Midterm Exam Lecture Notes
Midterm Exam Lecture Notes
Lecture Notes
A. Approaches of globalization
1. Globaloney
Several scholars contend that the existing accounts on globalization are incorrect,
imprecise, or exaggerated. Hence, they suspect that such general observations often
amount to little more than “globaloney” (Veseth, 2010). Baloney is a term that has
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The arguments of these globalization critics fall into three broad categories: a)
rejectionists, b) skeptics, and c) modifiers. Rejectionists dispute the usefulness of
globalization as a sufficiently precise analytical concept. Their arguments typically
originate from within a larger criticism of similarly vague words used in academic
discourse. Skeptics pointed out the limited nature of globalizing processes. Modifiers
dispute the novelty of the process, implying that the label ‘globalization’ has often been
applied in a historically imprecise manner. They argue that those who refer to
globalization as a recent process miss the bigger picture and fall prey to their narrow
historical framework.
2. Economic process
● The increasing linkage of national economies through trade, financial flows, and
foreign direct investment by multinational firm.
● Effects
● Rapid development around the world
● Rise in wages and increased social services
● International trade
3. Political process
● Successful mobilization of political power allows forces of globalization to be
unleashed.
● Globalization is a long-term, technology-driven process whose contemporary
shape has been politically determined by the world's most powerful nations.
4. Cultural process
● Globalization is a densely growing network of complex cultural interconnections
and interdependencies that characterize modern social life.
○ culture is transmitted
○ dominant cultural global context tends to influence local lives
○ international media
● Perspectives on Global Flows of Culture:
○ Cultural differentialism - ‘catastrophic collision’ among different cultures
○ Culture hybridization – cultural borrowing
○ Cultural convergence - convergence of cultural ideas between/among
cultures
● Age of Exploration
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Perhaps one of the turning points in the history of globalization was during the Age of
Exploration which began in the early 15th century. This was pioneered by the European
superpowers: Portugal, Spain, France, and England. This was the time when European
countries were seeking new trade partners hence paved the way in search for new
trade routes.
A. Silk Road
The Silk Road is an infamous network of routes used by traders. It connected East Asia
(China) and Europe during the Middle Ages. Famous Chinese commodities like silk,
porcelain, and spices traveled the Silk Road in exchange of horses, glassware, textiles
and other European manufactured good (National Geographic Society, 2022).
Alongside goods, religion and ideas also fluidly spread like wildfire. This
exchange of ideas between diverse cultures gave rise to new technological
development that would soon change the world.
Another famous trade routes that many believed to have paved the way for globalization
was the Spice Routes, also known as Maritime Silk Roads. With the dramatic
improvements in Europeans navigational skills, many expeditions were set up to travel
further in search of new trade routes. For example, Christopher Columbus voyage to the
New World in 1492 and the famous voyage of Ferdinand Magellan between 1519 and
1522 in search of Spice Island and bumped into the Philippines in Asia.
The Manila – Acapulco, popularly known as the Galleon Trade, during the
Spanish colonization of the Philippines was believed to be a perfect image of the
international trading system. The goods from Manila were sent to European markets
and vice versa. This trade lasted for 250 years.
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Furthermore, the impact of globalization continued its journey through the Age of
Revolution. The Industrial Revolution was remarkable in the history of markets since
it led to the growth of mass production and the establishment of a global economy. With
the expansion of international commerce, markets have become more linked and
complicated, trading a wider range of products and services (Vallarino, 2023). Some
features of the Industrial Revolution include the use of new energy resources such as
coal, the use of steam engines, invention of machines, the birth of factory system, and
the increasing application of science to industry.
The first, second, third and fourth industrial revolutions are different phases of
technological and economic development that have transformed the world in different
ways. Here are some of their main characteristics:
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The first age of globalization started from 1870 to the outbreak of World War I in 1914.
Great Britain dominated the world geographically with the establishment of the British
Empire and technologically with innovations and use of steamships, railroads, weaving
machine, the telegraph, and other breakthroughs. It was the era of the First Industrial
Revolution.
The first industrial revolution (IR 1.0) started in the late 18th century and lasted until the
mid-19th century. It was driven by the use of steam power, mechanization, and textile
production. It led to the growth of factories, railways, and urbanization.
The second great wave of globalization rose out of the ashes of the Second World War
(1945 – 1980). It was spearheaded by the United States of America. The second wave
benefitted from major technological breakthroughs from the Second Industrial
Revolution like cars, jet planes, television, communication satellites (Vanham, 2019).
The second industrial revolution (IR 2.0) started in the late 19th century and lasted until
the early 20th century. It was driven by the use of electricity, steel, chemicals, and mass
production. It led to the development of industries, automobiles, telephones, and
consumer goods.
The third great wave of globalization, from the 1980s to the present. Third Industrial
Revolutions brought about rapid advances in information and communications
technologies (ICTs) such as the Internet, World Wide Web, cell phones, and other
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The third industrial revolution (IR 3.0) started in the mid-20th century and lasted until the
early 21st century. It was driven by the use of computers, digitalization, and information
technology. It led to the emergence of the internet, software, biotechnology, and
globalization.
The fourth industrial revolution (IR 4.0) started in the early 21st century and is still
ongoing. It is driven by the use of artificial intelligence, robotics, nanotechnology, and
biotechnology. It is expected to lead to the creation of smart systems, cyber-physical
systems, and new forms of social interaction.
C. Regionalization
Regionalization is the societal integration and often undirected process of social and
economic interaction among countries in the same region.
Regionalization x Regionalism x Globalization
Regionalization is the societal integration and often undirected process of social and
economic interaction among countries in the same region.
Regionalism is the formal process of intergovernmental collaboration between two or
more states.
Globalization is the increasing interconnectedness among nations from various parts of
the world.
Globalization is seen as to have failed in addressing transnational security and political
issues.
▪ It appears to be selective as some countries benefit from integration while others
suffer from it.
To preserve economic, political, and cultural stability, the states have responded
through regionalization or forming regional blocs.
▪ Regionalization has risen to address the weakness and shortcomings of globalization
LESSON 2 – Drivers of globalization
A. Trade flows
B. Knowledge flows - •The spread of ideas, values, norms, and lifestyles across
borders.
C. Cultural flows -
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D. Political flows - Liberalized trading rules and deregulated markets lead to lowered
tariffs and allow foreign direct investments in almost all over the world.
E. Technological flows - Technology shaped and set the foundation for modern
globalization.
CHAPTER 2 – GLOBALIZATION AND WORLD POLITICS
LESSON 1 – The International System
International System is a concept for analysis or description of international politics or
relations, but therein lies a sense of prescription for diplomatic or military action too.
According to Hedley Bull he defines:
a system of states (or international system) is formed when two or more states have
sufficient contact between them, and have sufficient impact on one another’s decisions,
to cause them to behave—at least in some measure—as parts of a whole.
Joseph Frankel described the International System as “a collection of independent
political units, which interact with some regularity.” (Guruge, 2015). In other words, the
international system refers to the comprehensive global context in which states operate.
The international system reflects all aspects of economic, political, social, cultural,
ecological, and other forms of interaction that exist among states.
Structure of the International System
Structure is a set of overarching principles, rules, roles, and constraints that bind actors
together into a larger system.
● Structure plays a crucial role in organizing and ordering actors within the system.
● It also has a significant influence on the interests of actors and how they respond
to each other within the system.
● The elements of structure exist independently of any one actor in the system.
International structures can be categorized based on two key attributes: the relative
importance of material or ideational components and whether the structure
constraints the behavior of actors or constitutive prominent characteristics of
actors, such as their interests or identity.
A. Five evolutionary periods of international system
1. Classical Period
The Peace of Westphalia was a series of treaties signed in 1648 that ended the Thirty
Years’ War and the Eighty Years’ War between Spain and the Dutch. Peace was
negotiated in the Westphalian towns of Münster and Osnabrück. The treaty is widely
regarded as the foundation of the modern international order, characterized by the
coexistence of sovereign states that do not acknowledge any superior power. The treaty
also established the principle of territorial sovereignty, which means that each state has
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exclusive control over its territory and domestic affairs. This principle has been a
cornerstone of international relations ever since.
2. Post-classical Period
The Congress reorganized Europe’s political boundaries and restored many of the
monarchies that had been overthrown by Napoleon.
The Congress established a balance of power among the major European powers,
which helped to prevent another major war in Europe for almost a century.
The Congress established the principle of legitimacy, which meant that rulers who had
been deposed by Napoleon were restored to their thrones.
The Concert of Europe was a series of international meetings held between 1815 and
1914, which aimed to maintain peace and stability in Europe. The Concert was based
on the principle of balance of power, which meant that no single country could dominate
Europe. The Concert helped to prevent major wars in Europe for almost a century. It
also established a system of international diplomacy that helped to prevent conflicts
between nations.
The Concert of Europe was established after the Congress of Vienna in 1815 with the
aim of maintaining peace and stability in Europe.
The Concert helped to prevent major wars in Europe for almost a century.
3. Transitional Period
World War I was an international conflict that lasted from 1914 to 1918. It was fought
between the Allied Powers, which included Great Britain, France, Russia, Italy,
Romania, Canada, Japan, and the United States, and the Central Powers, which
included Germany, Austria-Hungary, Bulgaria, and the Ottoman Empire. The war was
triggered by the assassination of Archduke Franz Ferdinand of Austria-Hungary in 1914.
The war saw unprecedented levels of carnage and destruction due to new military
technologies and trench warfare.
More than 16 million people—soldiers and civilians alike—were dead by the time
the war ended with the victory of the Allied Powers.
The war marked the end of several empires and monarchies in Europe.
The Treaty of Versailles, signed in 1919, imposed heavy penalties on Germany and
is widely regarded as a contributing factor to World War II.
World War II was a global conflict that lasted from 1939 to 1945. The war involved the
majority of the world’s nations, including all of the great powers, and was fought in two
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opposing military alliances: the Allies and the Axis. Here are some highlights of World
War II:
The war saw unprecedented levels of carnage and destruction due to new military
technologies and trench warfare.
More than 85 million people—soldiers and civilians alike—were dead by the time the
war ended with the victory of the Allied Powers.
The Treaty of Versailles, signed in 1919, imposed heavy penalties on Germany and is
widely regarded as a contributing factor to World War II.
The United States dropped atomic bombs on Hiroshima and Nagasaki in Japan in
August 1945, leading to Japan’s surrender and the end of the war.
The Cold War was a period of geopolitical tension between the United States and the
Soviet Union that lasted from the end of World War II in 1945 until the collapse of the
Soviet Union in 1991. The conflict was waged on political, economic, and propaganda
fronts and had only limited recourse to weapons. Here are some highlights of the Cold
War:
The Cold War began after World War II and lasted until the early 1990s.
The Cold War was characterized by a nuclear arms race between the United States
and the Soviet Union.
The Cold War saw several proxy wars, including the Korean War, the Vietnam War,
and the Soviet-Afghan War.
The Cold War also saw several crises, including the Cuban Missile Crisis in 1962.
The Cold War ended with the collapse of the Soviet Union in 1991.
Under the impact of the Second World War several changes came to characterize
international relations which continue to be operative even with the changes that
came during the last two decades. The USA continues to be a superpower. NATO
continues despite the end of the Cold War and the Warsaw Pact. Nuclear weapons
along with their impact continue to be the factor of international relations, though
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The era of imperialism and colonialism has ended and yet neo-colonialism has
come to characterize the relations between the former colonial masters (the
developed and rich states of the North) and the new states (the developing and
poor states of the South). Humankind fully realizes the dangers of a future world war
and yet local wars and ethnic conflicts continue to characterize international
relations. Rise of several new Asian and African actors and the resurgence of the
Latin American states have come, marking an end of the era of imperialism and
colonialism and yet the evils continue to operate in new forms of Neo-colonialism
and new imperialism.
Trends towards international integration are distinctly visible from increased regional
cooperation, global cooperation, and South-South cooperation (South Commission,
G-8, G- 24, G-25, etc.) and yet the sovereign nation states system continues. The
non-state actors have come to play a bigger role in shaping international relations.
International economic relations have gained tremendous importance and yet
political relations continue to determine the course of international relations.
A. Nation-states
Territoriality- Territorial jurisdiction is the power of the state that affects persons,
property, and conditions within its internationally recognized boundaries. This applies to
their handling of criminal activities according to the laws of the land within their
boundaries.
Diplomacy- the chief instrument of foreign policy. Foreign policy refers to how a
government deals with other countries.
B. Non-state Actors
There are two most important factors that a country considered in dealing with other
countries:
a. National Interest- National interests are those things that states could do or
seek to protect or achieve vis-à-vis other states. There are two types of national
interests:
1. Vital national interests – those for which a state is normally willing to fight
immediately or ultimately. Examples are the protection of existing territories and
preservation of their prestige from a massive loss of face.
2. Secondary interests – cover all the numerous desires of individual states that
they would like to attain but for which they will not fight. Secondary interests are the
stuff of diplomatic compromise. One interest can be obtained by giving up another in
negotiation.
Types of power
1. Military power- Military power refers to the ability of a country to use its military
forces to achieve its objectives. Military power can be measured in terms of the size of a
country’s military, the quality of its weapons and equipment, and the training and
experience of its soldiers.
2. Economic power- Economic power refers to a country’s ability to use its economic
resources to achieve its objectives. Economic power can be measured in terms of a
country’s gross domestic product (GDP), trade balance, and access to natural
resources.
4. Soft power- In international politics, soft power is the ability to co-opt rather than
coerce other countries through appeal and attraction. Soft power is non-coercive and
uses culture, political values, and foreign policies to enact change. Joseph Nye of
Harvard University popularized the term in his 1990 book, Bound to Lead: The
Changing Nature of American Power. According to Nye, a country’s soft power rests on
three resources: its culture (in places where it is attractive to others), its political values
(when it lives up to them at home and abroad), and its foreign policies (when others see
them as legitimate and having moral authority).
combining informal and formal values, rules, procedures, policies and various types of
organizations. In addition to these types of arrangements, more formal measures can
be utilized, such as international law and treaties. Ultimately, the result is order, stability,
and predictability on a global scale (Weiss, 2013).
A. Theoretical Foundation of Global Governance
a. Liberal Institutionalism
Liberal institutionalists believe that states need to cooperate through IGOs to prevent
cheating or taking advantage of other states, anarchy, and unequal gains from
cooperation, as well as to maintain “stability” through “collective security” (Keohane and
Martin, 1995, p. 394). Collective security is based on the notion that an approach of “all
against one provides more stability” than an approach of “each for his own,” where
stability is defined as the “absence of major war” (Kupchan and Kupchan, 1995, 397-
398). Collective security deters other states from violating laws and does not focus on
individual security and peace, but that of the state. IGOs are instrumental in facilitating
global harmony and the prevention of anarchy because they promote global governance
that is equitable for states with common needs and interests. Therefore, the incentive
for states to cooperate in developing and achieving collective goals is high.
b. Realism
Realists reject the belief that a global world economy has gained more significance than
political boundaries and national governments (Gilpin and Gilpin, 2001). They believe
that the nation-state is the prevailing actor in domestic and international economic
affairs (Gilpin and Gilpin, 2001). Although IGOs exist, realists view national
governments as the primary decision-makers for economic matters and believe national
governments are the ones who establish the rules for other actors (Gilpin and Gilpin,
2001). Therefore, the ultimate power remains with individual states, despite the increase
in IGOs. Realism advocates that global governance is merely a tool for major world
powers to maintain the divide between the least and most powerful states.
Realists view the international system as a ruthless arena in which states take
advantage of each other, and have minimal reason to trust each other (Mearsheimer,
1994). The basis of the realist perspective on global governance is that power is the
driving force and motivator for state action and interest. According to Mearsheimer, the
international arena is essentially a struggle for power between states where competition
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supersedes cooperation. However, he argues that cooperation among states exists but
has limitations, such as security competition, and that genuine peace is unlikely
(Mearsheimer, 1994). Realists believe that cooperation is hindered by “relative-gains”
and “cheating,” and that institutions operate under guidelines that favor state
calculations of self-interest that are established on the global distribution of power
(Mearsheimer, 1994).
Realism focuses on the notion that states work to increase their own power relative to
other states. The theory of realism states that the only certainty in the world is power;
therefore, a powerful state—via military power (the most important and reliable form of
power)—will always be able to outlast its weaker competitors. Self-preservation is a
major theme in realism, as states must always seek power to protect themselves. In
realism, the international system drives states to use military force. Although leaders
may be moral, they must not let morality guide their foreign policy. Furthermore, realism
recognizes that international organizations and law have no power and force, and that
their existence relies solely on being recognized and accepted by select states.
Emphasize the role of power. Power may be in the form of military capabilities, strong
economy, internal stability, and foreign alliances.
Marxists believe that global governance is ineffective because MNCs and the more
powerful and wealthier states exploit the poorer states. Marxists believe that because of
multinational systems of trade, finance, and production, the state’s authority regresses
to just one of many at global, national, and local levels (Dunn, 2009, p. 307).
Social constructivists, for example, believe that global governance is proficient. They
believe that structural change is determined by altering a system of expectations that
could be mutually strengthening (Wendt, 1995). They also believe that social structure
is made up of social relationships and they examine how ideas influence states and
non-state actors in the international system. Social constructivism focuses on the
process of relationship building and collaboration between actors.
The United Nations officially came into existence on 24 October 1945. The purpose of
the United Nations is to bring all nations of the world together to work for peace and
development, based on the principles of justice, human dignity, and the well-being of all
people.
There are currently 192 Members of the United Nations. The United Nations
Headquarters is in New York City. UN General Assembly – occupies the central position
as the chief deliberative, policymaking, and representative organs of the United Nations.
The UN does not have its own military, but it has peacekeeping forces which are
supplied by the member states.
UN Principal Organs
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• After 1975, it was composed of the five permanent members of the Security
Council—the United States, the sole remaining administering power, and the four
permanent non-administering powers.
The Secretariat
The global dimension of citizenship is Manifested in behavior that does justice to the
principles of mutual dependency in the world, the equality of human beings and the
shared responsibility for solving global issues.
A. Characteristics
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IMF:
“a historical process, the result of human innovation and technological
progress. It refers to the increasing integration of economies around the
world, particularly through the movement of goods, services, and capital
across borders. The term sometimes also refers to the movement of
people (labor) and knowledge (technology) across international borders.”
United Nations:
“the increasing interdependence of world economies as a result of growing
scale of cross-border trade of commodities and services, flow of
international capital, and wide and rapid spread of technologies.”
Economic Globalization
Economic globalization is characterized by the deepening economic relations and
interdependencies among countries.
Production of goods and services is no longer confined within a single country.
Elements:
the globalization of trade of goods and services
the globalization of financial, capital, and labor markets
the globalization of technology and communication
the globalization of production process
Global Trade of Goods & Services
Trade of goods and services allows economies to interact with other economies
which increases social relations among people.
This allows flowing and sharing of ideas and practices across communities.
Through international trade of goods and services, people from a particular country
can now consume goods and services that can only be produced by certain
countries.
Trade Protectionism: government intervention in foreign trade with the objective of
encouraging domestic production by reducing trade.
Trade restrictions are imposed:
Tariff – tax on import
Quota – limitations on the quantity of goods or the monetary values of the goods to
be imported
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The inflow of tourists as well as the outflow of overseas workers have facilitated
financial flows.
In theory, financial integration or openness enhances economic growth, especially
in developing countries.
Particularly, financial flow augments domestic saving, consumption, and production.
Physical capitals such as machineries are also imported or shared among countries
in order to improve efficiency and productivity among firms.
Globalization and the advancement of technology that it has brought have shifted
the production process from labor-intensive to capital-intensive.
This, in turn, has allowed expansion and innovation in the production of goods and
services.
Globalization has also allowed for a smooth flow of people which includes labor
migration.
People could go to other countries to work there.
Examples of this are overseas Filipino workers who travel outside the Philippines for
work and Chinese nationals who come to the Philippines to work in Manila-based
Philippine Offshore Gaming Operators (POGOs).
Globalization of Technology & Communication
Globalization has also allowed the transfer of technology and communications
across countries. In turn, they have also intensified globalization thru strengthening
social relations among people.
Technology keeps improving and promoting innovations due to the global flows of
ideas brought about by the increased social relations among people.
These technologies have been integrated in people’s everyday lives.
Advancement in technology and communication has allowed efficiency and
improvement of production of goods and services.
Globalization of Production Process
Production process has become globalized. Production of a particular product is no
longer confined within one single country but distributed to different parts of the
world.
The driving force behind this is to lessen the cost of production, thereby, making
production more efficient.
Firms from different countries engage in specialization by producing inputs that they
can manufacture more efficiently.
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Technology is also advanced as firms are able to innovate more with specialization.
The globalization of the production process also has drastic impacts on developing
countries as much of raw materials and primary inputs are supplied by these
countries.
GLOBAL ECONOMIC INSTITUTIONS
Market Integration
The economy is a social institution as it is composed of people who facilitate the
production, consumption and exchange of goods.
Such economic activities vary among economic systems.
Sectors of every economy:
Primary Sector – raw materials
Secondary Sector – manufacturing
Tertiary Sector – services
With the help of the different international financial institutions and economic
organizations, economic globalization has brought closer together the world
economies creating market integration.
The gains and crises of one country can affect the world economy and the
magnitude of such impacts depends on the strength of the country’s economic
power/influence.
The Bretton Wood System
Gold Standard – countries redeems their currency with the values of their golds.
Bretton Wood System – shift from gold standard to US Dollar standard of exchange.
It paved the way for the creation of two financial institutions:
International Bank for Reconstruction and Development (IBRD)
International Monetary Fund (IMF).
World Trade Organization (WTO)
General Agreements on Tariffs and Trade (GATT) in 1947.
served as a forum where representatives of member countries meet to engage in
multinational trade agreements.
the World Trade Organization (WTO) was established in January 1995.
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The WTO became the official organization to implement the trading system provided
by the GATT.
oversees trade in services, nontariff-related barriers to trade, and other areas of
trade liberalization.
neoliberal goal: reducing or eliminating barriers in order for all nations to benefit.
The WTO oftentimes fails to counter the trade barriers in developed countries.
The decision-making processes in the organization are heavily influenced by larger
trading powers.
Green Room
The WTO are also protested by certain International Non-Governmental
Organizations (INGOs) because it excludes these INGOs in its decision-processes.
International Monetary Fund (IMF) & World Bank
IMF and World Bank are both global financial institutions/banks with the main
advocacy of promoting economic stability.
established by the different countries
financed and heavily influenced by rich powerful countries
The IMF was established to help for the reconstruction after the war by lending to
countries whose economies or currencies collapsed.
The World Bank had long term goals: eradication of global poverty especially in
poor countries by investing in education, health and other important sectors of each
country.
ILO- INTERNATIONAL LABOR ORGANIZATION
The International Labor Organization is a tripartite organization that brings together
representatives of governments, employers and workers in its executive bodies.
to set labour standards, develop policies and devise programmes promoting decent
work for all women and men.
OPE-Organization of Petroleum Exporting Countries
The Organization of Petroleum Exporting Countries (OPEC) is an intergovernmental
organization established in 1960 by Saudi Arabia, Iraq, Iran, Kuwait, and
Venezuela.
to coordinate and unify petroleum policies among member states.
OEC-Organization for Economic Cooperation and Development
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The North American Free Trade Agreement (NAFTA) is a trade agreement by the
United States, Canada, and Mexico which was created on January 01, 1994.
Many tariffs on trades among the three were eliminated and phased out which
created a huge free trade zone in North America.
In 2018, the NAFTA was replaced by the US-Mexico-Canada Agreement (USMCA)
under the Trump Administration.
Southern Common Market (MERCOSUR)
MERCOSUR is an economic and political bloc initially established by Argentina,
Brazil, Paraguay and Uruguay, and subsequently joined by Venezuela and Bolivia.
It aims to promote a common market and spur development by generating business
and investment opportunities.
It also aims for the competitive integration of the members’ national economies into
the international market.
Global Corporations
Global corporations are also called multinational corporations (MNCs) or
transnational corporations (TNCs).
They are considered multinational or transnational because their facilities and
assets are located in different countries to take advantage of the opportunities in
manufacturing, distribution, exchange and sell their products outside their home
countries.
Hence, for a particular product from a multinational corporation, the different stages
of production may be operated at many different countries where the material or the
labor is least expensive.
MNCs and Global Market Integration
In the present, global corporations play an important role in the global economy as
they are seen as the drivers of economic globalization by making the countries
around the world more interdependent.
They tend to influence the different countries’ economy and politics.
They affect the supply in the market.
They also may lobby their interests to politicians and the policy making process by
donating to their political campaigns.
They can also influence the global trade laws and other economic decisions of the
different international regulatory institutions.
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To minimize the costs of productions and maximize their profit, MNCs locate their
factories in countries especially among developing nations where there are lesser
costs in terms of regulatory fees, labor, and raw materials.
Outsourcing or transfer of production to developing countries will create job
opportunities and transfer of ideas and innovations which can help improve the
economic growth of these countries.
As a result, as well, of minimizing the costs of production, the output increases, and
their prices are lowered.
Resources are also allocated efficiently as corporations aims to produce the most
output using least inputs.
However, some viewed global corporations as exploiters of both the workers and
the natural resources in the developing countries.
They take advantage of the cheap labor in these countries, pay workers the
minimum wage, and give them poor working environment.
The Global Divide: Global North & Global South
Economic globalization is widely attributed to rapid development across the
world. However, such development lacks equitable distribution among countries.
Some countries have developed while others' development has remained gradual..
This is manifested in the prevalence of global inequality between developed and
developing countries.
The Global Divide
Global inequality is exhibited in the Global North-South Divide.
This Global Divide is a socio-economic and political division of Earth popularized in
the late 20th century and early 21st century.
The two groups are often defined in terms of their differing levels of wealth,
economic development, income inequality, democracy, and political and economic
freedom.
The idea of global divide is much associated with the First World-Third World
classifications.
During the Cold War, countries were categorized as First World (for the capitalist
west) and Second World (for the socialist east).
The classification was rooted to the differences of political and economic ideologies
among countries.
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The rest of the world were classified as Third World for their neutrality during the
Cold War.
As they are founded on political and economic ideologies, the first-third worlds
classifications have become inaccurate in characterizing global inequality across
countries.
Hence, the Global North-South Divide
Hence, the Global North-South Divide was created to truly reflect the disparity of
wealth and development across countries.
It is a result of the Brandt Line from the Brandt Report in 1983 which showed that
countries above the line were fairly wealthy and developed compared to those in the
south.
The Global South is made up of Africa, Latin America and the Caribbean, Pacific
Islands, and the developing countries in Asia, including the Middle East (i.e. Brazil,
India and China , which, along with Indonesia and Mexico, are the largest Southern
states in terms of land area and population).
Sources of Global Income Inequality
Industrial Revolution
While some developed countries took advantage of the increase in the
manufacturing sector, some countries remained stagnant in small production.
Economic Globalization
Through trade and market integration, the poor countries have gained and
developed but the rich countries have gained and developed more.
Access to Technology
Developed countries have always had greater access which means higher
technological efficiency in production which, in turn, means higher growth and
productivity.
Economic Globalization & Global Poverty
To lift people out of poverty, there is a need for them to be integrated and to
participate in the economy by providing them with employment and investment
opportunities.
With the increasing interconnectedness among world economies into a global
economy, it will further help reduce and/or eradicate poverty as more opportunities
are created.
Some argued, however, that economic globalization helps provide income for
workers in developing countries, thereby reducing economic gaps.
Economic globalization may contribute greatly to global poverty and inequality but it
could also contribute to addressing these global issues.