global systems and governments topic questions

Question 1

explain how trade agreements are a factor in globalisation? [4 marks]

Answer 1

• Trade agreements are formed by countries joining together to form a trade bloc that encourages trade between themselves and promotes economic co-operation (1), for example NAFTA (1d)
• Trade agreements are a factor in globalisation by encouraging trade across a number of countries. This may lead to increased investment from other countries (1) for example Audi has built a factory in Mexico in order to gain access to other NAFTA countries (1).
• Trade agreements can lead to people moving more freely to seek work in the trading bloc (1). This encourages globalisation by increasing links between countries as often supporting goods and services will follow (1d).
  Bilateral agreements allow trade between two countries and can therefore enable greater flow of goods and labour between the two countries (1).
• Without trade agreement some countries wouldn’t trade with others (1). Therefore, agreements such as the WTO which covers trade in goods, services and designs (1d) help trade flow freely by providing a forum for negotiations encouraging trade across the globe (1d).
• However, it can also be argued that trade agreements are necessary because of globalisation (1). Countries need to act as bloc to be able to negotiate on a global scale due to unequal power (1d). Credit given for how lack of agreements, e.g. quotas and tariffs, will act against globalisation.

Question 2

explain how differential access to markets can impact the economic well-being [4 marks]

Answer 2

• Being in a trading bloc increases the potential for trade (1), for example, USMCA / NAFTA means that trade is enabled between Mexico and the US (1d). This improves the economic well-being of Mexico where thousands of jobs are generated in the car industry (1).
• However, being in a trading bloc can also have negative impacts such as a dependence on the economy of countries in the trading bloc (1). For example, Mexico suffered economically due to the recession in the US in 2008 (1) due to its reliance on exports to the US (1d).
• Some countries do not have access to trading blocs which limits trade (1) For example, Ukraine does not have access to the single market of the EU and has to negotiate its own deal (1). This means Ukrainians are not free to move to the EU to earn higher wages reducing economic well-being (1d).
• Trade agreements can be seen as being unfair (1). Developing countries don’t have access to the rich markets of the EU (1d). This results in them finding it harder to trade and subsequently develop (1d).
• The WTO has sought to ensure that developing countries all have preferential access to developed trade markets (1). This provision is called Special and Differential Treatment (SDT) (1d). The aim of this is to promote faster income and growth (1d).
• Examples of trade preference schemes include the EU’s ‘Everything but Arms’ (1d) accepts goods from the least developed countries on an import tax-reduced, quota-free basis (1d).
• However, some people criticise preferential trade agreements as they can cause cheap imports to flood (1). This can result in deindustrialisation in developed countries and higher unemployment (1d).

Question 3

explain how one transnational corporation has contributed to the globalization of the world economy [4 marks]

Answer 3

• Nike has become one of the world’s largest suppliers of sports equipment (1), employing over 44 000 workers in over 50 countries (1d).
  Manufacturing helps the social and economic development of these countries through the transfer of skills, technology and the rise in wages (1).
• The company’s headquarters and much research take place in Oregon in the USA (1) but its products are manufactured in poorer countries like Indonesia and Vietnam, where labour costs are cheaper (1d).
• Components for sports goods are sourced from various different countries around the world (1), including rubber for its trainers from Malaysia and Indonesia and cotton from Turkey and India (1d).
• From its global operations, Nike’s annual turnover continues to rise, with profits reaching $14 billion in 2015 (1).
• The company has increased its global market and reputation by sponsoring and promoting international sports events and sports stars (1).

Question 4

describe the concept and type of global flows

Answer 4

• Globalisation is the increasing interconnectiveness of the world’s economic, cultural, ad political systems (1)
• flows broadly describe the movement of something from point A to B or one area to another (1)
• these can be both tangible such as flows of labour (1)(people/movement of migration) and products ( traditional manufactured goods)
• or intangible such as flows of services (in the tertiary/quaternary sectors) and information ( such as via the internet/model devices/technological advancements) (1d)
• most flows involve the transaction of wealth/capital
• which themselves become flows with the larger global network (1d)
• with regards to capital, this can occur in a number of forms, such as TNC profit Repatriation (1d)
• FDI (foreign direct investment) (1d)
• aid ( bilateral/multilateral such as through the UN (1d)
• as well as remittance payments
• all flows occur on different scales and time periods, but importantly they occur from and to all corners of the globe (1)

Question 5

Describe the role of technology in the growth of globalisation

Answer 5

• Globalisation can be defined as the increasing
  interconnectedness of the world’s economic, cultural and
  political systems. In recent years, one of the most
  important influences in all dimensions of globalisation is
  technology (1)
• This can be through advancements in transportation and
  transportation infrastructure, such as aircraft, vehicles
  etc… which have improved the accessibility of the world.
  (1)
• Computers, phones, e-mail and the internet have made
  global communication easier than ever before, opening up
  new markets and creating a 24/7 economy (1)
• for example according to the world bank in 2020 the
  remittance market was worth over $700 Billion. (1d)
• Improvements to technology in education and health have
  led to rising life expectancy and literacy - leading social
  mobility and access to improve. (1)
• Technology has also led to cultural globalisation, for
  example the ‘Americanisation’ of tastes and fashion
  through global advertising. (1)

Question 6

explain the concept of the global commons

Answer 6

• The global commons refers to the Earth’s shared
  resources (1)
• such as the deep oceans and atmosphere
  (1d.
• The global commons includes those areas that have no
  national governance but are used jointly by all people (1).
• The only land-mass considered to be part of the global
  commons is Antarctica (1).
• Some people define the commons to be even broader to
  include resources that are shared by all
• but not controlled
  by any single country (1)
• for example, cyber-space,
  language and science (1)
• this is referred to as the
  ‘common heritage of humanity’ (d)
• Access to such shared resources has historically been
  difficult but advances in technology mean that such
  resources are in danger of being over exploited (1)
• for example the potential oil reserves in Antarctica (1).
• The notion of the tragedy of the commons (1)
• as there is
  no single jurisdiction there is always the potential for
  overexploitation (1)
• If an individual country / group acts independently this will be contrary to the whole group and
  the shared resource becomes depleted (d)
• As current resources become depleted there will be an
  increasing need for the global commons to meet the needs
  of the world’s population (1)

Question 7

Outline the costs of globalisation that are perceived by some people

Answer 7

• Globalisation critique / counter-globalisation refers to the
  view that elements of our globalised, interconnected world
  are not as valuable as perceived, and that nations and
  people would be better of less intertwined with one
  another’s affairs. (1)
• Some people argue that ‘top down’ globalisation has
  overemphasised benefits for those in power (1)
• at the risk and growing vulnerability of those marginalised, minority
  groups or those lower down the social hierarchy. (d)
• It is also argued that the global ‘core-periphery model’ has
  led to a ‘race to the bottom’ in outsourcing of products and
  services to lower income countries where workers are
  often exploited and treated poorly. (1)
• Furthermore, globalisation and global wealth growth has
  also been paired with environmental destruction and a
  decline in the health of the natural world (1)
• – pollution,
  overcrowding and overconsumption being some of these
  core reasons. (d)
• Others, such as US President Trump, argue that
  globalisation unfairly affects certain economies or countries
  (1)
• hence his trade war with China, who he claimed ‘stole
  American industry.’ (d)
• Criticism of globalisation may also involve global
  institutions such as the UN (1)
• who are often branded as
  ‘bureaucratic and ineffective’ or the EU ‘who took the
  sovereignty of countries in it’ – which led to the Brexit
  referendum. (d)