The document discusses various aspects of global trade, including surpluses and deficits, increasing competition for commodities, and the implications of outsourcing and financial globalization. It highlights the 'race to the bottom' effect on developing countries and the transition from low-value to high-value production through industrial upgrading. Additionally, it examines consumer behavior and the spread of consumption sites while also addressing global resistance against hyperconsumption.

2. OUTLINE
1. TRADE
2.INCREASING COMPETITION
FOR COMMODITIES
3.ECONOMIC IMPACT OF FLOW
OF OIL
4.RACE TO THE BOTTOM AND
UPGRADING
5.OUTSOURCING
6.FINANCIAL GLOBALIZATION
7. CONSUMPTION

4. TRADE SURPLUSES AND DEFICITS
•SURPLUS - IS AN ECONOMIC MEASURE OF A POSITIVE BALANCE OF
TRADE, WHERE THE VALUE OF A COUNTRY'S EXPORTS EXCEED THE
COST OF ITS IMPORTS.
•DEFICIT - IS AN ECONOMIC MEASURE OF INTERNATIONAL TRADE IN
WHICH THE VALUE OF A COUNTRY'S IMPORTS EXCEEDS THE COST OF
ITS EXPORTS.

8. •FOR THE ENTIRE 2018, EXPORTS DECLINED TO $67.5 BILLION,
1.8% LOWER COMPARED TO THE 2017 FIGURE.
•ON THE OTHER HAND, IMPORTS CLIMBED TO $108.9 BILLION,
13.4% HIGHER YEAR-ON-YEAR.

9. GLOBAL TRADE:
ECONOMIC CHAINS AND NETWORKS
•ECONOMIC CHAINS AND NETWORKS INVOLVED IN GLOBAL TRADE
(GARY GEREFFI, 2005):
1. SUPPLY CHAINS
2. INTERNATIONAL PRODUCTION NETWORKS
3. GLOBAL COMMODITY CHAINS
4. GLOBAL VALUE CHAINS

12. •ONE OF THE MOST STRIKING DEVELOPMENTS IN RECENT YEARS
HAS BEEN THE INCREASING GLOBAL COMPETITION FOR VARIOUS
COMMODITIES.
•A COMMODITY IS A RAW MATERIAL OR PRIMARY AGRICULTURAL
PRODUCT THAT CAN BE BOUGHT AND SOLD.

15. •THE INCREASING DEMAND FOR THESE COMMODITIES, AND MANY
OTHERS, IS NO LONGER FUELED MAINLY BY THE NEEDS OF THE
COUNTRIES WE TRADITIONALLY THINK OF AS HIGHLY DEVELOPED (E.G.
THE US, THE MEMBERS OF THE EU, JAPAN), BUT NOW BY MASSIVE
DEVELOPMENT IN OTHER PARTS OF THE WORLD, ESPECIALLY INDIA
AND CHINA.

18. •NOT ONLY DOES GREATER DEMAND LEAD TO HIGHER PRICES, BUT IT
BECOMES HARDER AND HARDER TO FIND ADDITIONAL RESOURCES (E.G.
NEW OIL FIELDS) AND INCREASINGLY DIFFICULT TO OBTAIN THEM.
INCREASING DIFFICULTIES TRANSLATE INTO HIGHER COSTS AND HIGHER
PRICES.

22. •THERE WAS A HUGE INFLUX OF PETRODOLLARS INTO OIL-PRODUCING
COUNTRIES, AFTER 2002 AND ESPECIALLY IN 2007 AND 2008, AS A RESULT
OF THE GREAT RUN-UP IN OIL PRICES THROUGH MID-2008. IN 2000 OIL
EXPORTS EARNED OPEC ABOUT $243 BILLION; BY 2007 IT WAS ESTIMATED
TO RISE TO $688 BILLION.

24. RACE TO THE BOTTOM
•COUNTRIES ARE INVOLVED IN A DOWNWARD SPIRAL OF COMPETITIVENESS.
•THE BASIC ARGUMENT IS THAT FOR LESS DEVELOPED COUNTRIES TO COMPETE
AND SUCCEED IN THE GLOBAL ECONOMY, THEY MUST UNDERCUT THE
COMPETITION IN VARIOUS WAYS, SUCH AS OFFERING LOWER WAGES, POORER
WORKING CONDITIONS, LONGER HOURS, EVER-ESCALATING PRESSURE AND
DEMANDS, AND SO ON.

26. INDUSTRIAL UPGRADING
•NATION-STATES, FIRMS AND EVEN WORKERS MOVE FROM LOW-VALUE TO
RELATIVELY HIGH-VALUE PRODUCTION.
•THIS CAN OCCUR IN FOUR SEQUENTIAL STAGES – ASSEMBLY, ORIGINAL
EQUIPMENT MANUFACTURE (OEM), ORIGINAL BRAND NAME
MANUFACTURING (OBM), AND ORIGINAL DESIGN MANUFACTURING (ODM).

30. •OUTSOURCING - TRANSFER OF ACTIVITIES ONCE PERFORMED BY AN
ENTITY TO A BUSINESS (OR BUSINESSES) IN EXCHANGE FOR MONEY.
•OFFSHORE OUTSOURCING - TRANSFER OF ACTIVITIES TO ENTITIES IN
OTHER COUNTRIES.

33. THE GREAT RECESSION
•THE GREAT RECESSION IS A TERM THAT REPRESENTS THE SHARP DECLINE
IN ECONOMIC ACTIVITY DURING THE LATE 2000S, WHICH IS CONSIDERED
THE MOST SIGNIFICANT DOWNTURN SINCE THE GREAT DEPRESSION.

36. SOVEREIGN WEALTH FUNDS
•SOVEREIGN WEALTH FUNDS - FUNDS CONTROLLED BY NATION-STATES THAT
OFTEN INVEST IN OTHER COUNTRIES.

41. •HYPERCONSUMPTION - BUYING MORE THAN ONE CAN AFFORD.
•HYPERDEBT - OWING MORE THAN ONE WILL BE ABLE TO REPAY.

42. CONSUMER OBJECTS AND SERVICES
•MUCH OF CONSUMPTION REVOLVES AROUND SHOPPING FOR AND
PURCHASING OBJECTS OF ALL KINDS, BUT IN RECENT YEARS AN
INCREASING AMOUNT OF CONSUMPTION RELATES TO VARIOUS SERVICES.
OF PARTICULAR IMPORTANCE IN TERMS OF OBJECTS AND SERVICES IS THE
ISSUE OF BRANDS AND BRANDING.

45. CONSUMERS
•INCREASING NUMBERS OF PEOPLE THROUGHOUT THE WORLD ARE
SPENDING MORE AND MORE TIME AS CONSUMERS. NOT LONG AGO IT WAS
VERY DIFFERENT AS MOST PEOPLE SPENT MOST OF THEIR TIME AS
PRODUCERS.

46. CONSUMPTION PROCESSES
•INCREASING NUMBERS OF PEOPLE KNOW WHAT IS EXPECTED OF THEM AS
CONSUMERS; THEY GENERALLY KNOW WHAT TO DO IN THE CONSUMPTION
PROCESS WHEREVER THEY HAPPEN TO BE IN THE WORLD.
•THIS INCLUDES KNOWING HOW TO WORK THEIR WAY THROUGH A
SHOPPING MALL, USE A CREDIT CARD, OR MAKE A PURCHASE ONLINE.

54. CONSUMPTION SITES
•AMERICAN AND WESTERN-STYLE CONSUMPTION SITES – SHOPPING
MALLS, FAST-FOOD RESTAURANTS, CLOTHING CHAINS, DISCOUNTERS
SUCH AS WAL-MART, DISNEY-LIKE THEME PARKS, LAS VEGAS-STYLE
CASINO HOTELS, INTERNET SITES SUCH AS AMAZON.COM AND EBAY – HAVE
SPREAD THROUGHOUT MUCH OF THE WORLD.

55. GLOBAL RESISTANCE
•THE GLOBAL SPREAD OF CHAIN STORES, THEME PARKS, AND SO ON, HAS
LED TO MANY CONCERNS AND TO RESISTANCE IN MANY PARTS OF THE
WORLD.
•THERE IS FAR BROADER GLOBAL OPPOSITION TO ALL ASPECTS OF
CONSUMPTION, ESPECIALLY HYPERCONSUMPTION.

57. QUESTION FOR DISCUSSION :
EXAMINE THE LINKAGES BETWEEN:
•THE PROCESS OF “RACE TO THE BOTTOM” AND “UPGRADING”
•THE PROCESS OF OUTSOURCING AND THE “ RACE TO THE
BOTTOM”
•HYPERDEBT AND HYPERCONSUMPTION

59. REFERENCES
1. GEORGE RITZER (2011), GLOBALIZATION:THE ESSENTIALS,
WILEY-BLACKWELL, PP. 81 – 105
2.WILL KENTON (APRIL 16, 2018), THE GREAT RECESSION,
WWW.INVESTOPEDIA.COM/TERMS/G/GREAT-RECESSION.ASP