Social Studies Part 3 - Implications and Consequences of Globalization. Chapter 11 - Economic Globalization

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1 Social Studies 10-2 Part 3 - Implications and Consequences of Globalization Chapter 11 - Economic Globalization Why are there different understandings of economic globalization? Name:

2 Chapter 11 - Economic Globalization Vocabulary: Bretton Woods Agreement: World Bank: IMF: Exchange Rate: HIPC: Example: trade liberalization: Example: free trade: Example:

3 trading bloc: Example: tariff: Example: FTA: Example: Group of Eight (G8): Example: FTAA: Example: anti-globalization: Example: WTO: _ GATT: Total: /24 marks

4 PART 3: Implications and Consequences of Globalization Chapter 11 - Foundations of Economic Globalization #1 (Pages ) Economic globalization is the process of throughout the world becoming more. Some events in our modern world have led to the of economic globalization as we know it. These events are: * the Bretton Woods Agreement, 1944 The countries that against Germany, Italy, and in the Second World War were known as the - the Allies became concerned with how they would their economies following the war. The Allies met in Bretton Woods, New Hampshire, USA to discuss the. They founded the, the, and GATT; now the. * the creation of the World Bank, 1944 The Allies hoped the World Bank would be able to help rebuild countries by the war so it provided of dollars in financial to Western following the war. The World Bank today continues to provide loans to member countries in financial. For countries to receive loans. These criteria include that the country must reduce government and ; they are also required to promote Western-style policies.

5 * the development of the International Monetary Fund, 1944 (IMF) The IMF was created to work with the World Bank to bring to international monetary affairs and help expand world. The World Bank is in charge of financial assistance for countries in. The IMF is also in charge of monitoring rates and providing short-term financial. Both the World Bank and IMF are of the United Nations. * the end of the Cold War, 1989 The Cold War began in 1946 following the Second World War. For more than 40 years, the world was divided between communist countries led by the Soviet Union and the Western capitalist democracies led by the USA. The Cold War was mostly an economic struggle between capitalist and communist countries. Globalization was full steam ahead by the end of the Cold War. People were using computers, watching international events on TV, and doing business around the world. When the USSR collapsed, most communist countries such as Russia and those in Eastern Europe began the transition away from communism. Since 1990, the forces of globalization and capitalism have merged to expand the forces of economic globalization. * the impact of technology and communications Television, computers, the, cellphones, and have made seem irrelevant, the most globalizing force being the Internet.

6 Understandings of Economic Globalization We learned earlier that the World Bank and IMF were set up to stabilize international affairs and to help expand trade. While the World Bank and the IMF provide aid to developed countries, it is not their main function. The money they provide is charity, it is a with and the World Bank and IMF that their loans be paid back in full. The sticking point for many is the conditions that are to receive a loan from these institutions - they require countries who want a loan to be adopting free market polices. How would you feel if you could not receive a much needed bank loan because you did not meet a long of conditions? of the IMF and the World Bank say that, in the long run, countries their conditions will from free market policies. But believe that the World Bank and IMF should interfere in economies in this way. To stabilize international monetary affairs, the World Bank and IMF have: - Europe s recovery after W.W.II - helped to prevent war-torn countries from becoming - helped to the price of goods and services - laid the foundation for post-war economic Read Heavily Indebted Poor Countries (HIPC) on page 184.

7 The information on pages 184 and 185 looks at the pros and cons of the World Bank and IMF controlling so much of the global economy. Who runs the World Bank and IMF? The World Bank and the IMF are controlled by the and other countries. In 2004, the USA held 16.4% of the total votes in the World Bank. Since any major decisions require an majority, the USA any changes that other countries of the bank. The money provided the IMF is provided its member countries and each country pays a amount on the size of its economy. The USA and Union provide the money; that is money available to to member countries in. Funds to pay for the annual expenses of running the IMF come from payments made by countries that money. Does the IMF help countries? Look at the Green box on page 185 to see what both critics and supporters of the IMF have to say... What Critics Say *IMF sometimes provides loans that support military dictators friendly to American and European corporations *IMF often requires govt asking for loans to reduce debt by increasing taxes and cutting social programs, thus hurting people in need *IMF does NOT actively promote democracy, human rights, and labour rights *IMF is controlled by the USA and other more developed countries. These countries main goal is to protect the interests of their corporations rather than those of less developed countries that need the money What Supporters Say *IMF is simply a funding agency with little power to influence governments *IMF s goal is to advise and provide loans to countries, not to make social changes in the world *IMF helps countries build economic stability, which is critical for countries trying to build a strong democracy *some of the IMF s most important decisions, like determining interest payments on loans, require a 70% or 85% majority. A group of less developed countries could reject these decisions because, as a group, they hold about 37% of the voting power.

8 PART 3: Implications and Consequences of Globalization Chapter 11 - Free Trade #2 (Pages ) is the process of barriers to trade. Free trade is not a new idea. The planners at Bretton Woods in 1944 wanted a more open for international trade. People around the had been seeking out new markets for their goods for a long time (remember ). Another example is that of the coastal First Nations in BC. Their huge surplus has provided the First Nations with a viable to with neighboring nations for other goods. They have made agreements with other First Nations and other countries to their salmon for goods. In this section, you will have a chance to examine how trade between certain groups or certain countries has economic globalization through trade. In the past years, most of the world s economies have become much more. Of the 193 countries in the world circa 2008, of those nations have signed at least one trade agreement. Individual countries within give special status to their trading. Often this involves some form of trade. Within a free trade area, member countries reduce or eliminate (or custom duty - see Fast Fact on page 187) and other barriers to trade among.

9 Why is there free trade between Canada, USA, Mexico? Canada and the USA are linked together by a similar, a geography, and a long border. Canada entered into a free trade agreement with the USA in. Mexico is also linked to the USA by and a long. After free trade began in 1989 with the USA, Canadian people, banking representatives, and premiers were calling for increased to markets. Supporters of NAFTA As a North American Free Trade Agreement (NAFTA) was being debated, of NAFTA argued that if Canada did participate in this agreement, the USA would end up doing business with then with Canada. It was also seen as important by supporters of NAFTA to with other areas of the world since countries in Europe and had already made agreements among themselves. was signed on in, and free trade has since existed between Canada, the USA, and Mexico. Opposition to NAFTA Those to NAFTA worried about the fact that many Mexican and American workers did NOT belong to labour and that these workers earned much money than Canadian workers and had fewer labour to protect them. The were concerned with that when NAFTA was ratified (passed into law), in Canada would close and to Mexico. In Mexico, owners would their workers much less and would not have to worry about unions or labour laws regarding workers or protection of the.

10 Others argued that the NAFTA agreement could make it for the Canadian government to laws designed to protect Canadian. Free trade is still a complex, as lots of restrictions and regulations are still in. Figure on page 189 outlines two understandings of the impacts of free trade on Canada. We will outline together what supporters of FREE TRADE say and what CRITICS of FREE TRADE say. (10 marks) What Critics Say *Since NAFTA became law, the Canadian economy has grown by an average of 3.6% annually *Canada and Mexico have increased their exports to the USA. More than half of all goods made in Canada go to the USA * Canada s exports account for over 40% of gross domestic product. This is higher than any other G8 country. About 1/4 jobs in Canada is tied to international trade * About 87% of all the goods Canada exports to to our NAFTA partners * Close to 2.3 million jobs have been created in Canada since a 17.5% increase over pre-nafta employment levels What Supporters Say *Between 1989 and 1993 (when the FTA was in effect), 452 major manufacturing plants were closed in Ontario. Nearly half were US owned and 65% were permanent closures *1996 study of 500 union-organizing drives showed that 62% of employers threatened to close/move their plants rather than negotiate with a union *Canada lost 255,000 jobs, or 12.8% of its workforce, from 1988 to This was 3 times the loss in the USA during the same period *From 1989 to 2001, family incomes of the wealthies 20% of Canadians increased by 16.5%; family income of the poorest 20% decreased by 7% *The rate of poverty rose between 1989 and 2001, except for Canadian over the age of 65

11 Chapter 11 - Contemporary Economic Globalization #3 PART 3: Implications and Consequences of Globalization (Pages ) What is the relationship between trade organizations and sustainable development? Why are there different understandings of economic globalization? There are understandings of the World Trade Organization (WTO) and the Group of Eight (G8) on how they affect the lives of ordinary people around the world. is that these organizations, along with the World Bank and IMF, make the world better and. For example, the organization Global Envision believes that economic development and the global free market system are the most reliable and sustainable strategies for global poverty alleviation. (Figure 11-12, page 191), is that these types of organizations simply help make more countries at the expense of developed countries. This view is generally held by people in the - movement. - (see later on in the notes). World Trade Organization The WTO was formerly known as - General Agreement on Tariffs and Trade which was created in by 23 countries that believed free trade among member countries would encourage relations. The WTO was formed on January 1, 1995 and the WTO works to trade relations among countries of the world, especially by tariffs and other barriers to. Most countries in the world belong to the WTO but its like a club, in that members can only join they agree to follow the of the club. Countries that members find it very hard to do. For this reason, finally decided to join in 2000 but China had to to follow the rules and regulations set by the international community.

12 This made China even more to foreign companies to invest in and do business in. China s economy has rapidly since The G8 This is a group of the 8 economies in the world. The group, originally 6 members, first met in the 1970 s because of about the economic of that era., the group now deals with a wide range of global economic, social, and political. The thing is that the G8 countries have nearly of the vote in the World Bank and IMF and they also have a significant impact on the of the WTO. Name all of the 8 countries of the G8 below: Understandings of the G8 of the G8 is that it is simply an group of leaders from the, most developed countries, with no interest in issues to the rest of the world. People who support this view, to the fact that countries such as China or - two of the world s growing economies - are apart of the. They also point out that no or American countries are NOT included.

13 is that the G8 summits are important in dealing with key global issues and to less developed countries. The 2002 summit in Kananaskis, Alberta, focused on 3 priorities: fighting, strengthening global economic growth and development, and furthering development in Africa. Addressing change and aid to Africa were the major issues at the 2005 summit in Scotland. The G8 leaders pledged to increase aid to Africa by billion by the year. The Anti-globalization Movement People apart of this movement argue that the WTO and globalization DO NOT to sustainable prosperity for all people. Formed in 1985, a Canadian anti-globalization group called believed that Canada s and unique way of life was being by economic globalization. Read the 5 points on page 193 that explains how the Council of Canadians feel economic globalization threatens our independence and unique way of life. *globalization factors the rights of corporations over the rights of communities *free trade agreements such as NAFTA give special rights to big corporations. Corporations can sue govt s if laws made to benefit people limit the corporations ability to make a profit. *globalization widens the gap between rich and poor. Council of Canadians reports that after the 10th anniversary of NAFTA, Canadian s standard of living was falling, social programs were being reduced or privatized, and more and more people were working part-time, at insecure jobs with few benefits *globalization undermines democracy because decisions about which public laws interfere with corporate profits are made in private by trade experts, not by elected officials *globalization prevent people from producing food for their livelihoods because giant agricultural businesses push down the price of goods and flood the markets with inexpensive products. This practice forces millions of laborers and family farmers out of business in both developed and developing countries

14 Methods of Protest The anti-globalization movement has incorporated various methods of protest including: - public speeches - letters of opposition or support - mass petitions - internet forums and blogs - marches, parades - banners, posters, press statements - sit-ins and fasts - civil disobedience (flag burning, breaking down barriers during meetings) can happen, sometimes it is but often it is due to protesters being outside in the heat or cold for a long time. They sometimes feel that one of their members may have been by police guarding the barricades. The police may lash out at times after being by protesters or when protesters throw things at police. When occurs, this often receives a great deal of coverage. Chapter 11 Questions: Economic Globalization 1. Look at the Figure 11-1 on page 178. Why might activists be protesting the sale of lumber from the rain forests? (2 marks) 2. List the 5 events that led to the development of economic globalization as we know it today: (5 marks)

15 3. What was the Cold War? (1 mark) 4. Technology has been a powerful force in making borders seem irrelevant. Which modern technology is the most powerful globalizing force? (1 mark) 5. Do you think that economic globalization was inevitable because of advances made in technology and communications? Explain why or why not? (3 marks) 6. What were the four ways in which the World Bank and the IMF stabilized international monetary affairs? (4 marks)

16 7. Read the article Heavily Indebted Poor Countries on page 184. In your own words answer the following: Does globalization contribute to sustainable prosperity for all people? (3 marks) 8. Who runs the World Bank and the IMF? (1 mark) 9. List 2 points for the IMF helping other countries and 2 points against the IMF helping other countries: (4 points) 10. What is NAFTA? (1 mark)

17 11. Read the arguments for and against Free Trade on page 189. Which side do you agree with? Why? Explain you answer with details. (4 marks) 12. Explain 3 ways in which Free Trade will impact First Nations people, according to page 190. (3 marks) 13. Why are there anti-globalization groups? (2 marks) 14. On page the text explains the G8 summit. What do the G8 countries have in common? (2 marks)

18 15. List 3 anti-globalization claims made by the Council of Canadians on page 193. (3 marks) 16. On page 194 the text explains different methods of protest. Looking at the picture in Figure 11-15, why do you think this behaviour is considered newsworthy? (2 marks) 17. What impression do the images from Figure create about the anti- globalization movement? Are these impressions valid? Explain: (4 marks) Total: /45 marks

PART 3: Implications and Consequences of Globalization Chapter 11 - Foundations of Economic Globalization #1 (Pages )

PART 3: Implications and Consequences of Globalization Chapter 11 - Foundations of Economic Globalization #1 (Pages 180-185) Economic globalization is the process of economies throughout the world becoming