Globalisation case studies

Question 1

WTO case study

Answer 1

• Aims to lower trade barriers and promote free trade and court for disputes between countries over trade
• Donald Trump wants and likes tariffs
• EU countries able to trade with no tariffs- have poorer countries buy EU made products
• Mainly supports bigger companies- harm poorer countries
• New trade rules in Nigeria January 2005 to provide trade market for poor countries- loss of 250,000 jobs over last few years and lots of competition they can’t compete in

Question 2

IMF case study

Answer 2

• Promotes financial stability and monetary, particularly during financial crisis- these come with conditions attached
• 2010 loans given to Greece and made them privatise key industries – water, electricity etc
• Given out $200bn in funds since financial crisis
  World Bank:
• Loans money mainly to developing countries to become developed- USA very dominant
• Criticized for conditions they pose on countries they give loans to
• Gave debt relief to Tanzania because they made Water private to improve it under world bank terms- since quality of water and sewage services have declined

Question 3

EU case study

Answer 3

• World’s largest trade bloc- covers 28 countries and 16% of worlds imports and exports
• Imposes taxes on goods from outside EU
• Criticised for harming poorer farmers- can’t compete with EU farmers
• EU agree with trades around the world- Japan- no tariffs exporting agriculture produced
• Some have common currency

Question 4

ASEAN case study

Answer 4

• Trade bloc on 10 countries- low/no tariffs in most places
• No free movement yet- skilled labourers can
• Several free trade agreements with other countries

Question 5

China’s open door policy (1978) case study

Answer 5

• SEZ’s - tax incentive and lower tariffs
• Shenzhen first SEZ in 1980- 91% of all FDI from only Hong Kong- Eventually reduced income tax to 15% (opposed to 33% in the rest of China) and exemptions from local taxes (Tax breaks) and duty-free imports- big incentive -$4.3 billion 14% of China’s FDI
• Exemptions/ lower taxes is how they encouraged FDI
• These SEZ’s helped to increase proper regulations as there was more FDI
• Hard to invest in China lots of Rules and Regulations
• Subsidy is form of financial aid or support to an economic sector to promote economic and social policy
• China subsidies manicuring of steel- steel manufacturers to sell at a lower price than other countries
• Resulted in increase of Chinese imported steel to EU from 3m tonnes 2013 to 7m tonnes this year
• Lots of upset within UK and EU- one factor for steel plant in port talbot to close earlier this year- sales were down because of cheaper steel coming from China
• 30 million jobs created
• cataly​st for more ‘efficient’ FDI
• Accounts for 22% of GDP
• Accounts for 60% of exports
• 30% increase in farmers income
• SEZs contributed significantly to China’s development and levels of economic globalization
• 14 SEZs made with one open on coastal city of shenzhen