Globalization
Definition
The process by which different parts
of the world interact economically,
politically, and culturally.
History of Globalization
• Sharing between world cultures began 1000s of
years ago.
• In the 19th century cultural sharing exploded.
th
19
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Century
Europeans discover the Americas
European Imperialism
Industrial Revolution
Inventions
– Transportation
– Telephone
– Telegraph
th
20
Century
• Free market capitalism
– End of the Cold War
• THE INTERNET
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Exchange ideas
Transfer $$
Share culture
24/7
Disadvantages of Globalization
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Exploitation of child labor
Low wages
Few worker protections
Environmental degradation
Destruction of indigenous cultures
Destruction of small farmers
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Disadvantages of Globalization
Corporate greed
Job loss
Trade imbalance
Loss of small farms
Loss of small businesses
Advantages of Globalization
• Increased employment in
developing nations
• Cultural diffusion
(spread of culture)
• More “Service” Jobs
• Cheaper Goods (like
cars, food, clothes)
Free Trade Agreements
• An effect of globalization has
been the creation of free trade
agreements.
• Free trade
agreements eliminates tariffs,
import quotas, and
preferences on most
goods and services traded
between countries.
NAFTA
• North American Free Trade Agreement (1993)
• Removed Tariffs
• motor vehicles and automotive parts,
computers, textiles, and agriculture.
• US President George H. W. Bush.
• US President Bill Clinton
CAFTA
• August, 2004- U.S. signs free trade agreement
with the five Central American countries (Costa
Rica, El Salvador, Guatemala, Honduras,
Nicaragua, and the Dominican Republic)
• Agreement – eliminates tariffs (taxes), opens
markets, reducing barriers to services
European Union (EU)
• Economic and political partnership
between 27 European countries.
• Helped raise living standards
• Created a single European currency
(Euro)
• Built a single Europe-wide market in
which people, goods, services, and
capital move among member states
freely
GATT
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General Agreement on Tariffs and Trade
an international agreement
Reduced tariffs
Favored Nation Status
Updated 1947 to 1990s
Who benefits from free trade, and who
does not?
• Corporations
• Real smart people who
invent things
• Real aggressive people
who start large
companies
• Developing countries
• Poor People in Poor
Countries
• Poor People in the US
• Non-technical people in
the US
• Manual Labor in the US
• The Environment
• Small Farms and
Businesses
Outsourcing
• Having certain job functions
done outside a company
instead of having an in-house
department or employee
handle them
• Creation of new jobs - in the
third/developing world is just
one controversial element of
globalization.
INDIA & CHINA
• Benefits of fast-growing
economy.
• The economic
fundamentals of both
nations, with their
enormous populations of
young workers and
consumers, point to
strong growth for
decades under almost
every forecast.
• Problems of fast-growing
economy.
• Coups, political strife,
and bad management.
• Both China and India
need annual growth of at
least 8% just to provide
jobs for the tens of
millions joining the
workforce each year.
Use your notes to answer the
following questions.
• What is globalization?
• What historical events led to culture sharing and
globalization?
• What are the advantages and disadvantages of
globalization?
• Are free trade agreements a good idea? Explain
your answer.
• What are the benefits and problems of
outsourcing?