Political and economic decision making have contributed significantly to the acceleration of globalization in recent decades. National governments have promoted globalization by establishing trade blocs like the EU and ASEAN to encourage free trade. International organizations such as the IMF and WTO also promote globalization through policies aimed at liberalizing trade and encouraging foreign direct investment. Finally, individual countries have established special economic zones and offered subsidies to attract foreign businesses and further increase global integration.

1. 3.2 Political and Economic Factors in
the acceleration of Globalisation
By the end of this lesson
you will have:
• Seen how governments
can be key players in
promoting trade blocs
• Learnt examples of
trade blocs
• Looked at special
economic zones

3. Globalisation – Enquiry Question 1
• What are the causes of Globalisation and why has it
accelerated in recent decades?
3.2 Political and economic decision
making are important factors in the
acceleration of globalisation.
a. International political and economic organisations (P: role of World
Trade Organization (WTO), International Monetary Fund (IMF), World
Bank) have contributed to globalisation through the promotion of free
trade policies and foreign direct investment (FDI).
b. National governments are key players in terms of promoting free trade
blocs (P: role of European Union (EU), The Association of Southeast Asian
Nations (ASEAN)) and through polices (free-market liberalisation,
privatisation, encouraging business start-ups). (P: role of governments in
economic liberalisation)
c. Special economic zones, government subsidies and attitudes to FDI
(China’s 1978 Open Door Policy) have contributed to the spread of
globalisation into new global regions (P: role of governments in
attracting foreign direct investment (FDI))

4. The Big Picture
Globalisation
• 3.1 How globalisation is a long standing process
• 3.2 The political and economic factors associated with
globalisation
• 3.3 The affect of globalisation on some places and organisations
• 3.4 The global shift and how this has created winners and losers
• 3.5 Economic migration and the impact of this on the physical
environment
• 3.6 The emergence of global culture
• 3.7 The increase of development in some countries and how this
has created disparities
• 3.8 The social, political and economic tensions which arise from
globalisation
• 3.9 Ethical and environmental concerns about unsustainability

5. Starter – Re-Cap
• Describe how the economies of different
nations are linked together by:
• i) The IMF
• ii) The WTO
• (4marks)

6. Starter – Re-Cap
• Describe how the economies of different nations are
linked together by:
• i) The International Monetary Fund links the economies of
different nations together by borrowing money from richer
countries and using this to fund poorer countries, in turn
asking for the poorer countries to run free market
economies. The link is then expanded when TNCs (often
based in richer countries) can then move more easily into
the poorer countries. ii) The World Trade Organisation links
global economies by advocating trade liberalisation. This
links the economies because as free trade is promoted and
TNCs create spatial division of labour whereby labour costs
are low in poorer countries and skilled management jobs
are based in higher jobs. For example, Nike headquarters
are based in America but their minimum wage production
is largely based in Indonesia.

7. Key Government Policies
• There are key government policies that are
adopted to accelerate globalisation and wealth:
• Free-market liberalisation – remove ‘red tape’
and the wealth will trickle down. The government
shouldn’t intervene in trade
• Privatisation – sell off public goods to private
investors to save money
• Encouraging business start ups – to increase
trade and wealth. Change laws and lower taxes.

8. Why countries group together
Trade blocs exist for trading purposes; bring economic strength
and security to nations.
Free trade is encouraged by the removal of internal tariffs and
can also protect members by establishing a common external
tariff for foreign imports. This ensures that it is more expensive
to import goods and therefore customers will prefer to purchase
trade bloc goods instead.
The EU has also integrated a common currency, the euro with
some shared political legislation e.g. European Parliament
established in 1979.
How national governments promote
free trade through trade-blocs

9. DISADVANTAGES - BENEFITS - Removal of internal
tariffs allows:
- Markets to grow – in 2004 ten new
nations joined the EU and Tesco gained
access to 75m extra customers
- Firms that have a comparative
advantage should prosper e.g. French
wine-makers have advantages due to their
climate and soil
- Enlarged market increases demand
raising the volume of production and
lowering manufacturing costs =
economies of scale means products can
be sold more cheaply and sales rise even
further.
- Smaller national firms within a trade bloc
can merge to form TNCs therefore making
their operations more cost-effective
- In the EU, members are eligible for EU
Structural Funds to help develop their
economies

10. Trade Blocs
• NAFTA
• EU
• CARICOM
• ASEAN
• Use page 170 of the textbook to help you colour
these trade blocs on your world map. Use a
different colour for each trade bloc and label
them.

11. Trade Blocs
• TASK: Read page 170 of the textbook
• TASK: Use page 172 of the textbook to
complete your graphic organiser on trade
blocs

12. EU and Brexit
• TED Talk
• Brexit: Channel 4

14. Special Economic Zones
• A special economic zone (SEZ) is an area in
which business and trade laws differ from the
rest of the country. SEZs are located within a
country's national borders, and their aims
include: increased trade, increased
investment, job creation and effective
administration.

15. China’s SEZ
• Q. Why do you think
China’s SEZs are
based where they
are?
• A. They are near the
ports (trade exports
and imports)

16. FDI World Bank WTO
Recap plenary- pick at least 4
words from the selection below &
explain them!
Blue = 1 point each
Red = 2 points each
Black = 3 points each
EU Timeline Special Economic
Zones
Trickle Down
Trade
Liberalisation
Shrinking World Bretton Wood’s
Players