Globalization & Sustainable Prosperity: Unit 3

Unit 3: Globalization & Sustainable Prosperity

• The unit explores the extent to which globalization contributes to sustainable prosperity for everyone.
• Economic globalization is a key focus.

Economic Globalization

• Economic ideas have significantly influenced contemporary economic globalization.
• Key economic ideas include, how money works, establishing a money system through the World Bank and International Monetary Fund, and the expansion of free markets to previously communist countries.

Focus on Monetary Systems

• The establishment of a global money system is a central part of globalization.
• Focuses on how World Bank and International Monetary Fund operate.
• Focus on the expansion of free markets to communist countries in Europe.

Auto Pact

• This section likely discusses a specific agreement or pact focusing on the car sector, likely the Canada-United States Auto Pact.

Bretton Woods Conference

• The Bretton Woods Conference was a crucial meeting after World War II.
• This meeting was to rebuild war-torn economies.
• The Bretton Woods Agreement created rules and international organizations for the global economy.
• The conference involved 44 participating countries.
• Financial institutions like the World Bank and the International Monetary Fund (IMF) were established as part of the Bretton Woods Agreement, aiming to promote international trade.

Countries Attended the Bretton Woods Conference

• Key countries involved were the USA, Canada, Western Europe, Japan, and Australia.

New International Monetary System

• A need arose to rebuild Europe following World War II.
• Allies established a new standard to rebuild the global economy.
• The Bretton Woods Agreement established the rules and regulations for this new post-war economic system.

The Gold Standard

• All money printed had to be backed by a country's gold reserves.
• A fixed-exchange rate was necessary for the value of money.
• Issues of inflation and the need to borrow money or print more were discussed as potential difficulties with the gold standard.

The Problem Made Worse: Inflation

• The need to borrow or print money sometimes leads to increased debt.
• Increased debt leads to the possibility of inflation; where money loses value.

Floating Exchange

• The US shifted away from the gold standard due to debt.
• This change impacted other countries, leading to floating exchange rates.
• These rates are driven by supply and demand which influence the currency value.

Value of Money

• Money's value reflects a country's economic strength and power.
• Often countries base their own currencies on the US dollar.

The World Bank

• Established as part of the UN.
• Works independently of other UN members.
• Provides financial aid to specific countries based on political and economic criteria.

International Monetary Fund (IMF)

• Works with the World Bank, offering short-term solutions for countries.
• Monitors exchange rates globally.
• Provides loans to countries based on economic strength.
• Countries contribute to the IMF based on their economic size.

Free Market Expansion

• Economic shift after the fall of the Iron Curtain emphasized free-market economies.
• Centralized planned economies (government controlled) are opposite to free markets.
• Major countries like India and China also adopted a more free-market approach.

Economic Globalization: Free Trade (3.5)

• Globalization emphasized the removal of trade barriers, meaning tariffs.

Trade Liberalization

• Removing obstacles to international trade, particularly tariffs, was a major component of globalization.

Tariffs

• A tariff is a tax placed on imported or exported goods.

Free Trade

• Free trade resulted from trade liberalization.
• It meant that few restrictions were placed on global trade.

Trading Blocs

• Trading blocs are groups of nations interacting to offer each other better trading terms.

General Agreement on Tariffs and Trade (GATT)

• Created as a UN agency (1947)
• Intended for all countries to be equal in trade
• Goods from one country should be treated similar to goods from another country

Free Trade Agreement (FTA)

• The US and Canada opened borders.
• Canada sought access to the US market and the US wanted more access to Canada's resources.

North American Free Trade Agreement (NAFTA)

• Added Mexico to the trade agreement.
• Increased trade between Canada, the US and Mexico.

United States-Mexico-Canada Agreement (USMCA)

• Replaced NAFTA in 2020.
• Made some changes to the arrangement.
• Including North American vehicle production increased.

World Trade Organization (WTO)

• Improves global trade relations by encouraging countries to remove trade barriers.
• Follows specific rules for member countries to be included, but exclusion can impede trade success.

The Group of Seven (G7)

• Made up of the world's strongest economies.
• Discusses economics & foreign policy.
• Uses influence through representation in world organizations.

Economic Globalization: International Organizations

• This is a section on various international organizations involved in global trade.
• The slide provides an overview of organizations and their role.

Summary (End of Day Check-in)

• Sections on the unit summarize or recap.
• Different types of check-in questions, that require summary of unit content.