (money) with that of another country. The United States dollar right now is not worth as much as it has been in our history. That is why Jay-Z is counting Euros in his new video and Heidi Klum will only except pay in Euros.
How much Russian is your Ruble dollar $32.83 worth around the world? British
Pound $0.66
Euro $0.75
Japanese Yen $98.27
Dollar $1
Chinese Yuan $6.82
Canadian Dollar $1.17
Mexican Peso $13.12
Many Americans are concerned about the deceasing value of the dollar.
Child Labor and Human Rights
Child labor is the employment of children under an age determined by law or custom. This practice is considered exploitative by many countries and international organizations. Child labor was utilized to varying extents through most of history, but entered public dispute with changes in working conditions during industrialization, and with the emergence of the concepts of workers' and childrens rights.
There are many laws that protect children as cheap labor today.
Protectionism
Protective
tariffs are designed to promote the sell of items inside of a country. A tariff is a tax on imports which increases the price of items from other countries. This increased price is deigned to help domestic items and the sell of items inside of a country.
Globalization
Organizations:
North American Free Trade Agreement (NAFTA) World Trade Organization (WTO) European Union (EU)
North American Free Trade Agreement (NAFTA)
Agreement
between the USA, Mexico, and Canada that promotes free trade among those 3 nations. Tariffs (tax on imports) and many restrictions placed on other countries were removed. It went into effect in 1994.
World Trade Organization (WTO)
The
WTO is an international organization designed to supervise and free international trade. The World Trade Organization deals with the rules of trade between nations at a nearglobal level. It is responsible for negotiating and implementing new trade agreements, and is in charge of policing member countries' adherence to all the WTO agreements
European Union (EU)
The
EU is the political and economic community of 27 European nations. It creates a single market and currency (except for England) that all countries follow. The EU produces 31% of the worlds GDP and has 500 million citizens.
