Trade and Globalization

Reading Focus

• How does economic interdependence affect countries around the world?

• What are some patterns and effects of global trade?

• How does globalization lead to cultural exchange?

Main Idea

Trade and culture link economies and lives around the world.

Trade and Globalization

At the beginning of the twenty-first century, the world was divided over a number of political, cultural, and economic issues.

• Despite divisions, countries tied together like never before

• Globalization is force behind closer relationships

– Process in which trade, culture link countries

– Improvements in transportation, communication make global trade easier

Globalization

• Major effect of global trade, increased economic interdependence

– Relationship among countries in which they depend on each other for resources, goods, services

– Occurs because countries vary in goods, services they provide, need

Interdependence

Economic Interdependence

Economy

• Goods, services nation provides and needs depend on level of economic development in that country

• Countries grouped in two categories: developed, developing

Developing

• Less productive economies, lower standard of living; Guatemala, Philippines

• People in these countries lack adequate education, health care

• Poorest, least-developed countries located mostly in Africa, southern Asia

Developed

• Industrialized nations have strong economies, high standards of living

• 20 percent of world’s nations wealthy, powerful like Japan, United States

• Have access to good health care, education, technology

Developed and Developing Countries

Growth and OutsourcingMultinational Corporations • Increasing interdependence and dramatic growth of multinational

corporations—large companies operating in multiple countries

• Benefits to companies

– Outsourcing—having work done elsewhere to cut costs, increase production

– Manufacturing facilities in developing countries, where materials, labor relatively inexpensive

• Outsourcing

– Advocates say: creates jobs and wealth in developing countries

– Critics say: fails to improve standard of living, outsourcing causes job loss in company’s home country

Oil Prices

• All countries depend on oil for energy; rise in prices felt around world

• Developed countries like United States faced with higher costs

• Poor nations in Africa could not afford to import, faced shortages

• Rise in oil prices led to increased demand for alternative energy sources, attempts to reduce consumption

Global Economic Ties

• Certain events, actions can affect economies of many nations

• Global interdependence particularly evident in times of uncertainty

– Early 2000s, price of crude oil rose dramatically

– Factors: rising world demand, concern over available supply

Summarize

How does economic interdependence affect the world?

Answer(s): helps to provide jobs in developing countries, increases production and decreases cost for multinational companies

Globalization often leads to or promotes free trade, the exchange of goods among nations without trade barriers such as tariffs. This can lead to consumers purchasing higher-quality goods at lower prices.

• Many of these groups work to promote, regulate free trade

• 1948, General Agreement on Tariffs and Trade (GATT)

• Worked to limit trade barriers, settle disputes

International Trade Organizations

• 1995, GATT replaced by World Trade Organization (WTO)

• Monitors national trade policies

• Organization of Petroleum Exporting Countries (OPEC) works to control oil production, price

GATT, WTO, OPEC

• Regional trade blocs promote free trade, deal with economic issues of neighboring nations

• European Union (EU), North American Free Trade Agreement (NAFTA), others

Regional Trade

Global Trade

• Opponents argue process benefits wealthy developed nations at expense of developing nations

• Free trade encourages practices that exploit workers, destroy environment

• Some promote fair trade, like fair trade coffee movement guaranteeing fair prices to coffee bean farmers

Anti-Globalization

• Global trade has clear benefits

• Developing countries can provide new, valuable markets for goods, services produced by developed countries

• Technology, services, money from developed nations can improve public services, raise standard of living of developing countries

Benefits

Effects of Global Trade

Find the Main Idea

How does global trade affect the world?

Answer(s): can provide opportunities for developing countries; opponents believe global trade exploits developing nations, supporters believe it provides for the production and sale of high-quality, low cost goods

Culture

• Globalization; countries linked through trade and culture

• Modern transportation, communication allow faster exchanges of ideas, customs

Spread of Traits

• Globalization leads to cultural diffusion, spread of culture traits from one region to another

• Work, travel, permanent moves all play part

Popular Culture

• Globalization leads to changes in popular culture

• Culture traits: food, sports, music common within group of people

Mass Media

• Television, movies, music most powerful methods of cultural diffusion

• Satellite news and Internet also ways of exchanging images, ideas

Cultural Exchange

Negative Effects• Some believe changes largely negative

• Mass media, advertising encourage growth of consumerism, preoccupation with buying consumer goods

World Community• Globalization linking people together through economics, culture

• Challenge to preserve valuable traditional cultures while providing enrichment from other places in world

Media• Opponents say market shaped by media and advertising, not actual needs

• Worry that globalization creating common world culture, allowing traditional cultures to lose uniqueness

Effects of Cultural Changes

Summarize

How is cultural exchange a part of globalization?

Answer(s): leads to cultural diffusion, more travel to other countries for work or vacation, exotic goods from other countries available

Social Challenges

Reading Focus

• How are individuals, groups, and nations working to protect human rights?

• What global challenges do people around the world face?

• What are the causes and effects of population movement?

Main Idea

People and countries are working together to protect human rights, help solve problems such as poverty and disease, and adjust to new patterns of migration.

Social Challenges

• 1948, United Nations issued Universal Declaration of Human Rights

• All people deserve basic rights “without distinction of...race, color, sex, language, religion, political or other opinion, national or social origin, property, birth or other status”

• 1975, Helskini Accords signers agreed to respect human rights

Statements on Human Rights

• Violence, human rights abuses not new

• Globalization has made world more aware

• In recent years, many nations have pledged to respect human rights

Globalization and Human Rights

Human Rights

Human Rights AbusesIn spite of agreements, torture, slavery, killing, other

abuses daily occurrences in some countries

• Most common in countries not democracies or in process of establishing democracy

• Some groups at greater risk than others

– People who disagree with their government

– People who are members of religious, ethnic minority

– Women and children

Protecting Human Rights

• International Red Cross, an NGO that works to improve welfare of women, children, indigenous peoples; played key roles in fights against slavery, violence against women, apartheid

• Human rights usually better protected in democratic countries

• Spread of democracy has led to spread of human rights

Working for Rights

• Many individuals, groups working to improve, protect human rights

• United Nations investigates human rights abuses, works with national governments to protect rights of threatened groups

• Also NGOs, nongovernmental organizations, formed to provide services, promote certain public policies

Make Generalizations

How are human rights threatened and protected?

Answer(s): threatened—torture, slavery, and killing; protected—actions of United Nations, NGOs; increased democracy, globalization

Although globalization is improving the lives of some people, many still face major challenges like poverty, disease, or natural disasters.

• More than 20 percent of world’s people live on less than $1 per day

• Poverty has many causes

– Lack of natural resources

– War

– Poor government planning

– Rapid population growth

• One result—famine, extreme shortage of food

Poverty

• Globalization has made controlling disease challenge for entire world

• International air travel allows disease to spread rapidly

• 2002, SARS pneumonia appeared in China, spread to Asia, Europe, Americas

• Hundreds killed in epidemic, contagious disease outbreak

Disease

Global Challenges

Epidemics• HIV/AIDS another recent epidemic

– Over 25 million have died from AIDS since 1981

– Millions more infected by the disease

• International health organizations, local governments have had some success controlling spread of some diseases

– Education about prevention of disease

– Making medicines cheaper, more available

• December 2004, tsunami devastated large areas of Southeast Asia, killed over 225,000 people

• Many individuals, governments, humanitarian organizations provide aid to regions hit by natural disasters

Aid to Regions

• Hurricanes, earthquakes, floods also affect many areas of world

• Natural disasters cause deaths, destroy homes, businesses

Worldwide Events

Natural Disasters

Summarize

What are some of the challenges facing people around the world?

Answer(s): poverty, disease, natural disasters

The movement of people around the world has increased dramatically in recent years. Some people move in search of better opportunities, while others are refugees, seeking safety in another nation.

• Many factors cause people to migrate to a new place

• Some “push” people to leave homeland

• Others “pull” people to new places

Migration• Push factors that

displace people:

– War

– Persecution

– Poverty

• Pull factors include opportunities for jobs, better life

Push, Pull Factors• Migration changed by

globalization

• Migrants can quickly travel far from home

• Can settle in places very different

• Mixing of cultures can be dramatic

Globalization

Population Movement

Return to Homelands

• Migrants often able to return, visit native countries

• Easier to retain own cultures, languages, habits

• Typical destinations, wealthy developed North American, European nations

Urbanization

• Migration also within countries; people moving from rural to urban areas

• Fastest growing cities in developing countries, slower in developed countries; rapid urbanization main factor in worldwide population movement

Results of Migration

• Often migrants find work, provide better life for selves, families

• Sometimes fail to find jobs, face discrimination in new countries

• Some think newcomers will take away jobs, services from native citizens

Population Movement

Find the Main Idea

What are some main reasons for population movement?

Answer(s): to escape war, persecution, poverty; search for better jobs, education, better life