WHAT IS GLOBALIZATION?
Globalization refers to the process of increasing integration of economies and societies
throughout the world. Economies have become integrated through increasing flow of goods and
services across borders, liberalization of trade policies, and the spread of communication and
information technologies. The concept of globalization has sparked tremendous debate because
of disagreement over the impacts it has on the world. Advocates of globalization argue that it
should benefit people throughout the world because of the diffusion of democratic values and
principles, and the expansion of economic opportunities from capitalist forces, thereby reducing
social problems such as poverty and promoting human rights. Critics of globalization argue that
globalization has the opposite effects, creating significant and complex environmental, cultural
and economic concerns, particularly in developing countries. Some of these negative impacts will
be discussed below.
Environmental Impacts
Many believe that globalization has stimulated the process of environmental degradation which is
currently threatening the world’s sustainability. The increasing need for resources to meet the
demands of the market economy has led to significant environmental strains. The world has seen
unprecedented environmental problems in recent years including alarming pollution rates, climate
change, and resource depletion.
Cultural Impacts
Globalization has increased the impact of western cultural influences in all areas of the world,
threatening traditional cultural practices and diversity in many countries and societies.
Increasingly, traditional practices are in conflict with the values of western culture which promote
liberalized sexual and moral beliefs. Many cultures believe that cultural influences, particularly
those of American society, lead to the deterioration of moral standards and religious values.
Some traditional cultures attempt to resist these forces resulting from global technology by
blocking the spread or use of telecommunications technology.
Economic Impacts
The negative economic impacts of globalization are significant especially when considering the
impact of multinational organizations on developing countries. A trend in globalization is the
movement towards multinational organizations such as NIKE. Multinationals work on the premise
of eliminating costs in order to increase profits. Typically, this means that a multinational
organization will set up in a developing country where labour protections are lax, and worker
wages are low, in order to maximize profitability. Invariably, this process leads to a series of
complex issues in developing countries such as human rights violations and child labour.
INDEPTH: SUMMIT OF THE AMERICAS
What is globalization?
CBC News Online | March 30, 2006
Ask someone who was sitting around any of the tables at any of the Summits of the
Americas since 1994, what globalization is and you would get a very different answer than
from someone protesting on the outside of the ever-present security fences.
A Canadian government website puts it succinctly enough: globalization, it says, "describes
the increased mobility of goods, services, labour, technology and capital throughout the
world." Sounds innocuous enough.
Canada, of course, was an early supporter of trade and investment liberalization and
remains so today. More than 40 per cent of the country's economy depends directly on
trade.
The Free Trade Area of the Americas (FTAA) talks make up the cornerstone of the Summit
of the Americas process that began in late 1994. Its goal is to create the largest free trade
area in the world – 34 countries in the Americas with 830 million people and a combined
GDP of more than $20 trillion. So what's all the debate about?
If the Canadian government thinks expanding trade and international investment is so vital to
our economy (and it does think that), then why isn't everybody on board the globalization
bandwagon?
Well, here's another definition of globalization – this one from an anti-globalization group
known as Anti-Marketing. Globalization, it says, is "the process of exploiting economically
weak countries by connecting the economies of the world, forcing dependence on (and ultim
Colourful rhetoric aside, it is this latter definition that captures the essence of the
considerable opposition to globalization – a conviction that unfettered, free markets
inevitably benefit multinational corporations at the expense of smaller businesses, local
culture and average workers.
Broadly speaking, those opposed to globalization say it leads to:
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Lower wages and fewer employee benefits.
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Higher unemployment.
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Lower health and safety standards.
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Lower environmental protection standards.
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Weaker, less effective government.
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Fewer social programs such as health care and education.
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Less protection for developing industries and countries.
Supporters of globalization say further economic integration has many benefits, among
them: Better access to international markets.
Increased competition
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Cheaper goods and services.
Better mobility for workers.
More efficient markets
More competitive industries
So who's right?
The reality seems to be that globalization can often take both sides. Like technology, it's not a
neutral force.
"Globalization is a phenomenon of paradoxes," says Maureen O'Neill, president of the federal
government's International Development Research Centre. "It is a force of integration – whether
in the WTO, or in the protocols of the Internet, or in the worldwide audience for Hollywood
movies.
"At the same time, it divides us: generation from generation, fundamentalists from modernists,
secessionists from centralizers, rich from poor."
Is it possible to find a balance between globalization's benefits and costs? Supporters say we
must try; opponents say the whole exercise is doomed to failure because those without the power
aren't at the negotiating tables making the decisions.
Globalization's long history
Globalization, if it's measured simply by the flow of money and goods across borders, is obviously
not something new. In the Middle Ages, the Silk Road joined Europe to China in a thriving
example of international commerce. Later, colonial empires were prime conduits of globalization.
The Dutch East India Company carried its precious cargoes of silk, spices and tea from all parts
of the known world in the 17th and 18th centuries. But beginning around 1950, and especially in
the 1980s and 1990s, governments around the world brought in free-market economic policies
that dramatically pushed the globalization agenda forward. The world's leaders declared
themselves solidly behind a trade-liberalized planet. Tariffs and other barriers to trade began
tumbling down as countries and regions negotiated free trade agreements.
This pick-up in globalization was due in no small way to technological advances – everything from
the passenger jet to the internet – that have made it easier for people to travel and do business
beyond their own borders. Writer Thomas Friedman differentiated this modern version of
globalization from the earlier ones. "Farther, faster, cheaper and deeper," he said, and few would
argue with that.
Canada and globalization
Canada is no novice in the globalization drive. Canada and the United States signed a Free
Trade Agreement that took effect in 1989. The two countries later joined Mexico in the North
American Free Trade Agreement (NAFTA), which went into effect in 1994. Canada has also
implemented free trade agreements with Israel and Chile in 1997, and with Costa Rica in 2002.
And we're talking to many more countries.
But it's the effort to expand the globalization effort from bilateral agreements to multi-lateral
behemoths that has attracted the most attention (and the most criticism). And it is these megadeals that are proving especially hard to reach.
Global trade activists want an expanded WTO deal that would lower many of the barriers that
discourage international trade and commerce, saying that would make all of its 146 member
nations richer. At least that's the idea.
But at the round of WTO talks in Cancun, Mexico, in September 2003, the U.S. and the European
Union wouldn't budge on lowering their own huge agricultural subsidies.
Similarly, opposition from Brazil at the FTAA ministerial talks in November 2003 in Miami led to
what some critics call "FTAA Lite" - a decision to allow signatories to opt out of some elements of
the proposed 34-nation agreement.
Many observers say Miami – and especially Cancun – were major setbacks in the goal of a global
trade agreement. In the meantime, more and more countries ( Canada included) are pinning their
trade liberalization hopes on smaller, bilateral treaties.
The debate over how best to manage the international flow of labour, capital, ideas, goods and
services will no doubt continue for years. The decision to trade is easy; trying to write the rule
book is something else again.
Complete the following assignment on the “What Is Globalization?”
1. The article puts forward two opposing definitions of globalization. Which
definition is more accurate and valid when describing the process of
globalization. Be sure to explain and support your response. Make a chart
categorizing the positive and negative impacts of globalization.
2. Mercantilism is an economic concept used to describe historical economic
systems. The premise behind this theory is that nations could only become
strong by accumulating wealth, resources, and capital. Explain how
globalization is a similar historical process.
3. Is Canada contributing to, or resisting, the powerful force of globalization?
Explain.