Today’s World
Section 1
Today’s World
Section 1
Trade and Globalization
Preview
• Starting Points Map: World Per Capita GDP
• Main Idea / Reading Focus
• Economic Interdependence
• Global Trade
• Quick Facts: Major Trade Organizations and Agreements
• Cultural Exchange
Today’s World
Click the icon to play
Listen to History
audio.
Click the icon below
to connect to the
Interactive Maps.
Section 1
Today’s World
Section 1
Trade and Globalization
Main Idea
Trade and culture link economies and lives around the world.
Reading Focus
• How does economic interdependence affect countries around
the world?
• What are some patterns and effects of global trade?
• How does globalization lead to cultural exchange?
Today’s World
Section 1
Economic Interdependence
At the beginning of the twenty-first century, the world was divided over
a number of political, cultural, and economic issues.
Globalization
• Despite divisions, countries tied
together like never before
• Globalization is force behind
closer relationships
– Process in which trade,
culture link countries
– Improvements in
transportation, communication
make global trade easier
Interdependence
• Major effect of global trade,
increased economic
interdependence
– Relationship among countries
in which they depend on
each other for resources,
goods, services
– Occurs because countries
vary in goods, services they
provide, need
Today’s World
Section 1
Developed and Developing Countries
Economy
• Goods, services nation provides and needs depend on level of economic
development in that country
• Countries grouped in two categories: developed, developing
Developed
• Industrialized nations have strong economies, high standards of living
• 20 percent of world’s nations wealthy, powerful like Japan, United States
• Have access to good health care, education, technology
Developing
• Less productive economies, lower standard of living; Guatemala, Philippines
• People in these countries lack adequate education, health care
• Poorest, least-developed countries located mostly in Africa, southern Asia
Today’s World
Section 1
Growth and Outsourcing
Multinational Corporations
• Increasing interdependence and dramatic growth of multinational
corporations—large companies operating in multiple countries
• Benefits to companies
– Outsourcing—having work done elsewhere to cut costs, increase
production
– Manufacturing facilities in developing countries, where materials, labor
relatively inexpensive
• Outsourcing
– Advocates say: creates jobs and wealth in developing countries
– Critics say: fails to improve standard of living, outsourcing causes job
loss in company’s home country
Today’s World
Section 1
Global Economic Ties
• Certain events, actions can affect economies of many nations
• Global interdependence particularly evident in times of uncertainty
– Early 2000s, price of crude oil rose dramatically
– Factors: rising world demand, concern over available supply
Oil Prices
• All countries depend on oil for energy; rise in prices felt around world
• Developed countries like United States faced with higher costs
• Poor nations in Africa could not afford to import, faced shortages
• Rise in oil prices led to increased demand for alternative energy
sources, attempts to reduce consumption
Today’s World
Section 1
Summarize
How does economic interdependence affect
the world?
Answer(s): helps to provide jobs in developing
countries, increases production and decreases
cost for multinational companies
Today’s World
Section 1
Global Trade
Globalization often leads to or promotes free trade, the exchange of goods
among nations without trade barriers such as tariffs. This can lead to
consumers purchasing higher-quality goods at lower prices.
International Trade
Organizations
GATT, WTO, OPEC
Regional Trade
• Many of these groups
work to promote,
regulate free trade
• 1995, GATT replaced
by World Trade
Organization (WTO)
• 1948, General
Agreement on Tariffs
and Trade (GATT)
• Monitors national
trade policies
• Regional trade blocs
promote free trade,
deal with economic
issues of neighboring
nations
• Worked to limit trade
barriers, settle
disputes
• Organization of
Petroleum Exporting
Countries (OPEC)
works to control oil
production, price
• European Union
(EU), North American
Free Trade
Agreement (NAFTA),
others
Today’s World
Section 1
Today’s World
Section 1
Effects of Global Trade
Benefits
• Global trade has clear benefits
• Developing countries can
provide new, valuable markets
for goods, services produced by
developed countries
• Technology, services, money
from developed nations can
improve public services, raise
standard of living of developing
countries
Anti-Globalization
• Opponents argue process
benefits wealthy developed
nations at expense of
developing nations
• Free trade encourages
practices that exploit workers,
destroy environment
• Some promote fair trade, like
fair trade coffee movement
guaranteeing fair prices to
coffee bean farmers
Today’s World
Section 1
Find the Main Idea
How does global trade affect the world?
Answer(s): can provide opportunities for
developing countries; opponents believe global
trade exploits developing nations, supporters
believe it provides for the production and sale of
high-quality, low cost goods
Today’s World
Section 1
Cultural Exchange
Culture
Popular Culture
• Globalization; countries linked
through trade and culture
• Globalization leads to changes in
popular culture
• Modern transportation,
communication allow faster
exchanges of ideas, customs
• Culture traits: food, sports, music
common within group of people
Spread of Traits
Mass Media
• Globalization leads to cultural
diffusion, spread of culture traits
from one region to another
• Television, movies, music most
powerful methods of cultural
diffusion
• Work, travel, permanent moves all
play part
• Satellite news and Internet also
ways of exchanging images, ideas
Today’s World
Section 1
Effects of Cultural Changes
Negative Effects
• Some believe changes largely negative
• Mass media, advertising encourage growth of consumerism, preoccupation
with buying consumer goods
Media
• Opponents say market shaped by media and advertising, not actual needs
• Worry that globalization creating common world culture, allowing traditional
cultures to lose uniqueness
World Community
• Globalization linking people together through economics, culture
• Challenge to preserve valuable traditional cultures while providing
enrichment from other places in world
Today’s World
Section 1
Summarize
How is cultural exchange a part of
globalization?
Answer(s): leads to cultural diffusion, more travel
to other countries for work or vacation, exotic
goods from other countries available