Why is globalization so controversial? Good morning! If you were absent on Friday, you need to make arrangements to take the Unit 4 Exam before or after school ASAP. Computers are on. Begin taking the pre- test for International Trade – International Pretest (password: international) After the pre-test, Vocabulary words: absolute & comparative: ○ Find synonym for each ○ Find anonym for each ○ Create an analogy for each Good morning! Make arrangements for your makeup test before or after school ASAP! Project assignments will be given today. We’ll complete reader’s theatre. What is globalization? No one answer. What is Globalization? Process of increasing the connectivity & interdependence of world markets and businesses. What’s driving globalization? Technological advances that make it easier for people to: Communicate Travel Do business internationally. The Internet Advances in telecommunications Globalization As economies become more connected to other economies, they have increased opportunity but also increased competition. Because of Globalization we have Powerful pro-globalization groups Powerful anti-globalization groups One of more powerful pro-globalization groups: World Trade Organization (WTO) WTO Protests: Seattle, 1999 Who? Union organizers, environmentalists, animal rights activists, and senior citizens protested during WTO meeting. WTO Protests: Seattle, 1999 Protesters attempted to shut down WTO meeting by blocking major roads, breaking windows of businesses, engaging police WTO Protests: Seattle, 1999 Why? Protestors believed WTO policies promoted greater free trade: were bad for environment Increased world poverty Only made large corporations wealthy WTO Protests: Seattle, 1999 Supporters believed: WTO policies promoting free trade improves living standards worldwide Better living standards lead to increased human rights, literacy rates and even life expectancies More names for the two opposing groups: Protectionists Want trade barriers to protect domestic industries. Free Traders Favor fewer and even no trade restrictions to encourage free trade (international trade) National Defense Protectionists Argue Country might become so specialized that it would be too dependent on other countries. Dependency might keep us from getting supplies in time of war. Some small countries (Israel & South Africa) are loading up on arms just in case this happens.) National Defense Free Traders argue Admit national security is a valid concern Must consider that supply would be smaller without free trade. Might argue over which industries are critical to national defense. Infant Industries Protectionists New or emerging industries (infant industries) must be protected to gain strength and experience before competing globally. Trade barriers would give infant industries time to develop. Infant Industries Free Traders Will go along with infant industries argument as long as trade barriers are eventually removed. When companies get protection they seldom want to give it up. Protect Domestic Jobs Protectionists Tariffs and quotas protect domestic jobs from cheap foreign labor. Makes it easier for people to work in communities they grew up on. Free Traders Believe it is best not to interfere. Protecting jobs keeps industries from being efficient with resources. Believe pressure should be put on threatened industries to modernize & improve. Protect Domestic Jobs Free Traders Believe if prices get too high people will find substitute goods & jobs will still be lost even though they are protected. Believe profit loss system is a major feature of American economy that helps weed out inefficient businesses. Keeping the Money at Home Protectionists Will keep American money in US. Free Traders Believe American dollars spent abroad will eventually come back. ○ Example – US buying Japanese made cars. Japanese in turn buy soybeans, cotton, airplanes, etc. Helping the Balance of Payments Balance of Payments Difference between the money a country pays out to, and receives from, other nations when it engages in international trade. Protectionists: Argue restrictions on imports help balance of payments by restricting amount of imports. Free Traders: Argue dollars return to US to stimulate employment in other industries.
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