Different players involved in the development of Globalisation

1. Political and Economic Players in
Globalisation

2. Do you know
• We have access to
• Seneca
• Kerboodle

3. Write down what you know about
• World Trade Organisation
• World Bank
• IMF
THESE WILL BECOME VERY IMPORTANT THROUGHOUT THE HUMAN COURSE

4. Learning Objectives
• To examine the role of the main political and economic
players in globalisation.
• To understand the role of national governments and trade
blocs in managing globalisation

5. WTO in action
• In 1995 Pakistan joined the WTO
• It had to open its waters to international fishing
which created competition
• TNCs began to move in. Huge boats from India
fished their waters. This left them with little left to
fish and poverty grew within the fishing community
• 2013 Charity ActionAid took up their plight and that
fish stocks were dangerously low
• By joining the WTO Pakistan fisherman were now
worse off and many gave up fishing

6. The WTO
• What is it?
• Established in 1945 to promote international economic co-
operation in trade
• Based in Geneva
• It deals with the rules of global trade
1. It aims to ease trade and remove barriers to trade
2. It negotiates trade agreements between countries and make sure
that countries stick to them
What issues do you feel are created by the WTO?

7. These three will be met throughout the
course!
• Turn to page 168 or 195 of
Hodder & 153 of Oxford text
books
• Make notes on each and then
consider the problems they
have

8. Read the case
study.
Write a list of gains
and losses linked to
globalisation.
Mini Case Study -
Ghana

9. The European Union
• Find the answers to the following questions:
• Why did the EU set up a single Currency
• Why did the EU set up the Common Agricultural Policy
(CAP)
• Why is freedom of movement so important to the EU?

10. ASEAN
Suggest reasons for
the growth predicted.
Study Figure 12.19
USING YOUR PHONES:
Find the 5 core principles of the ASEAN
single market and production base

11. What reasons do people join larger economic
groups?
• Allow free trade within member states, therefore,
encourages trade
• No tariffs, taxes or quotas exist
• Countries outside the bloc often have to pay taxes or tariffs
to get products in. They may also have quotas on the
amount they can sell
• These external barriers protect the member countries
• WTO work to reduce trade barriers and create free trade.
The world gets caught between the two
• Trade blocs have become more common as have free
trade agreements
A tariff is a tax imposed
by one country on the
goods and services
imported from another
country.
A Tax is levied by the
government on the cost
of some goods,
services, and
transactions.
A Quota is a limit on the
quantity of a particular
product which can be
imported.

12. Different Types of Trade Blocs

13. Why do the advantages outweigh the disadvantages?
Advantages of trading blocs
1. Lower prices for consumers and greater
opportunity for exporters due to tariff removal
and trade creation
2. increased specialisation due to increased
trade – which gives benefits of economies of
scale (lower average costs from increased
output)
3. Increased FDI and therefore trade opportunities
for countries joining a rich trading bloc. Countries
in Eastern Europe have made considerable
progress in catching up with average income
levels in Western Europe.
4. Increases in trade with countries in close
proximity as lower transport costs and similar
cultural and economic ties.
5. Increased say in global trade agreements for
smaller nations
6. Increased competition. The removal of tariffs
creates greater choice for consumers. Therefore,
domestic firms have a greater incentive to cut
costs to remain competitive
Disadvantages of trading blocs
1. Possible increase in external tariffs – which
leads to trade diversion. Such as loss of trade
from commonwealth countries
2. Loss of sovereignty and independence. A
trading bloc needs to make decisions for the
whole area. This may go counter to the particular
wishes of a country.
3. Increased influence of multinationals. In a
bilateral deal between the US and SE Asian
trading bloc. Free trade may come at the price of
allowing free movement of capital. This can have
benefits in terms of inward investment. But, can
also have costs for higher cost domestic
producers.
4. Unemployment as free trade can lead to can
cause a resource shift from uncompetitive
industries to newer industries.
Review the pros and cons of trade blocs and try
to think of reasons why the UK would leave the
EU given the benefits it gave them.

14. Governments with differing attitudes
• National governments are key players in Globalisation and
they have helped accelerate the growth of TNCs by:
• Free-market liberalisation
• Privatisation
• Encouraging Business start-ups
Make notes and consider:
Page 154-155
How has the UK helped the globalisation process
Make sure you have highlighted any key terms

15. Definitions
• Free-market liberalisation
– Economic liberalisation refers to a country "opening up" to the rest of the
world with regards to trade, regulations, taxation and other areas that
generally affect business in the country
• Privatisation
– The transfer of a business, industry, or service from public to private
ownership and control
– By privatising national companies, it allows for the growth of competition,
removes the burden of costs for the govt and creates wealth
• Business start ups
– Governments can offer small business loans on Lower Interest Rates
– Helpful Resources and Programs
– Give Tax Incentives

16. Have a go

17. Consider the Implications for GB with ‘BREXIT’ and for
Catalonia for their growing demand for independence
• Explain why the UK might wish to leave
the EU?

18. Globalisation in Asia-Pacific

19. Learning Objectives
• Understand the political and economic decisions that have
driven globalisation in new global regions.

20. Special Economic Zones
• One important reason for the acceleration of
globalisation has been the change in
attitudes of areas outside of Europe and the
USA.
• China, India and Indonesia have all
embraced global markets as a means of
development
• All three have established SEZs
• SEZs are industrial areas often near the
coast where they may have:
– Low tax rates
– Exemption from tariffs and export duties
• This helps attract investment and TNCs

21. Indonesia
• Indonesia opened up their economy up during the 1970s
• They built an attractive economic framework for investment
• Instantly companies like Gap and Levi moved in to take
advantage
• The World Bank funded much of this development
– Roads
– Power supplies
• However human rights campaigners now see places like
Jakarta’s SEZ as more of a tax haven for sweatshop
manufacturing

22. India
• India began to globalise in early 1990s due to
financial reforms
• Indian TNCs have grown rapidly
• Tata Steel and Bharti Airtel India’s mobile network
operator has a turnover of US$14 billion with Tata at
US$20 billion
• Until 2013 foreign TNCs could only set up in India if
they went into partnership with a local business
• McDonalds did this but it has deterred many from
moving in.
• As a result, 90% of India’s shops are still family
owned

23. Government Subsidies and Foreign Direct
Investment
• Government Subsidies
• Governments use subsidies to encourage production
and consumption in specific industries however, these are
often disputed as unfair practices especially with the WTO
• Foreign Direct Investment (FDI)
• Is the financial capital flow from one country to another for
the purpose of constructing physical capital, i.e. building a
factory in another country.
Nissan in Sunderland: Nissan with the aid of UK govt built a factory in the NE of England
This helped create 6700 jobs directly
Indirectly it created an estimated 11,000

24. China and its 1978
Open Door Policy
Create a short case study.
Include:
Read page 155 in the Oxford
text book
A timeline detailing the main events since 1978.
A list of the successes that
the policy has had in China.
An explanation of why some
‘doors are still closed’ to
globalisation in China.

26. Working outside of Trade Blocs
• The World Trade Organisation (WTO) desire free trade
however this is not always possible due to trace blocs
• Consider the 3 case studies and Pakistan (152) on pages
156 – 157 of Oxford textbook and consider the pros and
cons of the globalisation of trade
Positive Negative
Ghana Ghana able to sell raw
coca beans to Europe
without tariffs
Ghana could increase its profits if it
were able to sell processed coca
beans that EU do not allow
Vietnam
Guatemala
Pakistan