The+Global+Economy+2

=The Global Economy (Pgs. 1131-1138) =

Economic Globalization Free Trade GATT and WTO Global Corporations -They all are benefiting from ongoing globalization.
 * Establishment of international organizations such as the International Monetary Fund (IMF)
 * IMF began promotion of market economies, free trade, and high growth rates
 * Freedom from state-imposed limits and constraints on trade across borders
 * An issue was, to what extent does free trade enhance the prosperity of a society?
 * General Agreement of Tariffs and Trade (GATT)
 * 23 noncommunist representatives signed the agreement in 1947
 * Later negotiations were held to loosening barriers of free trade
 * The total of 123 members in 1994 decided to make (WTO)
 * World Trade Organization (WTO) which took over the GATT's activities
 * WTO has turned into a forum to settle international trade disputes
 * Have replaced traditional international or multinational forms of corporate enterprises
 * International companies were used to extend business on a global scale
 * There were more perks to a global corporation such as:
 * a small headquarters stakk
 * low operating costs
 * treat the world as a single market
 * Some global corporations include:
 * General Motors
 * Siemens AG
 * Nestle



-General Motors Corporation

Economic Growth in Asia Trading Blocs
 * Economies in east and southeast Asia underwent high economic growth
 * This growth was due to globalization
 * Japan
 * US policies sparked economic revival in Japan
 * Japan benefited from Marshall Plan just as other countries
 * War reparations were pardoned
 * There were no trade restrictions
 * Japan no longer needed to spend money on military protections as the US was helping military protection
 * At first Japan's economy wasn't prepared (it had a large pop. and little resources
 * Economic leaders emphasized economic development and low wages with an export driven economy
 * The labor force was compliant
 * Labor was cheap
 * Japan churned out a lot of manufactured goods
 * <span style="font-family: Arial,Helvetica,sans-serif;">Later Japanese corps. utilized highly trained workforce to create high quality goods
 * <span style="font-family: Arial,Helvetica,sans-serif;">Japanese growth was not as sustainable into the 21st century
 * The Little Tigers
 * Other Asian economies copied Japan: Hong Kong, Singapore, South Korea, Taiwan
 * They suffered from the same problems as Japan, but found the same solutions
 * Soon they came Japan's competitors
 * Later Indonesia, Thailand and Malaysia joined
 * The Rise of China
 * Mao Zedong's economic policies were disastrous
 * Later China's leaders began reversing the other policies and opening up
 * Created Socialist Market Economy
 * The role of the government was limited
 * It was a major exporter and also had cheap labor and enormous domestic markets
 * It has brought in investment from the world
 * Joined World Trade Organization in Deccember 2001
 * Perils of the New Economy
 * Globalization exhibited promise of economic growth
 * Asian tigers however soon went to bust economies
 * This bust was due to an financial crisis in 1997
 * There was much investment in the Asian tigers, and a sudden lack of confidence led to a crash in the markets
 * Soon trade was opened signalling the interdependence of the global economy
 * Many countries created economic alliance with trade to build economic strength
 * European Union
 * The most integrated trading bloc is the European Union
 * The original members (France, West Germany, Italy, Netherlands, Belgium, Luxembourg) formed the European Economic Community in 1957 with the the Treaty of Rome
 * Renamed the European Community in 1967
 * Its goal was trade liberalization
 * It created the Council of Ministers and the European Parliament to work towards European political integration
 * European Union in present form was created in 1993 Maestricht Treaty
 * Originally had 15 nations with common currency (euro)
 * OPEC
 * One of the most effective economic alliance: Organization of Petroleum Exporting Countries
 * Created in 1960 by Iran, Iraq, Kuwait, Saudi Arabia, Venezuela, later joined by Qatar, Libya, Indonesia, Abu Dhabi, Algeria, Nigeria, Ecuador, Gabon
 * They sought raising the price of oil through cooperation and held political power as demonstrrated by the Arab Israeli War when OPEC plunged the world into recession
 * The influence declined in the 80s and 90s as a result of overproduction and disagreement
 * ASEAN
 * Association of Southeast Asian Nations
 * Established 1967 by Thailand, Malaysia, Singapore, Indonesia, Phillipines
 * Sought to accelerate economic development and promote stability
 * It was originally established to stop the spread of communism but took more of an economic focus after Japan joined and cooperdated with the European Community
 * IN 1992 they agreed to a 15 year free trade zone
 * NAFTA
 * The US also needed a regional trrade bloc
 * It entered the North American Free Trade Agreement with Canada and Mexico in 1993
 * It is the second largest free trade zone, though it is looser than the European Union
 * Globalization and Its Critics
 * There is much disagreement over whether globalization is good or bad
 * Supporters say:
 * It will bring prosperity, it is the only way
 * It delivers markets with maximum efficiency
 * Always directs goods to where they are demanded
 * Critics say:
 * It is an unregulated juggernaut that is not desirable
 * It impoverishes many
 * It diminishes national sovereignty
 * Transfers power to transnational corporations and global institutions (WTO, IMF)
 * Rapid economic development leads to environmental destruction, income inequality, cultural assimilation

<iframe frameborder='0' height='404' scrolling='no' src='http://www.meograph.com/embed/cochristiancy/47260/the-european-union' width='560'>