Chapter 10 Flashcards
Main Factors Contributed to Expanding Globalization
1.Communication Technologies
2.Trade
3.Transportation
4.The Media
Communication Technologies
•Innovation in communication technlogies have change the world
•Technological Convergence also increasing the rate of globalization
•Convergence also brings together media companies
Trade
•A typical consumer product is designed, developed, manufactured, and assembled by a host of companies, which may be located practically anywhere in the world
•This expansion of trade has occurred because countries have open their economies two outside influences
Reshaping Patterns
•The globalization of trade has been re-shaping international pattern since 1970
•Good and services are flowing more frequently between developing countries and particularly those that are developing quickly
Transportation
•The key to shipping goods more cheaply and effectively has been containerization
The Media
•Plays at distinct role in expanding globalization
•Celebrity endorsement can affect the media and consumption
•A desire for these products and services also encourages consumers to support government efforts to make it easier for foreign products and services to enter a country
International Agreements
•Trade Liberalization: reducing trade barrier, so that goods and services can move around the world easily
•Free Trade: when countries agree to eliminate tariffs and taxes on goods and services traded between them
World Trade Organization - WTO
•Established in 1995
•Ensures the terms of trade agreements are followed
•Settles trade disputes between governments
•Conducts trade negotiations
•Has a one country, one vote system, but in practice, decisions are made by coming to a consensus
WTO - Resolving Disputes
•Must settle dispute if one member country says another member country is treating it on a unfairly in a trade matter
•Has the power to use sanctions (economic actions, such as trade boycott to enforce its decisions)
NAFTA
•The Free Trade Agreement between Canada and the United States went into effect in 1989
•Was the world’s largest free trade zone at the time, immediately eliminated half the trade barriers between the three countries
NAFTA Debate
•Negotiations that led to the NAFTA sparked bitter debate
•People for and against the agreement expressed strong views about the effects of the agreement
EEC (European Union)
•Liberalized trading areas in Europe
Good services, money, and people move more easily
•Replace many currencies with the euro
Increase in trade between nations
•Pressure to reduce spending on social programs to interject money into the economy still exist
Transnational Corporations
•Reduce cost and increase profits by building factory service centres, and retail outlets in various countries
Influence of Transnational Corporations
•Transnational corporations dominate some key parts of the world economy
•Control most of the world’s energy and extract most of its mineral resources
•Threat that a transnational corporation might leave a community for us as governments to make concessions
•To attract and keep transnationals some governments use strategies like reducing taxes, selling natural resources for a bargain price, and adopting policies that transnationals will find helpful
•Transnationals may reduce the decision making powers of governments
Poverty Reduction
•Investment in infrastructure of undeveloped countries
•75% of investment in developing countries comes from the private sector, especially transnational corporations
