1GlobalizationJames, Theresa, TylerGlobalization Policy There is no U.S. Globalization policy at present, however there are tax policies, foreign policies, and trade policies that support globalization, which in turn greatly influences the economy.Globalization Amazingly for so widely used a term, there is no precise, widely-agreed definition. A process of rapid economic integration between countries. (ILO) the increased mobility of goods, services, labor, technology and capital throughout the world. (Canadian Government) History of Globalization The characteristics of globalizationoMaking distances shorteroInteraction from different regions The basic transitional stages of globalizationoAgricultural stageoIndustrial stageoTechnological stageThe Agricultural & Industrial Stages/Revolutions During 1700s-1800s in England The different transformations from the agricultural stage to industrial stageoFactory system-MechanisationoMigration to different areasoChange of populationoThe different kinds of concernsThe Major changes of a World Trading System The tendencies of outward looking during fifteen century The discovery of America The passage to the East Indies The beginning the proto-globalization of Europe by the seventeenth century2The industrial Revolution in 1800 The very early forms of globalization Established transport in different ways Having more connections with other countries The promoting to globalization by different factorsoPriceoPopulationoEmigrationThe Repeal of the Corn Laws in 1846 The step forward for global free trade The purposes of the Corn laws The agricultural products became imported “Competitive Advantage”The First Age of Globalization 1860s The new technologies Providing communications linksThe Dark age of Globalization The cost of the wars  Post-1918 oInflation in different countriesoThe problem of trading partnersoNo international intentionThe Union of Soviet Socialist Republics in 1920sThe rise of Asia for Globalization After 1945 The key country Japan The globalization in TaiwanoLocalization/indigenizationoThe economic perspectiveThe future of globalization-ChinaForms of Globalization In recent years a quickly rising share of economic activity in the world seems to be taking place between people who live in different countries(rather than in the same country). This growth in cross-border economic activities takes various forms:3Forms of Globalization International Trade: A growing share of spending on goods and services is devoted to imports from other countries. And a growing share of what countries produce is sold to foreigners as exports. Among developed countries the share of international trade in total output (exports plus imports of goods relative to GDP) rose from 27 to 39 percent between 1987 and 1997. For developing countries it rose from 10 to 17 percent. Free Trade an idealized market model, often stated as a political objective, in which trade of goods and services between countries flows unhindered by government-imposed prices or tariffs.  Whenever a country has a free trade economic policy, there will be some level of globalization. Is free trade helping the lives of ordinary people? How much is too much globalization?Tariffs A tariff is a tax on foreign goods. When a ship arrives in port a customs officer inspects the contents and charges a tax according to the tariff formula. Since the goods cannot be landed until the tax is paid it is the easiest tax to collect, and the cost of collection is small. Tariffs Some economic theories hold that tariffs are a harmful interference with the individual freedom and the laws of the free market. They believe that it is unfair toward consumers and generally disadvantageous for a country to artificially maintain an inefficient industry, and that it is better to allow it to collapse and to allow a new one to develop in its place. World Trade Organization the World Trade Organization aims to reduce tariffs and to avoid countries discriminating between other countries when applying tariffs.  WTO is an international, multilateralorganization, which sets the rules for the global trading system and resolves disputes between its member states.WTO Continued… The stated aim of the WTO is to promote free trade and stimulate economic growth. Many people argue that free trade does not make ordinary people's lives more prosperous but only results in the rich (both people and countries) becoming richer. WTO treaties have also been accused of a partial and unfair bias toward multinational corporations and wealthy nations. Support for actively promoting more “free trade” in the U.S. has dropped from 57% in 1999 to 28% in 2004.4U.S. Trade Deficit Annual rate of $800 billion The balance of trade (or net exports) is the difference between the monetary value of exportsand imports in an economy over a certain period of time. A positive balance of trade is known as a trade surplus and consists of exporting more than you import; a negative balance of trade is known as a trade deficit or a trade gap. The difference in how much we buy from other countries to how much they buy from us.September 2006Trade Deficit Trade with ChinaTrade Partners Foreign Exchange Rates $1.2 trillion is exchanged on world currency markets daily. $1=8.09CNY $1=0.76Euro $1=1.13Cad $1=115.9Jpy $1=0.52Gbp5Forms of Globalization Foreign Direct Investment (FDI). Firms based in the U.S. increasingly make investments to establish and run business operations in other countries.  US firms invested $133 billion abroad in 1998, while foreign firms invested US$193 billion in the US.  Overall world FDI flows more than tripled between 1988 and 1998, from $192 billion to $610 billion, and the share of FDI to GDP is generally rising in both developed and developing countries. This is now the largest form of private capital inflow to developing countries. Forms of Globalization Capital Market Flows. In many countries (especially in the developed world) savers increasingly diversify their portfolios to include foreign financial assets (foreign bonds, equities, loans), while borrowers increasingly turn to foreign sources of funds, along with domestic ones. While flows of this kind to developing countries also rose sharply in the 1990s, they have been much more unstable than either trade or FDI