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Economic Globalization

Economic Globalization. CGW 4U0. Transnational Corporations. Formerly called "Multinational Corporations" because they operated in several countries. Transnational refers to the model of operating globally, but also not necessarily being associated with one country.

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Economic Globalization

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  1. Economic Globalization CGW 4U0

  2. Transnational Corporations • Formerly called "Multinational Corporations" because they operated in several countries. • Transnational refers to the model of operating globally, but also not necessarily being associated with one country. • Some transnational corporations have revenues that exceed the GDP of many countries.

  3. A comparison

  4. Can you recognize these symbols? Royal Dutch Shell and the flag of Hong Kong How does Wal-Mart own smiley faces? How is that smiley face more recognizable than the Parthenon? Greece has a slightly higher GDP than Wal-Mart!

  5. Old Core vs. New Core • 94% of the Global 500 (the 500 largest companies in the world) have their headquarters in Old Core countries. • The rest are in New Core countries. • None are headquartered in periphery countries. • An increasing number of companies are based in the BRIC (Brazil, Russia, India, China) group of New Core countries.

  6. Economic Globalization: Good or Bad? • “It’s All Good!” • More products and selection for consumers • More jobs, global economic growth • Stimulates economic development in developing nations • Fast and equitable sharing of recent technological breakthroughs

  7. But… • Critics of economic globalization say: • Loss of local identities and culture • Unclear whose laws apply to massive TNCs • Mostly just Old Core nations getting richer • Promotes low-paying jobs and environmental degradation in developing countries • TNCs force countries to "race to the bottom" to win their business. The country with the worst working conditions gets the factory

  8. Free Trade • Free trade agreements are becoming more and more common around the world • Free trade eliminates tariffs (taxes on imports) • Tariffs make it easier for domestic manufacturers to compete with TNCs • The World Trade Organization (WTO) co-ordinates trade and promotes free trade around the world. • NAFTA and the EU are examples of free trade unions that have been endorsed by the WTO.

  9. Other free trade proposals • APEC (Asia Pacific Economic Cooperation). • An expansion of the existing APEC could become the largest free trade agreement in the world • FTAA (Free Trade Area of the Americas). • Many people want to establish a free trade zone from the North Pole to the Southern tip of Chile (Cuba excluded).

  10. Who benefits from free trade? • Mostly, it is the transnational corporations that benefit. They can maximize profits and sell their products anywhere in the free trade zone without having to pay tariffs on imports. • Consumers benefit because imported products are often cheaper than domestic alternatives. • But, domestic manufacturing suffers as jobs are moved abroad where labour is cheaper. • Workers and environments in developing countries suffer due to the exploitation by TNCs.

  11. Doha Round • WTO trade meetings usually attract a great deal of protesters. • In response to protests in 1999 in Seattle, the WTO met in 2001 in Doha, Qatar (no coincidence that this was in a non-democratic, difficult to access country). • The focus of the Doha Round was: • Freer trade in agriculture, manufacturing and services • Improved protection of intellectual property (music, movies, software) • Fairer trade rules for countries outside the old core.

  12. The “Battle of Seattle” (top and bottom left) • Doha Protesters (top right)

  13. Doha Failure • The Doha Round and subsequent meetings failed to lead to a signed agreement. • New Core countries, led by the BRIC countries and South Africa have finally begun to stand up to the US, EU, and Japan, beginning with the Doha Rounds. • Trade liberalization will only work in the future if it helps all involved, including the developing world.

  14. G7, G8, G20 • The world’s most economically developed nations meet regularly to plot their continued world domination make decisions on global economic issues. • Originally 7 member states, the G20 now consists of 20 old and new core countries. • Collectively the G20 makes up 85% of global GDP and 80% of world trade.

  15. Current G20 Membership • Argentina • Australia • Brazil • Canada • China • France • Germany • India • Indonesia • Italy • Japan • Mexico • Russia • Saudi Arabia • South Africa • South Korea • Turkey • United Kingdom • United States • Plus a rotating European Union spot

  16. June 26th and 27th in Toronto • The next G20 meeting is scheduled to take place in Toronto on June 26th of this year. • Under the theme of “Recovery and New Beginnings,” the G20 Toronto Summit will focus on recovery from the global economic and financial crisis and the implementation of commitments from previous G20 summits, while laying the foundation for sustainable and balanced growth. • Video

  17. "I'd love to read more about this economic globalization stuff!" • Super. • Read chapter 12 in "Global Connections" • Answer questions 1-8 on page 194 • You will then achieve economic globalization nirvana.

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