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Europe in the era of globalisation

Europe in the era of globalisation. WITOLD KWA Ś NICKI Institute of Economic Sciences Faculty of Law, Administration and Economics Wroclaw University http://prawo.uni.wroc.pl/~kwasnicki. An outline of a lecture . Five key debates about globalisation .

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Europe in the era of globalisation

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  1. Europe in the era of globalisation WITOLD KWAŚNICKI Institute of Economic Sciences Faculty of Law, Administration and Economics Wroclaw University http://prawo.uni.wroc.pl/~kwasnicki

  2. An outline of a lecture • Five key debates about globalisation. • From europeanisation to globalisation. • How should we measure globalisation? • The EU and the World Trade Organisation. • European Union and the USA – a short comparative study. • Toward The Global Free Trade Association: A New Trade Agenda. • Europe and the causes of globalisation, 1790 to 2000. • Globalisation and convergence of national economies.

  3. The literature of globalisation (Mauro F. Guillén, 2001)

  4. WHAT IS GLOBALISATION? • Intuitively, globalisation is a process fuelled by, and resulting in, increasing cross-border flows of goods, services, money, people, information, and culture. • Globalisation entails a "compression” of space and time, a shrinking of the world. • Globalisation means increasing interdependence of national economies in trade, finance, and macroeconomic policy. • Globalisation refers both to the compression of the world and the intensification of consciousness of the world as a whole. • Globalisation as the diffusion of practices, values and technology that have an influenceon people’s lives worldwide. • Globalisation as a process leading to greater interdependence and mutual awareness (reflexivity) among economic, political, and social units in the world, and among actors in general.

  5. Five key debates about globalisation • Is It Really Happening? • Does It Produce Convergence? • Does It Undermine the Authority of Nation-States? • Is Globality Different from Modernity? • Is a Global Culture in the Making?

  6. Fromeuropeanisation to globalisation • the European Union seeks to become a power wanting to change the course of world affairs in such a way as to benefit not just the rich countries but also the poorest.

  7. Year European Union Foreign Direct Investment Intra-European Union Investment Percentage of European Foreign Direct Investment in Europe 1985 40 18 45.0% 1986 59 21 35.6% 1987 81 22 27.1% 1988 104 55 52.9% 1989 122 78 63.9% 1990 121 81 66.9% 1991 109 69 63.6% 1992 98 58 59.2% 1993 112 79 65.8% 1994 143 82 57.3% 1995 158 83 52.5% 1996 142 85 59.8% 1997 183 111 60.6% Foreign Direct Investment and the European Union (in billions of dollars)

  8. How should we measure globalisation? • the volume of trade, • trends in total trade, • the ratio of trade to output.

  9. Globalisation IndexA.T. Kearney andForeign Policy Magazine • 13 key indicators of global integration • the full sample of 62 countries

  10. World Trade Organisation Established: 1 January 1995 (but with its predecessor the General Agreement on Tariffs and Trade (GATT) dating back to the 1940s). Membership: 144 countries at the start of 2002, accounting for over 90% of all trade in the world. Rounds: Countries tend to negotiate over several years on new agreements for a group of subjects. These series of negotiations are called ‘rounds’. Examples are theUruguay Round 1986-94 and the round that started in 2001 called The Dohadevelopment agenda. Functions: • Administering WTO trade agreements • Forum for trade policy discussions and negotiations • Handling and resolving trade disputes • Monitoring national trade policies • Technical assistance and training for developing countries • Cooperation with other international organisations.

  11. Unweighted World average tariff (35 countries, %) (Michael A. Clemens, Jeffrey G. Williams, 2001)

  12. Average unweighted tariff rates by region (World Bank)

  13. The EU and the World Trade Organisation • the world’s leading exporter of goods: over 973 billion euro in 2001, almost a fifth of the world total; • the world’s leading exporter of services: 291 billion in euro 2000, 23.9% of the world total; • the world’s leading source of foreign direct investment (362 billion euro in 2000) and the second largest home for foreign investment (176.2 billion euro in 2000) after the United States (304.9 billion euro) • the main export market for some 130 countries around the globe; • a relatively open economy: international trade accounted for over 14% of its gross domestic product in 2000, compared with 12% for the United States and 11% for Japan.

  14. The EU and the World Trade Organisation EU trade policy works on two complementary levels: • the multilateral level refers to the system of trading rules agreed by all WTOmember countries world-wide; • the bilateral and regional level means trade between the EU and individualtrading partners or with groups of countries that form a single trading bloc in aparticular region of the world.

  15. The EU and the World Trade Organisation The aims of the EU’s work in theWTO effort are: • to open up markets in goods, services and investment in accordance with clear rules and following a timetable that enables all countries to implement them; • to make the WTO more open, accountable and effective by engaging in discussion with other groups and organisations; • to bring developing countries fully into the WTO’s decision-taking processes, helping them to integrate with the world economy.

  16. Trade partner Imports into the EU (million EUR) Exports from the EU (million EUR) Percentage of total trade (imp+ exp) EU global trade 1022693 935283 100 1. United States 196956 230947 21.9 2. Japan 85009 44697 6.6 3. Switzerland 58186 70169 6.5 4. China 69676 25289 4.9 5. Norway 45543 25374 3.6 6. Russia 44980 19763 3.3 7. ACP Group 26333 28551 2.8 EU trade: the big players

  17. Goods Services United States of America 20.8 % 21.2 % EU 18.8 % 23.8 % Candidate countries 4.1 % 3.8 % Japan 8.8 % 8.2 % Asia: ASEM excluding Japan 11.2 % 11.2% Rest of the world 17.8 % 23.7 % Latin America excluding Mexico 4.0 % 3.2 % Canada and Mexico 9.3 % 4.9 % The EU and the USA – share of the world trade

  18. Europan Union USA Share in the World production 30.9% 30.5% Inhabitants 380 mln 290 mln Average growth rate in the last 20 years 2.3% 3.3% The EU and the USA

  19. The EU and the USA – share of the world production

  20. Free trade agreements • North American Free Trade Agreement(NAFTA; USA, Canada and Mexico since 1994) • European Union (now 15 countries, since 1992) • Free Trade Area of Americas (FTAA; since 2005, 34 countries) • Association of Southeast Asian Nations (ASEAN) and China (since 2010, seven countries, 1.7 mld inhabitants)

  21. The Global Free Trade Association • The GFTA must be a voluntary and inclusive association, with membership based solely on a country's demonstrated commitment to a liberal trading order.

  22. The Global Free Trade Association • Each prospective member country must have demonstrated its ability and willingness to meet specific criteria of openness to trade, such as those employed in The Heritage Foundation/Wall Street JournalIndex of Economic Freedom, which annually evaluates over 160 countries on 10 specific factors. • Four of these Index factors, taken together, constitute a sound measure of the openness of a country's markets: • Trade policy, • Capital flows and foreign investment, • Property rights, and • Regulation.

  23. (The Heritage Foundation, 2001)

  24. Globalisation and growth

  25. Globalisation and growth (Charles W. Calomiris, 2002)

  26. Globalisation and growth (World Bank)

  27. Europe and the causes of globalisation, 1790 to 2000 • the most impressive episode ofinternational economic integrationwhich the world has seen to date was not the second half of the 20th century, but the years between 1870 and the Great War. • capital markets became much more integrated in the late 19th century, reaching extremely high levels of integration in 1913; they disintegrated during the interwar period, and are only now recovering the levels of integration experienced in 1913

  28. Europe and the causes of globalisation, 1790 to 2000 (Kevin H. O’Rourke,2002)

  29. Globalisation and convergence (Federal Reserve Bank Of Dallas)

  30. Long-term convergence among OECD countries (World Bank)

  31. The World’s ‘Convergence Club’ ca. 1850 (Steve Dowrick, J. Bradford DeLong. 2001)

  32. The World’s ‘Convergence Club’ ca. 1900 (Steve Dowrick, J. Bradford DeLong. 2001)

  33. The World’s ‘Convergence Club’ in the interwar period (Steve Dowrick, J. Bradford DeLong. 2001)

  34. The World’s ‘Convergence Club’ in the recent years (Steve Dowrick, J. Bradford DeLong. 2001)

  35. Future of globalisation and liberalism (Witold Kwasnicki. 2000)

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