DNL Globalization PDF Senior Year 2024-2025

Senior Year 2024-2025 Ms. Albecker GEOGRAPHY – THEME 2. TERRITORIAL DYNAMICS, COOPERATION AND TENSIONS IN GLOBALIZATION Introduction Globali...

Senior Year 2024-2025 Ms. Albecker GEOGRAPHY – THEME 2. TERRITORIAL DYNAMICS, COOPERATION AND TENSIONS IN GLOBALIZATION Introduction Globalization as a process that creates territorial dynamics, it increases the interaction and integration between countries and between people. However, it also fosters inequalities and tensions. See recap sheet about globalization. Globalization is a geo-political and geo-economic framework linking most of the territories around the world. It was created by the most powerful states and it informs the relations and tensions between countries in the current multipolar world. I. The unequal integration of territories in globalization A. Globalization leads to a hierarchy between territories Within globalization, territories exchange with one another and are linked thanks to flows. This leads to a hierarchy between areas where decisions are made and areas where decisions are applied. Globalization implies companies to open up and expand internationally, thanks to investments and the transportation of goods. Information also moves around, e.g. with the spread of technological innovations. Integration depends on the strategies of States attempting more or less voluntarily to participate in globalization. Globalization can create, emphasize, reinforce global inequalities. The integration and trajectory of territories in globalization are very different and create a fragmented world. Activity 1: Using what we went over in class last year during the “productive spaces” course, the powerpoint and the textbook, define different categories of countries regarding their integration into globalization. Define different criteria that determine integration (GDP, number of TNCs, etc). 1. The most integrated area (cores/centers) Countries belonging to the core of the world economy benefit the most from globalization : trade has enabled them to develop. a) The Triad The enlarged Triad is the core: North America, Western Europe and East Asia (Japan+East China) make up 90% of the financial flows, and 75% of research and development. The G7 countries (United States, Canada, Japan, United Kingdom, Germany, France and Italy) = just under 10% of the world population in 2022, represent 31.6% of global GDP at purchasing power parity (PPP) It is an old heritage coming from the European domination of the world from the 16th century and the great discoveries, reinforced by the Industrial Revolution and by the colonization process during the 19th century + Meiji era1 in Japan. These countries, as leaders of regional blocs, are the wealthiest; they are the core of globalization because they gather financial, economic, technological, intellectual, political and military powers. Within the Triad, Global Cities and large metropolises concentrate command functions. 1 Meiji era : 1868-1912 : rise of the Japanese Empire and rapid industrialisation. 1  Senior Year 2024-2025 Ms. Albecker However, the world operates in an increasingly multipolar manner, due to the assertion of more or less rival powers. The biggest MEDCs remain main players because of their weight and influence but their domination is now challenged. The United States is losing ground, the European Union is undermined by challenges., and Japan is relatively isolated in its region. b) The secondary cores of the Enlarged Triad Some former peripheries have been able to use their assets to develop their economies. The GATT has allowed new powers to specialize in industries and to become new global powers in the 21st century. They are increasingly integrated into the centers of globalization (notion of convergence). South Korea, Hong Kong, Taiwan, and Singapore, are high-income countries. Hong Kong and Singapore are leading international financial centers, whereas South Korea and Taiwan are leaders in manufacturing electronic components and devices. Formerly known as the 4 “Asian Dragoons”, now belong to an enlarged Triad. From the 1960s to the 1990s, they went through rapid industrialization and rapid growth of their GDP (7% a year). They moved up the added- value chain, following a flying geese model2. Also Canada, CEECs. 2. Integrated peripheries: Emerging countries, in particular the BRICS. Emerging countries are new rising powers. Some are of global rank (China, Russia, India, Brazil), others of regional rank (South Africa, Saudi Arabia, Turkey, Mexico, Argentina). Others, such as Indonesia, Thailand, Egypt, Pakistan, Nigeria have the potential to become emerging but are crippled by obstacles such as the lack of infrastructure, rapid growth of population, wars. BRICS is an acronym that refers to Brazil, Russia, India, China, and South Africa. Goldman Sachs created the term BRIC in 2001 for Brazil, Russia, India, and China under the belief that these economies would dominate global growth by 2050. The BRICS have been among the key beneficiaries of corporate-driven globalization, owing their rise to the association of global capital and cheap labor that has followed their integration into the global capitalist system over the last 30 years (see ex. of Iphone). In the 2000s, they could be qualified as “drivers of global growth. Their weight in world GDP has been multiplied by 2.5 in the last 30 years. Their GDP now represents 35.6% of the world’s GDP in 2022, when they make up 40% of the world population. Their place in the economic ranking of countries according to their GDP is high: In 2023, China is in second place, closely followed by India (5th), Brazil (10th) and Russia (11th). South Africa is 39th. Since the 2010s, their growth has been much slower since they remain very dependent on exports (slow-down of consumption in the Triad). Moreover, with Covid-19, the convergence process might prove even more difficult. As a reaction, the BRICS gathered in a summit in August 2023. It was decided that they would broaden the group to six new countries from 2024 on: Argentina, Iran, Saudi Arabia, United Arab Emirates, Egypt and Ethiopia. These 11 countries represent 36% of the world GDP and 46% of the world population. However, these new powers face immense internal challenges: - Russia especially, because of the invasion war it launched against Ukraine in February 2021. As a consequence, the country is excluded from the vast majority of flows at the moment (its president, Putin, is under an arrest warrant from the International Penal Court). 2 Coined by Japanese economist Kaname Anamatsu in the 1930s, presented to world academia in the 1960s. Intend to explain the catching-up process of industrialization of latecomer economies. 2  Senior Year 2024-2025 Ms. Albecker - Problem of rising inequality, ex. of China : From 2000 to 2016, the richest 20% saw their income grow by 16% per year, while for the poorest 20% income growth was only 8.5%. - Other emerging / new-BRICS countries suffer from economic imbalances, rent-based system in Saudi Arabia or Iran, democratic deficit or dictatorial governments, deep social and territorial inequalities, unsustainable development, under-equipment in networks of water, energy, and transport. 3. Dominated peripheries These peripheries are integrated into globalization because: - they are supplying raw material (farms products or oil, for example Venezuela or Algeria, but it creates some huge social and economic inequalities inside these countries because the investments are only in favor of a very small portion of the population (rent-based economy) In such territories, the exploitation of raw materials done by States and TNCs can be extremely detrimental to the local population and environment, like the Amazon, or the Arctic; - they are offering a very cheap labor force (“workshop countries”: Philippines, Thailand, Turkey, Vietnam); - they have some very specific advantages such as the free zones / special economic zones or tax havens (see lesson about Seas and oceans). 4. The margins: avoided or excluded peripheries Some marginalized peripheries remained excluded from globalization and economic growth (phenomenon of divergence). These countries are mainly LEDCs: most of them are Sub-Saharan Africa countries (33 out of 49 countries with total GDP = Austria’s GDP) + some in Asia (Afghanistan, Bangladesh, Sri Lanka) and some in the Pacific (islands). Some of them are landlocked. Africa represents 2 % of the investments and 2% of the world trade (17% of pop). Globalization has altered their economy, however they’re unable to influence this process. Major reasons for the under-development of the LEDCs: corruption, illegal flows, political instability (wars: ex. Yemen, Somalia, terrorism). Cuba (but process of normalization since the visit of Obama 2016), Myanmar and North Korea are banned from the world for political reasons. Failed states (political body that has disintegrated to a point where basic conditions and responsibilities of a sovereign government no longer function properly): Somalia, Eritrea, Liberia… Consequences on the populations and territories: - Around 1.3 billion people are living with less than 1$/day = absolute poverty. Problem of hunger, undernourishment for around 800M people around the world. - Because of the weaknesses of the states, poverty and inequalities are also sanitary (92% of people living with AIDS are living in a LEDC country), no health or education infrastructures for drinkable water or sewage systems or hospitals. - In the marginalized territories, development of crime and illegal activities : Sahel with Al- Qaida, terrorist groups. Development because of the weakness of the main states: cf Somalia coast controlled by pirates, Afghanistan and the Talebans. → Such territories are a symbol of the impossibility of the state to apply its rules and laws. But they are integrated into globalization thanks to the intense flows of illegal trade (drugs, weapons…) 3  Senior Year 2024-2025 Ms. Albecker → The tensions and rivalries around these inequalities of integration in globalization crystallize in a few places, mainly large maritime interfaces: the Caribbean basin, the Mediterranean, the Arab-Persian Gulf, the China Sea and the Arctic Ocean. There are also continental tensions around two interfaces: the Sahara-Sahel and the Middle East. B. A patchwork of territorial inequalities on several scales 1. Territorial inequalities Globalization standardizes certain territories (CBDs for example), but rather tends to reinforce ecological, economic, social and cultural territorial inequalities (access to resources, salaries, levels of equipment, training, etc.) The question of a fairer and more efficient sharing of wealth arises more and more; today, 10% of the world's population owns 76% of the wealth in 2022 and social inequalities are increasing within countries. Activity 2. According to these maps, what types of territories are favored/discriminated against by economic development? In many countries, poor development and corruption reinforce the territorial divisions between regions: - between cities (particularly capital city) and countryside, capital and province. For example, in Senegal (see example bank), the capital-city Dakar is the motor of the national economy. - between coasts and interior. For example, China’s coastal areas are much more developed than the interior. Tunisia has the same pattern of spatial development, with a dynamic export-oriented sector in the coastal regions alongside protected and stagnant interior regions suffering from poverty. (see example bank) LEDCs are prone to the most important social and territorial inequalities. In Phnom Penh, the capital city of Cambodia, the poverty rate is 7% against 20% in Sihanoukville (a great port of the country favored by the new silk road), and 84% in the rural areas. This core-periphery geography exists in most South-East Asian countries. Case study 1. Brazil 2. Metropolises benefit from globalization, but are prone to major inequalities a. Metropolises concentrate wealth Trade is also very localized: within each pole of the Triad (between EU members e.g.), and mainly between big metropolises/ major cities = global cities. For financial trade, the main operations are done at the national Stock Exchanges such as the ones in the Global cities (NY, Tokyo, London and Paris). Metropolises create 85% of the world's financial flows. Global cities have functions, which allow them to shine beyond their national territory. Because the major poles of globalization (North America, Western Europe and East Asia) concentrate a high level of wealth, economic development, a strong capacity for innovation and great accessibility, they house HQs of international institutions (UN in New York, WTO in Geneva, etc.). They also concentrate on strategic and command functions (TNC headquarters, world stock exchanges). These metropolises offer a dense population and on average more educated than in the rest of the country, as well as a number of high value-added service activities necessary for businesses (insurance, banking services, research and development, etc.). As a 4  Senior Year 2024-2025 Ms. Albecker consequence, Tokyo’s or New York’s GDPs are similar to the ones of Canada, Spain or Turkey. The CBDs or business districts, and their skylines, symbolize this integration into globalization. Example of London (use your memories of the trip!): - Population: large population constituting both a workforce and a consumption market London: about 9 million - History: Capital city for centuries, location of power, political functions (Westminster, Buckingham Palace) - Networks: port, airport (International Airport Heathrow, London City Airport in London), fluvial (the Thames), ground (Eurostar, TGV): helps to promote flows of goods, of exports and imports, and human flows → The economic and financial functions stand in CBDs like the City (London Stock exchange, HQ of TNCs : HSBC, Unilever, Shell) and the secondary CBD of Docklands. - Cultural functions: universities, art, entertainment parks, tourism, Olympic Games in 2012. → Cities are privileged spaces of globalization: places of connections and concentration of wealth. b. However, they are also spaces of inequalities: poor neighborhoods represent peripheries within these cores of globalization. They are necessary to the metropolises because they provide a workforce for low-wage service jobs (sanitation, food workers, etc.) In MEDCs’ cities, socio-spatial inequalities are reinforced by globalization. Poor central districts are renovated or demolished. Gentrification, driven by populations favored by globalization, causes the low-wage population to move where rents are less expensive. In NYC for example, gentrification led Harlem to become a high or medium class residential neighborhood where there used to be gang violence (80s-90s) – and nowadays the district is touristic. Rents have increased dramatically in areas outside Manhattan that were traditionally more affordable – by 76% in Williamsburg between 2000 and 2012, for example and 47% in Bedford-Stuyvesant – meaning that most New Yorkers are now considered ‘rent burdened.’ Gentrification is perceived as a threat to the city’s distinctive character. Gentrification also reinforces segregation. One in five New Yorkers lives below the poverty line, while the top 5% of Manhattanites earned more than $860,000 in 2014. In 2011, the Occupy Wall Street movement symbolized the opposition to economic inequalities (see ccl). In developing and emerging countries, the gap between rich districts and slums is increasing. The poorest populations live in the peripheries (favelas demolished in Rio for the Olympics), in districts away from the services or transport infrastructure. Sometimes well-off districts and slums are contiguous (Nairobi, Jakarta). Some districts seem to be on the fringes of globalization with the weight of the informal economy, representing 60% of the working population in 2018. But the informal economy is sometimes part of globalization (leather industry in Dharavi). Example: Kinshasa, capital-city of the Democratic Republic of the Congo: Today, most of the wealthy reside and work in downtown Gombe, the economic and political center that houses Congo's government institutions, bank headquarters and international organizations. But Gombe is pinned against the bank of the wide Congo River by miles of low-income neighborhoods and slums with narrow, congested streets and virtually no available space upon which to expand. Despite a lot of mining resources, the country remains one of the poorest in the world: according to the most recent World Bank estimates the extreme poverty rate in DRC was at 73% in 2018, one of the highest in sub-Saharan Africa. 5  Senior Year 2024-2025 Ms. Albecker II. Actors of a globalized network are fostering unequal integration → Who are the actors of the unequal integration of territories into globalization? A. Political actors establish the conditions of globalization 1. States States participate in the globalization process, by creating or dismantling free trade agreements (WTO at world level, CETA between the EU and Canada, etc.). States also carry out public policies aimed at attracting investors and TNCs on their territory (by developing free zones, for example). Indeed, their power is based on their ability to bring out economic, political and cultural models that are disseminated worldwide. To that extent, the US has been a hyperpower (see definitions on the recapitulative sheet about the Cold War) since the fall of the USSR, characterized by economic, political and diplomatic supremacy without any competition. As a consequence, it is the first to establish the conditions of globalization. The US dominates international trade, in terms of goods, services and capitals. It is the first importer of goods (in value – 12.3%). It is also the first exporter of agricultural products, before Brazil, and the second exporter of automobile products, behind Japan. However, since the 1990s, China emerged as a new rival for the US. At the beginning of the 2020s, China became the first exporter of goods, before the United States. Ex: they try to structure the BRICs, BRI (case study 2). Case study 2: The Belt and Road Initiative Furthermore, States are key actors in facilitating the integration of a country into globalization: they build infrastructures, transport networks and facilities (airports, highways, trains…) that allow countries to be competitive in trade. They also have a major role through the organization and improvement of education and training. States manage the organization of their own territories: according to its size and power, a national state can defend its national interest and its population’s interest. Political decisions can make each country more or less attractive: laws, budgetary decisions, planning policies, education and research policies. For example, the existence and the amount of a minimum wage differs greatly from one country to another and influences the investments of TNCs for developing and emerging countries. A good way to measure how States can influence their integration is globalization is the trade-to-GDP ratio (international trade, including both imports and exports, as a share of the GDP), often called the trade openness ratio. It varies a lot from one country to another, depending on its economic specialization and its choices (trade agreements, foreign direct investment…). In Asia, it's equal to 170% in the state-city of Singapore, 100% in Vietnam and 6% in North Korea. China, paradoxically, is “only” the 80th globalized country in the world. Some countries are breaking the rules laid down by international organizations, such as China, which refuses to regulate its currency, or the United States, which to date has ratified only 14 of the 189 conventions of the International Labor Organization (127 for France). In the same way, subsidies to farmers in the EU and the USA distort the rules set by the WTO. 2. International organizations regulating globalization a. Organizations created under the influence of the USA after 1945: After the war, States (mostly the USA) launched the third era of globalization, hoping to bring peace and wealth to all and to promote capitalism. Globalization is the result of political decisions and economic strategies of the most powerful capitalist countries. These authorities 6  Senior Year 2024-2025 Ms. Albecker have been deregulating trade and opening their economies (removing trade barriers and quotas with the GATT, then the WTO after 1995), imposing their liberal/capitalist viewpoint to the rest of the world. The United States had the initiative of shaping these rules and institutions from 1945, at the beginning of the Cold war (see History lesson about the end of WW2), hoping to counter the USSR model of development: · The World Bank provides loans to fund development projects in LEDCs, e.g. building schools and better roads. In the 70s and 80s against liberal economic policies. · The IMF regulates the global financial system and lends money to make countries more financially stable. Help submitted to very strict economic conditions, linked to liberalism, privatizations. Washington Consensus. · WTO, successor of the GATT since 1995, regulates the rules of trade/tariffs between countries. 164 members. · United Nations The wealthiest states are the most influential, such as in the IMF: right to vote is proportional to the financial contribution: USA = 16% of the votes. b. Informal associations of the most powerful states Negotiations about the loosening of market regulations also happen in a more informal way, through the “Gs”: · G8: Most powerful countries including the US, Canada, Japan, GB, Germany, France, Italy and Russia: key global economic development and political issues. 65% of the world trade. ! Since the war in Ukraine, Russia has been suspended, it’s thus the G7. · G20: G8 + South Africa, Saudi Arabia, Argentina, Australia, Brazil, China, South Korea, India, Indonesia, Mexico and Turkey. Consultation about international financial stability. Since 2009 it has replaced the G8 as the main economic council of wealthy nations. BRICS is the acronym coined to associate five major emerging national economies: Brazil, Russia, India, China, and South Africa. They are now 11 (see I.) Some dissensions are at work: China wishes for the BRICS’ influence to keep growing in this part of the world, while Russia is trying to fight off its actual isolation because of the war. India and Brazil were more reticent to enlarge, as they feared that such a change would benefit only China and would reduce their influence in the group. India especially doesn’t go along with the anti-western line advocated by China and Russia. B. Economic and social actors at the origin of global networks 1. Transnational Companies, central economic actors Transnational companies (TNCs) represent 25% of the world economy, with more than 80,000 of them employing more than 80 million people. They are central in globalization, since they are global companies. They invest in innovation but their activities contribute to the degradation of the environment. They are present in all areas: industry (Toyota), finance (Goldman Sachs), luxury goods (LVMH), culture (Disney), etc. The US TNCs employ nearly 35 millions of Americans, they generate $13.8 trillion in aggregate revenues in 2024, +6% from last year. TNCs made record-breaking aggregate revenues of $41 trillion in 2023. Walmart remains No. 1 for the 11th consecutive year, while Amazon reaches a new high and claims the No. 2. Saudi Aramco was the most profitable company on the list for the third year in a row. The rise of TNCs in emerging countries is the great novelty of the last decade. In 2000, six out of the top ten TNCs originated in the USA+ importance of the car industry: (General Motors, Chevron, DaimlerChrysler, Toyota, Ford). In 2024, 5 TNCs are from the US, but change of sectors: no cars anymore, but energy remains central + rise of IT and retail. 4 companies are from emerging countries. 7  Senior Year 2024-2025 Ms. Albecker In the first 500 TNCs according to the Fortune Global 500, the US (139 companies) and China (133 companies) are the first countries to be represented. 2. International division of labor and outsourcing With the global shift, TNCs benefit from the comparative advantages of territories organized into networks. Their parent companies and their headquarters (where decisions are made) are in the country of origin, located in the MEDCs. The functions of research and development are concentrated in these developed countries (designer countries). But they relocate production (relocation/outsourcing) in foreign countries à establishment of more manufacturing activities in countries with low-cost labor and less protective labor law, such as Vietnam, Bangladesh or Indonesia (workshop countries). Another example: CEECs. Central and Eastern European countries have indeed benefited enormously from the transfer of activities from Western Europe, in sectors such as automobile construction, mechanics, textiles or chemicals, from the early 1990s (following the fall of the USSR). These countries benefit from a strong industrial image and culture, trained and qualified personnel, a very attractive labor cost and, lastly, a geographic proximity to Western European consumer markets. The entry of these countries into the EU in 2004-2007 accelerated this trend as an alternative to relocations in East Asia, thanks to the common market policy and the adoption of the euro for some. This phenomenon is the result of an international division of labor and the global value chain: the companies optimize the production, choosing the most competitive factors whey they are located. This explains the enormous increase in international exchanges. Activity 3: TNCs and their influence on global production (reminder of last year) 3. Outliers of the grey globalization Grey globalization is a concept set to define illegal activities organized on a global scale. Political movements, mafias, terrorist groups, illegal trade = powerful parallel economy, which States arent controlling (selling weapons or drugs, forgery [contrefaçon], illegal immigration, prostitution...). Huge economic impacts, most of the time in the countries that appeared to be the most marginalized in globalization. Also networks. Ex: Afghanistan is producing 80% of the world production of heroin, being beneficial to the great property owners, who index the land leases prices on the heroin prices, the warlords and the leaders of international trafficking networks. ⇒ All this generates networks The main economic actors of globalization function mostly in networks because they produce and feed on multiple flows that allow the specialization of territories: material (goods), immaterial (capital, information, services) and human (tourists, students, migrants and refugees). The flows are concentrated in hubs (airports, for example), in metropolitan and coastal areas. This is especially the case with global cities, which rely on their ability to be part of the networks. For example, metropolises have intense exchanges and form a network that is sometimes denser than the relations they have with their close surroundings. The air traffic is localized in some metropolises such as LA, NY, London, Paris and Hong Kong. 25 airports are using 70% of the world air traffic → network in hubs and spokes. A French geographer, Olivier Dollfus, speaks about a “global megalopolitan archipelago.” These networks are key locations, since economic actors invest as close as possible to global networks. They favor certain territories such as metropolises and / or coastal areas so that their activities are established as close as possible to the global transport and telecommunications networks. The search for competitiveness and benefits thus puts pressure on some territories, and creates several scales of competition: between TNCs, between cities… 8  Senior Year 2024-2025 Ms. Albecker III. Cooperation and tensions in globalization A. Regional cooperation and trade blocks Regional economic associations/trade blocs have multiplied in recent decades on all continents. They structure vast internal free trade markets opening up local production to preferential regional markets. 1) The benefits of regional trade blocs Trade blocs are groups of countries that make trade agreements among themselves to reduce barriers to trade, e.g. by removing tariffs on goods (taxes on imported goods) for members. Goal: to increase trade between members (more customers), members obtain benefits from economic cooperation, made them more competitive against non-member countries → Blocs in a way prevent the development of a global economy: members rather than outsiders. The benefits of membership of a trade bloc are linked to 2 important concepts: - Economies of scale: the advantages companies gain because of increased sales. There’s a larger market for all companies within the trade bloc because it’s easier to trade with all the other member countries. This increases sales (see CEECs’ example above). - Comparative advantage: countries can concentrate on developing specific industries. Being in a trade bloc means it’s easier to trade for all the different goods and services a country needs, because trade is less restricted. So, countries can specialize in producing the things they’re good at making and trade for the things they’re not good at making. (French agriculture and luxury vs German car and machinery industries) 2) Regional associations - FREE TRADE AREA: members abolish tariffs and quotas on trade between themselves but maintain independent restrictions on imports from non-member countries: ASEAN: Association of Southeast Asian Nations. A geo-political and economic organization of 10 countries located in Southeast Asia, which was formed in 1967. Today it is the 3rd regional economic force after China and Japan, and ahead of India. ASEAN has developed its regional trade, taking advantage of its proximity to China, Japan and South Korea. USMCA: North America Free Trade Agreement. NO free movement of labor + special rules applied to key sectors (ex.: US sugar was given protection for 15 years).Some associations are pushing integration towards new cooperation. They aim to develop investments (transport) and expand trade to many other areas (health, education, security). While the EU represents the most integrated form of cooperation, the association between Canada and ASEAN also promotes academic exchanges and police cooperation. Case study 3: the USMCA - CUSTOMS UNIONS: free trade + common external tariff on imports from non-member countries. Ex Belarus, Kazakhstan, and Russia, 2010; Andean Community. - COMMON MARKET: custom union + free movement of labor and capital MERCOSUR: Mercado Común del Sur /Southern Common Market. 5 countries: Argentina, Brazil, Paraguay, Venezuela and Uruguay. 1991, customs union in 1995. - ECONOMIC (and monetary) UNIONS: common market + common economic policies (agriculture, transport, common currency, harmonized tax rates, common monetary and fiscal policy). 9  Senior Year 2024-2025 Ms. Albecker Example of the EU: 27 countries in 2024 (Brexit). Most powerful trading bloc in the world with a GDP nearly as large as that of the United States. The EU has reduced inequalities between states (see theme 3 in Geography). It also acts as a power amplifier on a global scale, for countries like France and Germany, bound by a historical compromise. However, some of these associations are struggling to boost regional dynamism. Lack of capital, narrow domestic markets, and geopolitical instability hamper cooperation to develop infrastructure (transport, digital) in developing countries. Thus, intra-zone trade remains low within ECOWAS in West Africa (10%, compared to 64% for the EU). 3. Mega Free-Trade agreements Since 2010, regional mega-agreements have been developing, aimed at fostering exchanges between regional blocs and other partners. Mega free-trade agreements signed by the EU are numerous: - in 2017, the EU signed a much-disputed free trade agreement with Canada (CETA) - JAFTA with Japan, enforced since 2019 - an agreement with Mercosur has been signed in 2019, but not ratified yet due to the opposition of European farmers (sanitary norms + environmental norms). France, in particular, opposes the treaty. - but the TAFTA negotiations (EU-USA) that started in 2013 have stopped in 2016. In 2018, a trans-Pacific economic partnership agreement was concluded under the aegis of Canada and Japan between 11 countries in the Pacific zone, also aimed at counterbalancing China's influence. More generally speaking these mega agreements are disputed because accepting them would mean giving up on each country/area standard, such as GMO in cereals. B. Tensions and conflicts in globalization 1. States playing with the limits of globalization At the international level, some States are increasingly seeking to protect their national markets and are developing protectionist policies, in a new form of competition. Indeed, since the financial and economic crisis of 2008, the global productive sector has been deeply impacted by the decline in trade and the slowdown in global GDP growth. The crisis has therefore given rise to many doubts about the ability of globalization to continue its momentum. Free trade is now called into question, especially by States, and one witnesses a new wave of «deglobalization». One of the roles of States is to protect some very weak/strategic sectors of the economy (such as agriculture, textile, weapons and steel industry) by putting trade barriers such as tariffs (even if in general tariffs had been decreasing since the signature of GATT agreements). States are doing it to protect some symbolic parts of their national economy but also by electioneering: “economic patriotism.” The United States, China and the EU are the countries most often attacked at the WTO for not respecting international agreements. About 3,000 operations of this type have already been recorded by the WTO, including more than 1,000 against China, 700 against Germany and 800 against the United States. Ex: The United States: - supports its own companies through state aid and is beginning to relocate certain industries such as the automotive industry (Ford and Fiat-Chrysler). - applies tariff barriers on the products of its main competitors. Ex of trade war US/China: tariffs of 25% on steel and 10% on aluminum, in August 2018, Biden administration has kept 10  Senior Year 2024-2025 Ms. Albecker most of the Trump administration tariffs in place and since Oct. 1st has even risen them with 100% duty on Chinese Electric Vehicles, 50% on solar cells and 25% on steel, aluminum, EV batteries and key minerals. This trade war that began in 2017 between the United States and China has a strong impact on international relations, creating instability and uncertainty in world trade. Some other ways to protect the national economy are less visible but also very effective: quotas, administrative authorization, sanitary, environmental or technical norms. It allows states to protect their industry (among other things) from competition coming from emerging countries and LEDCs (mainly in sectors such as textile, steel industry, ship building). In Japan, non-tariff barriers (standards, quotas, licenses) make it difficult for foreign firms to penetrate the market. Also, some countries, such as Cuba or North Korea, refuse globalization as they do not have a market based economy. They have been isolated from the rest of the world since the Cold War and increasingly so since the collapse of the USSR. 2. The lasting consequences of Covid-19 The COVID-19 pandemic has significantly influenced the global economy, international travel, global supply chains, and how people interact, and subsequently affect globalization in coming years. The drops in international trade and foreign direct investment are persistent and could cause de- globalization in the post-COVID-19 decade due to the increased inequalities, protectionism, and weak binding of multilateral agreement. But all in all, the impact of COVID-19 on globalization is not as severe as expected. The impact of COVID-19 on the degree of globalization also varies from country to country. For example, it positively impacts the globalization of Japan, Australia, the United States, Brazil or India. In contrast, the globalization in the United Kingdom, Egypt or China is expected to decrease. The variation of impact induced by COVID-19 on those countries is attributed to the weighting of economic, environmental and political aspects of globalization. 3. The return of conflicts disrupting globalization? Wars in Ukraine and the Middle East War is another factor to explain the isolation from globalization. When a war is going on, it severely impacts the countries, isolating them from globalization (no more trade). As an example Russia is preventing Ukraine from exporting its grain through the Black Sea and that affected the availability of food for other countries. The price of wheat and other grains have soared. In 2019, Russia and Ukraine combined, accounted for 25% of the world’s wheat exports and 14% of corn shipments. Many countries around the world are heavily dependent on these flows. The Republic of Congo, for example, relies on imports from the Black Sea region for 67% of the wheat it consumes. After food prices, energy prices are the most directly affected. Russia is one of the world’s biggest energy suppliers, providing 14% of its crude oil and 9% of its natural gas globally. The war and resulting sanctions have severed key transport links between Russia and Ukraine and the rest of the world, disrupting trade more broadly. Moreover, the Israel-Gaza and now Lebanon and Iran war is disrupting the supply from the Middle East. As a consequence, inflation has slowed down the last 2 years, but continues. Indeed, many companies have used inflation as an excuse to hike prices far beyond the rise in production costs, scoring some of the best financial quarters and highest profit margins in their history. Asthma inhalers are perhaps the most notorious example of this, with prices jumping from roughly $10 a decade ago to $100 now even though production costs have not risen radically. This is why 11  Senior Year 2024-2025 Ms. Albecker neologisms like “shrinkflation” (the practice of reducing the size or weight of a product with no corresponding reduction in price) and “greedflation” (a situation where the price increase of goods is not the result of an increase in their production costs) are developing. Some countries are even facing hyperinflation: Venezuelan, Sudan, Argentina. 3. Disputed Globalization Although globalization helped produce fabulous wealth, lift hundreds of millions of people out of poverty and spur wondrous technological advances, globalization hastened climate change and deepened inequalities. There are some clear environmental limitations to globalization. Since labor is divided, and each place specializes in specific productions, globalization requires intense trade between countries. The transportation sector makes up 24% of all carbon emissions in the world: it is a major contributor to global warming. The market economy relies on growth, when the resources of the Earth are limited. Furthermore, specialization leads to landscapes and places becoming standardized and artificialized. In the United States and Europe, many industrial jobs were exported to lower-wage countries, removing a springboard to the middle class. Citizens have been protesting outsourcing by organizing protests. Companies embarked on a worldwide scavenger hunt for low-wage workers, regardless of worker protections, environmental impact or democratic rights. They found many of them in places like Mexico, Vietnam and China. Some movements and ideas have emerged to tweak globalization into benefiting people instead of companies. Policies can achieve that, as for example the city of Paris installing a cap on Airbnb rentals to make sure housing would be more accessible, or preventing the development of dark stores (Gorillas, Cajoo etc) which can lead to logistics taking over neighborhoods. Alter-globalism for instance claims that another globalization is possible, one based on fundamental rights, social justice and the protection of the environment. Alter-globalists refuse the liberal globalization and they call for a better distribution of wealth; they also refuse the commodification of the world: they want to defend public services and allow everyone access to common goods (water, food, health...). Example: ATTAC. Conclusion: see the powerpoint. 12