Global Economy & Market Integration PDF

TCWD - THE CONTEMPORARY WORLD LESSON 1-3 GLOBAL ECONOMY & MARKET INTEGRATION Globalization (Growing Interdependence) Avoids Parochialism (focusing on small sections of an issue rather than considering its wider context.) - basically not open to new ideas. Inherently Interdisciplinary (more than...

TCWD - THE CONTEMPORARY WORLD LESSON 1-3 GLOBAL ECONOMY & MARKET INTEGRATION Globalization (Growing Interdependence) Avoids Parochialism (focusing on small sections of an issue rather than considering its wider context.) - basically not open to new ideas. Inherently Interdisciplinary (more than one branch of knowledge) connectivity; social relations/exchanges FIVE CORE CLAIMS OF MARKET GLOBALISM Globalization is about the liberalization (paving the way for economic growth) 1. Globalization is inevitable and irreversible 1. Nobody is in charge of globalization. 1. Globalization benefits everyone. 1. Globalization furthers the spread of democracy in the world. (Ruled by the people) 1. GLOBAL ECONOMY > Refers to the international exchange of goods and services. PROTECTIONISM : comes in the form of tarrifs and quota (taxes on imported goods, limited number of goods) : giving preferential treatment to domestic producers TRADE LIBERALIZATION - Free trade International Financial Institution (IFI) Purpose of IFI i’m capi Encourages entrepreneurial initiatives Role/Mission of IFI Created in the aftermath of WW2/ Promote internation moneteray stability 1. International Monetary Fund (IMF) - Oversees the stability of the world's monetary system 2. Multicultural Development Bank (MDB) - Financial institution established by multiple member countries. MDB includes: a. World Bank Group b. African Development Bank c. Asian Development Bank d. Inter-American Development Bank e. European Bank for Reconstruction and Development International Companies importers and exporters; no investment outside their home country. Multinational Companies has facilities in multiple countries; each facility functions on its own (it is its own entity) Global Companies has facilities in multiple countries but they've figured out to create one company culture. Transnational Companies commercial enterprise operating substantial facilities; more than one country & no natural home. Economic Globalization (Advantages) ~Create Job Opportunies for Locals. ~Supply Cheaper Products. Economic Globalization (Disadvantages) ~Low wages, Poor Working Conditions, Exaggerated Job Qualifications, Unreasonable Working Hours. ~Lost support of Local Goods. Market Integration - seperate market for the same product become one single market - occurs when prices among related goods follow similar patterns over a long period of time - group of goods moving proportionally to each other. TYPES OF MARKET INTEGRATION Horizontal Integration - one firm acquires another firm operating in the same industry. 1. Partnership collaborating with another company to tackle the market together. 2. Merger two different companies in the same market become one. 3. Acquisition company buys another within the same market. MERGER VS. ACQUISITION Merger: Similar scale of operation combine into one new company Acquisition: One business buys another, often smaller, business. 4. Conglomerate Integration combination of agencies not directly related to each other. Vertical Integration - a firm performs more than one activity in along the supply chain. 1. Forward Integration a firm assumes another function of marketing which is closer to the consumption function. (buying part of the process that occurs after the company's manufacturing process.) 2. Backward Integration ownership or combination of sources of supply. (buying part of the supply chain that occurs prior to the company's manufacturing process) FORMS OF MARKET INTEGRATION 1. Preferential Trading Agreement (PTA) - lowers tarriffs (taxes) for who have signed the agreement. 2. Free Trade Agreement (FTA) - reduces barriers to trade among member countries but still has the right in deciding for external rate of tarrif(taxes) for non-member countries. a. North Americal Free Trade Agreement (NAFTA) Promote trade between the U.S, Canada and Mexico. b. The ASEAN Free Trade Area (AFTA) Southeast Asian Nations supporting local manufacturing in all ASEAN countries. 3. Customs Union - Remove trade barriers among members and impose uniform trade restrictions against non-members, a. benelux founded in 1948; Belgium, Netherlands and Luxembourg. 4. Common Markets - movement of labor and capital within the member countries. > Custom Unions + integration of factor markets (capital and labor) Ex: a. European Common Market - provides free movement of goods, capital, services and labor across border of EUROPEAN UNION. b. The Southern Common Market (MERCOSUR) - Argentina, Brazil, Paraguay & Uruguay. - Subsequently joined by Venezuela & Bolivia. c. The Common Market for Eastern and Souther Africa (COMESA) - encompasses 19 countries stretching from Libya to Zimbabwe 5. Economic Union - seeks coordination economic and social policies to facilitate free flow from country to country. - when fully implented, entails creation of a unified central bank; singe currency; common policies on agriculture, social services and welfare. Ex: EUROPEAN UNION - world's largest trading bloc - one of the largest exporters in the world EURASIAN ECONOMIC UNION - Political and Economic union of countries in central and northern Eurasia. - signed in 2014 by Russia, Belarus and Kazakhstan. LESSON 4-5 GLOBAL INTERSTATE SYSTEM & CONTEMPORARY GLOBAL GOVERNANCE Importance of Global Interstate System - A hegemon is a core state that has a significantly greater amount of economic power than any other state, and that takes on the political role of system leader. (Leading Power) Principles of the Interstate System Sovereignty Territoriality Non-interference Economic and Political Integration: The case of the European Union - alongside economic interdependence, states formed regional partnerships; - Europe as continent’s political elite made the leap into market integration after WWII from European Coal and Steel Community to European Union; - has 28 members today. Global Governance - process of designating standards, laws, rules or regulations intended for a global scale. WHAT IS CONTEMPORARY GLOBAL GOVERNANCE is a purposeful order that emerges from institutions, processes, norms, formal agreements, and informal mechanisms that regulate action for a common good; (K.Benedict, 2001) It encompasses activity at the international, transnational, and regional levels, and refers to activites in the public and private sectors that transcent national boundaries. Role of Public International Law in Global Governance Public International Law or Law of Nations, is the body of legal rules, norms, and standards that apply between sovereign states and other entities that area legally recognized as international actors. Doctrine of Transformation - any international law must be mindfully transformed through legislation before it could be implemented locally. Doctrine of Incorporation - automatic reception of the international law into domestic law without formal needs for official legislation. International Law provides normative guidelines, methods and mechanisms to sovereign states and international organizations. Ex: > United Nation Conventions Law of the Sea (UNCLOS) Ex of International Law Subjects: > Human Rights > World Trade > War > Migration Domestic Law - body of law and rules existing within a country's territory International Treaty - agreement formed by international actors (sovereign states and international organizations) under the international law; cogent source of internation law. (appealing forcibly to the mind) Ex: > International Water Agreement by UNCLOS International Customs general practice accepted as law [Article 38 1B] with two elements: State Practice and Opinio Juris Ex: > Head-of-State Immunity GLOBAL ECONOMY LEVELS OF ANALYSIS (GEREFFI) Macro Level - includes the international organizations and regimes that establish rules and norms for the global community. Meso Level - believed that the building blocks for the global economy are the countries and firms. The global economy is seen as the arena in which countries compete in different product markets. Micro Level - There is a growing literature on the rtersistance to globalization by consumer groups, activists, and transnational social. UNITED NATION'S FOUR MAIN GOALS Maintain international peace and security 1. Develop friendly relations among nations 2. Achieve international cooperation in solving international problems 3. Be a center for harmonizing the actions of nations in the attainment of these common end 4. Some issues Revolved through GLOBAL GOVERNANCE Human rights The protection of individuals during wars and armed conflicts. The fight against terrorism and other serious crimes. Environment Trade and development  Telecommunications Transport Issues of Global Governance Military conflicts among or within states Climate change problems Humanitarian crisis Economic imbalances Purpose of Global Governance National policies has a direct effects on a country, good or bad Its global effects on other countries can not be ignored; Global governance stresses on cooperative forms of conflict management; It helps nations to develop their capacity to deal with the challenges of globalization; Global governance includes citizens' participation in the global decision-making.