Global Knowledge test Flashcards
Define globalisation [2]
Increasing interconnectedness [1];
widening/deepening/speeding up [1];
variety of dimensions (cultural/economic/political) [1]
Give an example of the Economic dimensions of globalisation
international trade, foreign direct investment, transnational corporations, global money exchanges , global marketing
Give an example of the Cultural dimensions of globalisation
universalisation of culture; glocalisation of products; westernisation; cultural influences (food)
Give an example of the Political dimensions of globalisation
global governance; growth of western democracies and their influences/decline of centralised communist economies
Give an example of the Social dimensions of globalisation
social networks, migrant families; diaspora
Give an example of the Biological dimensions of globalisation
globalised health risks; invasive species, Pandemics
Outline the direction and nature of flows and capital
Capital flows (movement of money for the purpose of investment, trade or to produce goods/services) - e.g.
FDI: HIC > LIC (increasingly NIC > LIC).
Repatriation of profits: LICs > HICs (TNCS repatriate profits).
Aid: HIC > LIC
Remittances: HICs > LICs
Outline the flow of Raw Materials
LICs > NICs/HICs
Outline the flow of Low value manufactured
NIC > HIC
Outline the flow of High value manufactured
HIC > NIC/LIC
Outline the flow of Labour
LIC/NIC > HIC (but NICs such as Gulf states and Tiger economies are more popular)
Outline the flow of Services
High level services (insurance) - HIC > HIC; low level services (call centres): NIC/HIC > HIC
Outline the flow of Information
HIC > NIC/LIC
Outline the flow of technology
Advances HIC > NIC/LIC (TNC investment in infrastructure)
Glocalisation
product developed and distributed globally but adjusted to be specific to local consumers.
Global shift
movement of manufacturing from developed countries to lower wage economies (deindustrialisation of LICs).
What is interdependence
places become increasingly dependent on one another ( what happens in one place increasingly impacts on other places/they rely on each other- events in different parts of a system affect each other).
An example of Economic interdependence
reliance for economic growth - international trade (only produce comparative advantage); remittances; financial crisis; trade blocs
An example of Social interdependence
migration/diaspora
An example of Political interdependence
global governance e.g. 2015-16 European migrant crisis
How have the changes to the financial system and production promoted globalisation
Financial systems:
Deregulation of financial markets (removal of government control)
How have the changes to the financial system and production promoted globalisation
Production
Outsourcing
Economies of Scale
Just in time production
How has changing technology promoted globalisation- Give 3 ways
development of the internet (rapid movement of information/tecn/capital - TNCs, westernisation)
improvements in travel (allows for increased movement of goods/people > migration) [1]
containerisation (reduces transport costs, boost trade as transport costs don’t cancel out comparative +ve)
Give an argument for and against the importance of changing technology for promoting globalisation
Containerisation:
+ reduced transport costs by 70% hence boost trade as transport costs less likely to cancel out gains from comparative advantage.
- Concern re atmospheric pollution > may need to introduce green taxes on shipping.
Give an argument for the importance of trade blocs in promoting globalisation
common external tariffs and lower internal barriers > trade within bloc is more competitive > trade increases (implementation of NAFTA exports from the US to Canada and Mexico tripled $142 million to $452 billion (1993))
increase movement of labour (free movement Schengen agreement)
increase negotiating power of members
Give an argument against the importance of trade blocs in promoting globalisation
trade diversion [1]; trade disputes between blocs (as fight for regional interests) [1]; trade blocs can break down and have disputes between themselves [1].
Outsourcing
companies arrange for goods to be produced by other companies usually at lower cost locations.
What are the impacts of outsourcing?
de-industrialisation of HICs
> de-multiplier effect/loss of jobs (UK lost 50% of manufacturing jobs 1983-2003)
structural unemployment (skill set of local workers no longer compatible with jobs available)
How have unequal flows of labour created inequality?
brain drain from LICs (specialised workers move to HICs which benefit/LICs economy declines)
rural-urban migration increasing poverty in rural areas)
dependence on remittances and lack of alternative income
How have unequal flows of capital created inequality?
foreign aid dependency with little development of manufacturing
dependency on aid/remittances can cause issues if it stops
aid can fund armed groups/conflict [1]; F
Why do HICs dominate world trade? Have better market access?
Infrastructure is similar and well-developed, including a high tele-density rate. [1]
High-value products (not primary) - N.b. issues with primary products- volatile etc. [1
High market volume - wealthy middle classes (high disposable income). [1]
Geographical proximity. [1]
Party to trade and tax agreements and trade blocs. [1
Literacy rate is high and similarly high skill level. [1]
Give 2 economic impacts of poor market access?
dependent on low value primary products
less foreign direct investment (as uncompetitive)
Give 2 social impacts of poor market access?
less employment opportunities and less disposable income
less money invested in health/education/infrastructure so lower quality of life
often poorly paid work and workers exploited [1].
Race to the bottom:
countries /businesses compete to attract FDI/TNCs therefore cut wages, labour regulations and environmental restrictions.
Comparative advantage:
products a country can produce at a lower opportunity cost (the loss of other alternatives when one alternative is chosen) than others.
Special economic zone:
areas with different trade and investment rules to the rest of a country e.g. companies investing there may pay lower taxes on land and goods. SEZs increase trade while keeping barriers in the rest of the country.
Primary product dependency:
A country, usually a LIC which relies on one, or a very small number of raw material for its export earnings.
What are the problems with primary product dependency
volatile prices as supply fluctuates but demand remains the same [1];
supplies are finite [1];
discourages investment in other areas/less diversification of manufacturing [1];
resource curse (corruption/war as tension of expensive resources [1];
monopoly power [1];
easy wealth reduces economic development elsewhere as appreciation in currency > decline in competitiveness [1]).
Give 5 ways world trade patterns have changed since the 1980’s?
increased (x8 since 1980s)
increase in intra-corporate trade (40%)
triadic structure (80% between Europe, North America and Asia ) developing nations still dominate but emerging economies now challenge G7
trans-pacific trade is now growing faster than trans-atlantic trade
slower growth of LICs (1995 African countries accounted for 2% of world trade - 2010=3%)
most trade remains intra-regional (2006 74% of international trade in Europe was between European countries)
dominated by TNCs (70%) [1]
Gives 3 ways world investment patterns have changed since the 1980’s?
increased ($400bn in 1996 to $1500bn in 2016)
1980s HIC > HIC increasingly HIC > NIC/LIC
increasing NIC investment in NIC/LIC (particularly China)
Free trade
No barriers to trade
What are the positives of free trade
specialise in comparative advantage
economies of scale
increased access to raw materials/resources
What are the negatives to free trade?
more job outsourcing/de-industrialisation of HICs
widening wage inequality
exploitation of labour in LICs [1];
What is fair trade?
What does it include
a fair price to consumers.
Minimum fair and stable price for producers
Fair trade premium (additional money for use at improving
social/economic/environmental conditions
Must comply with environmental standards.
What are the positives of fair trade?
minimum price means farmers can reduce price volatility and poverty
premium invested in improving the local areas
environmental standards e.g. prevent use of chemicals increases sustainability
What are the negatives of fair trade?
reduce incentive to diversify (as minimum price for primar products)
is becoming mainstream (are producers exploiting ethical consumerism)
inefficient (minimum price encourages over production so non-fairtrade farmers lose out as price falls)
fair trade dependency
reliant on consumer awareness campaigns - loss of money
Tariffs
tax on imports
Quota:
Physical limit on the amount of goods that can be imported
Subsidies:
Grants (money) given to domestic producers (to make them more competitive)
Embargoes:
complete ban on trade with a specific country/specific
What is the WTO? What does it do?
sets the global rules of trade; promotes free trade; supervises world trade (negotiate trade agreements)
What are the positives of the WTO?
promotes free trade (see benefits of free trade)
settles disputes (increasing number of trade disputes brought to WTO)
153 members 97% of world trade
What are the negatives of the WTO?
require consensus so difficult to make progress (overshadowed by alternatives)
protects trade related intellectual property rights
favours TNCs as ‘most favoured nation principle’ cannot give preference to local businesses
Trade blocs:
a group of countries that have reached a common agreement that promotes and manages trade
What are the positives of trade blocks?
increase trade(better market access as fewer barriers to trade within bloc)
individual countries have greater negotiating power
protects in-bloc businesses from external competition
economic peaks and troughs filtered through the block (if a shared currency e.g. economic union)
encourages in-block specialisation
increased output > increased employment
share tech advances
may set higher environmental standards across the bloc
What are the negatives of trade blocs?
trade diversion
loss of sovereignty
some loss of financial controls
pressure to adopt central legislation and loss of sovereignty
trade disputes between trade blocs
expensive (EU = £960bn)
share resources so may damage some economic sectors
What is the IMF?
Monitors the global economy and advises governments on how they could improve their economic situation
What are the positives of the IMF?
prevents economic crisis (interdependence)
loans may prevent economic instability/poverty
190 members > inclusive
What are the negatives of the IMF?
conditions attached to loans
debt repayment often results in decline in public services
conditions may cause a loss of political sovereignty
voting power based on monetary subscriptions (inequality)
What is the world bank and what does it do?
provides loans for use in development projects [
What are the positives of the world bank?
promotes economic development [1];
loans are long-term and may be interest free if low GNI per capita [1];
promotes private businesses/infrastructure[1]
What are the negatives of the world bank?
loans do need to be repaid [1];
projects are top down with little consideration of impacts on local people
always had an American president [1].
What does NAFTA stand for and who is in it?
North American Free Trade Agreement - US; Mexico; Canada
What does EU stand for and who is in it?
European Union
Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden.
What does TPP stand for and who is in it?
Trans-Pacific Partnership -
USA; Australia: Brunei: Canada: Chile: Japan: Malaysia: Mexico; New Zealand; Peru; Singapore and Vietnam
What does TTIP stand for and who is in it?
Trans-atlantic Trade and Investment Partnership -
EU/USA
What does MERCOSUR stand for and who is in it?
Brazil, Argentina, Uruguay, Paraguay and Venezuela
What does APEC stand for and who is in it?
Asia-Pacific Economic Cooperation -
Indonesia. Japan. Malaysia. Mexico. New Zealand. Papua New Guinea. People’s Republic of China. Peru. Republic of Korea. Russia. Singapore. Thailand
What does CARICOM stand for and who is in it?
Caribbean Community and common market
Antigua and Barbuda, Bahamas, Barbados, Belize, Dominica, Grenada, Guyana, Haiti, Jamaica, Montserrat (a British overseas territory in the Leeward Islands), Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Suriname, and Trinidad and Tobago.
What are the positives of NAFTA?
increase in trade/GDP [1];
reduced reliance on foreign oil [1];
increased foreign direct investment [1];
increased jobs [1];
encouraged members to adopt similar environmental laws [1];
What are the negatives of NAFTA?
deindustrialisation of the US/Canada/ jobs move to Mexico [1];
put Mexican farmers out of business (US subsidies agriculture) [1];
Maquiladoras (manufacturing plants on US border with poor working conditions/lack of environmental regulation) [1];
Increased rural > urban migration (rural decline) [1]
What is special and differential treatment?
WTO agreements with special provisions/favourable treatment of LDCs
What are the positives of special and differential treatment?
gives LDCs better market access [1]
> promotes economic development [1];
allows for diversification [1];
increases employment [1]
What are the negatives of special and differential treatment?
SDT provisions by HICs are often voluntary [1];
may be conditional [1];
often unbalanced (87% of preferential exports to EU from 6 countries) [1];
often not generalised (tends to focus on natural resource) [1];
takes 8-10 years for applications to be LDCs to be accepted [1].
What is global governance?
Give examples
rules, norms and laws that make and remake global systems. - Deal with issues that cannot be solved by any one state.
World Trade Organisation [1] World Health organisation [1]; International Monetary Fund [1]; World Bank [1]; United Nations [1]
What is the Paris agreement?
carbon emissions reduction [1]; voluntary system of pledges [1]; track progress [1]; green climate fund [1].
What are the positives of the Paris agreement?
holding warming to 1.5C would slow sea level rise [1];
180 countries have submitted pledges [1];
review process to update and strengthen pledges [1].
What are the negatives of the Paris agreement?
earth already warmed by 1C since Industrial Revolution may have triggered irreversible loss of Antarctic glaciers [1];
no enforcement of pledges
current pledges if met only guarantee 3.5C [1];
only considers carbon sources not sinks
USA has pulled out (large producer) [1].
gives 4 ways TNC’s form links between countries?
Mergers
Acquisitions
Outsourcing
Global supply chains
Define Global Commons?
resources with no national governance/ outside domain of any one nation state [1] but used jointly/shared by all people [1]; bring economic benefits to all [1]; common heritage of mankind [1].
What are the 4 global commons?
High seas
Atmosphere
Outer space
Antarctica
Common heritage of mankind
some localities belong to all humanity and the resources are available for everyone’s use and benefit
Tragedy of the commons:
common access to resources inevitably results in resources being over-exploited as individuals put their needs and desire not to lose out over the collective need [1].
NGO
Non-governmental Organisation
Advocacy NGO:
campaigns to raise awareness
Operational NGO:
frontline support services for those in need.
What is the UN and what does it do?
Promote/protect:
global peace and security/human rights/human development. Tackle shared challenges such as climate change.
What are the positives of the UN?
success of the Millennium Development Goals
Improved stability - e.g.Gulf war
contains 193 countries - inclusive
What are the negatives of the UN?
veto power of 5 permanent members of the security council
general assembly is advisory
injustices e.g. Rwandan civil war; Yugoslavian civil war
no standing or permanent military of its own
Millennium Development Goals - not completely effective 30% of countries didn’t meet their targets; poorest still left behind (Sub-saharan Africa >23 vs S. Asia >66%)
disparity in provision e.g. urban vs rural
Vertical integration
company owns entire supply chain
Horizontal integration
company owns one level of a supply chain
Name an international treaty for the High seas
UN Convention on the Law of the Sea
Name an international treaty for Space
Moon Treaty
Name an international treaty for Antarctica
Antarctic Treaty System
Protocol on Environmental Protection
Name an international treaty for the Atmosphere
UN Framework Convention on climate change
Give 3 reasons globalisation poses a threat to the global common of the high seas.
Overfishing
Pollution
Acidification
Who are the main importers of Bananas?
EU/USA main importers (consumed 27% of total exports in 2013)
Who are the main exporters of bananas?
Africa, Caribbean and Pacfic countries and Central American Republics
Who are main TNCs involved in bananas?
Chiquita, Dole, Del Monte
What are the environmental impacts of producing bananas?
deforestation (loss of soil fertility; increased flood risk; less reliable rainfall etc) [1];
monoculture (more at risk from disease outbreaks) [1];
dependent on agrochemicals (risk of eutrophication etc) [1]
What are the Issues of market control by: Chiquita, Dole and Del Monte: produce and control ⅔ of the world’s exports:
race to the bottom (exploitation of workers) [1];
loss of sovereignty (use size to influence governments) [1]
Who receives most of the profit from banana sales?
Retailers
What happened in the Banana War in
1975
1975: LOME convention give special differential treatment to former European colonies in the form of preferential tariff free imports (Latin American exports still have tariffs).
What happened in the Banana War in 1992?
1992: Formation of single European Market, LOME convention is included in regulations.
What happened in the Banana War in 1992-5?
1992-5: TNCs complain to the WTO about EU unfair trade rules, by 1997 the WTO rules against EU and orders discrimination to cease - EU proposals do not satisfy large producers.
What happened in the Banana War in 1999?
1999: USA government puts sanctions on the EU - $520 million a year of tariffs placed on European exports to America. WTO reinvestigate.
What happened in the Banana War in 2009?
2009:EU agree to gradually reduce tariffs on Latin American bananas, the agreement was ratified in 2012.
Preferential treatment was necessary for Windward Islands to be competitive vs large TNCs. Removal of SDTs:
No longer competitive > collapse of banana industry with socioeconomic impacts as were primary product dependent [1]
Increased race to the bottom > exploitation of workers [1]
Increasing power inequalities (lack of negotiating power) [1]
Bananas: How have fair trade policies impacted on the windward islands?
Environmental policies (improve long term sustainability) [1]
Minimum/stable price benefits farmers [1]
Social premium invested locally [1]
Why are supermarkets a problem?
Monopoly [1] - control market > race to the bottom of producers [1]> associated exploitation of workers/lack of profits [1].
