4.3 - Human And Physical Infleunces On Global Interactions

Question 1

What is a multi governmental organisation

Answer 1

Multi-government organizations (MGOs) are those that operate across a number of different states. Some are international, such as the World Bank, the IMF and the UN, whereas others are regional, such as the North American Free Trade Agreement or the European Union.

Question 2

What is a trading block

Answer 2

A trading bloc is an arrangement among a group of nations to allow free trade between member countries but to impose tariffs (charges) on other countries that may wish to trade with them. Examples of trading blocs include the European Union (EU), the Association of South East Asian Nations (ASEAN), the North American Free Trade Agreement (NAFTA) and the Union of South American Nations (UNASUR) (Figure 4.31). A trading bloc is protected from external trade to some degree.

Question 3

What are examples of trading blocs

Answer 3

• Free trade areas are where members abolish tariffs and quotas on trade between themselves but restrict imports from non-member countries. NAFTA is a good example of a free trade area.
• Customs unions are a closer form of economic integration. As well as having free trade between members, all members operate a common external tariff on imports from abroad. Mercosur is a good example of a customs union.
• Common markets are customs markets which, as well as the free trade in goods and services, allow free movement of people and capital.
• Economic unions are groups of nations that not only allow free trade and free movement of people and capital, but also require members to have common policies on such sectors as agriculture, industry and regional development. The European Union is an example of an economic union. When the UK joined in 1973, it joined a common market. With increasing integration, the common market became the European Economic Community (EEC), then the European Community, and finally the European Union in 1993. In 2016, the UK voted to leave the EU.

Question 4

Why is being part of a trading bloc benefital

Answer 4

Being a member of a trading bloc is beneficial because it allows greater market access - in the case of the EU, this amounts to over 500 million wealthy tonsumers. Some critics believe that trading blocs are unfair as they deny non-members access to certain markets.

Question 5

What is the North American free trade agreement

Answer 5

It’s a trade agreement between the USA, candad and Mexico and created the largest free trade zones in the world.

Question 6

What is the aim of the free trade agreement

Answer 6

• eliminate trade barriers
• promote economic competition
• increase investment opportunities
• improve coorperation between he usa, Canadá nd Mexico

Question 7

What forced Mexico to rearrange its economy

Answer 7

Until 1982, Mexico followed a policy of goverment-sponsored industrialization based on import substitution industries (ISs).
However, financial crises through overspending during the 1970s and 1980s forced the Mexican government to seek aid from the USA, the World Bank and the IMF. Aid was provided, at a price:
Mexico was forced to rearrange its economy along free market lines.

Question 8

Why was Mexico keen to receive aid

Answer 8

The government was keen to agree, partly to receive the aid and partly for fear of being ignored by the USA. Mexico hoped that, by joining NAFTA, economic growth would follow and employment would increase, and it would take off as an NIC.
The USA managed to include clauses to protect American workers, and agricultural treaties were arranged bilaterally between the countries. US critics warned that assembly jobs would be lost to low-cost locations in Mexico.

Question 9

Why has there been option to the North American free trade association

Answer 9

• many small firms have closed as a result of competition with lower-cost US firms
• many firms left Canada for lower-cost areas in the USA
• mergers and takeovers have increased unemployment.

Question 10

How has the North American trade association affected Mexico

Answer 10

• US industries move to Mexico to take advantage of its ultra-cheap labour. Along the USA-Mexican border there are about 2,000 US-owned, labour-intensive, export-orientated assembly plants, employing about 500,000 Mexican labourers. This has increased unemployment in the USA and reinforced a low-wage mentality in Mexico - incomes in this maquiladora sector have risen by only 15 per cent since 1994. Many of the workers are children and working conditions are unsafe.
• to 15 million farmers are affected by the removal of subsidies, decline in communal ownership of the land and the removal of border restrictions on trade. US and Canadian grain producers can dump their surpluses in Mexico, forcing uncompetitive Mexican peasants out of agriculture. On the other hand, Mexico has become an important meat market for the USA. This is partly due to the rise in its GDP per capita.

Question 11

Why are exporting zones and free trade zones important

Answer 11

Export processing zones -caled new in at ones (PTs) are Important parts of the sent what are seems tical division of labour, and they represent what are seen as relatively easy paths to industrialization. By the end of the 20th century more than 90 countries had established EPLs as part of their economic strategies.

Question 12

Where has the popularity of exporting processing zones come from

Answer 12

• problems of indebtedness and serious foreign exchange shortfalls in LICs since the 1980s
• the spread of new liberal ideas in the 1990s that encouraged open economies, foreign investment and non-traditional exports the search by TNCs for cost-saving locations, particularly in terms of wage costs, in order to shift manufacturing, assembly and component production from locations in the advanced economies.

Question 13

Why did South Korea start free economic trading zones

Answer 13

South Korea’s national government started the north-east Asian countries’ business hub project in April 2002. Free economic zones were created to attract more direct foreign investment.
Incheon is one of these special economic zones with minimized regulation and maximized business incentives and opportunities for foreign Investment.

Question 14

What do free conomic zones offer to South Korea

Answer 14

Compared to the rest of the country, the IFEZ offers tax breaks and other incentives 1o attract foreign investment and expand foreign exchange circulation. It also offers a foreign language service, labour flexibility, and foreign education and medical institutions. Its aim is to provide foreign-invested enterprises with an optimal business and living environment in order to attract their investment in high-end industries and global services.

Question 15

LOOK AT SOUTH KOREA FREE TRADING ZONES

Question 16

What are the gernal trends of economic migration

Answer 16

• Migration is becoming more global, in the sense that more countries are affected at the same time and the diversity of areas of origin is increasing

Migration is becoming more differentiated, with no one type of movement dominating a country’s flows but instead combinations of permanent settlers, refugees, skilled labour, economic migrants, students, retirees, arranged marriages, and so on.
• Migration is increasing among women, who are not only moving to join earlier male migrants but now playing a much fuller part in their own right, notably as economic migrants as well as often being dominant in refugee flows.

Question 17

What does the trends of economic migration controls and rules have upon policy makers

Answer 17

These trends have implications for policymakers.
There are new challenges for governments to provide for migrants, but there is also increased hostility in receiving countries. Increasing globalization and the growing diversity of migrants make it harder for governments to restrict migration.
Migration is important for the growth of an economy. In the USA, economic prosperity is associated with the country’s ability to attract labour - both skilled and unskilled. Due to the USA’s ageing population, the immigrant population accounted for more than 50 per cent of the growth in the labour market in the 1990s. Nevertheless, many people in the USA want to control migration.

Question 18

LOOK AT MIGRATION CONTROLL IN THE USA