The increasing interconnectedness of the world economically, culturally and politically. The current phase developing out of internationalisation.
Globalisation as a concept refers both to the compression of the world and the intensification of consciousness of the world as a whole. (Robertson 92)
A social process in which the constraints of geography on economic and cultural arrangements recede, in which people become increasingly aware that they are receding and in which people act accordingly. (Waters)
*Wimbledon tennis ball – product of materials and labour from at least 10 different countries. Factory in the Philippines, rubber from Malaysia, Tin from Indonesia.
*McDonalds – 31,000 restaurants, in 121 countries, with 46mn customers a day. Annual revenues = $40bn. 1 in 8 Americans has worked in McDonalds, Third of US cows are used for the burgers and 8% of the US potato crops are used for the chips.
*Wal-Mart – Profits in 2002 +$8bn. 3,200 stores in the US and 1,100 abroad. Has bought Germany’s Wertkauf, UK’s ASDA and 34% of Japan’s Seiyu. Will create 800,000 jobs in the US (2003-8) and employs 1.3mn worldwide.
Use the source below to explain how the EU is involved
Trade globalisation favours the appearance of impulse centres where controlling functions, banks and stock exchanges, company head offices, R&D are concentrated.
The best example of this is the TRIAD (the 3 main economic hubs and great political centres: North America, Western Europe, the Far East with Japan.
Note not all spaces belonging to the Triad are dynamic. All the powers belong to only a few big megalopolises (NY, Tokyo, London, Paris, The Rhine-Ruhr). Minor centres make the hierarchy complete ( American sun-belt, Randstad-Holland, Singapore)
How does this source also show the EU’s role in Globalisation?
An important feature of world trade has been the emergence of trading blocs, i.e. countries which choose to trade together as a group e.g. EU, NAFTA, ASEAN.
The advantages are that countries may trade freely without paying duties, or tariffs, on goods produced with the same bloc. To countries outside the bloc there may be tariffs to pay on imported goods.
The EU goes further and permits the free movement of people within the countries & it also has its own currency.
The Global Triad European Union 28% Global Manufacturing 39% Global exports NAFTA 29% global manufacturing 18% global exports APEC 30% Global manufacturing 23% Global exports $170,140m $179,710m $286,240m $171,090m $128,110m $148,110m
EU favours buying bananas from former colonies rather than from cheapest source. The WTO has upheld USA complaint and sanctions have been placed on EU goods. This means some goods going into the USA from the EU are subject to 100% duties.
EU vs USA
‘ China & the EU can strike a bargain’ Peter Mandelson July 2006
In negotiations on the creation of a Common Market, France insisted on a system of agricultural subsidies as its price for agreeing to free trade in industrial goods.
To increase productivity
To ensure fair living standards for the agricultural community
To stabilise markets
To ensure availability of food
To provide food at reasonable prices
The Common Agricultural Policy began operating in 1962, with the Community intervening to buy farm output when the market price fell below an agreed target level.
This helped reduce Europe's reliance on imported food but led before long to over-production, and the creation of "mountains" and "lakes" of surplus food and drink.
The Community also taxed imports and (from the 1970s onward) subsidised agricultural exports. These policies have been damaging for foreign farmers, and made Europe's food prices some of the highest in the world.