This cartoon is a further illustration of the previous post, since less skilled workers are paid less, therefore most people try to get better and better qualifications until even Mcdonalds want people that at least have Ph.D. Imagine studying in school for a Ph.D. just to study in Mcdonalds!
e-globalised-4 blogged at 6:01 AM
Does Globalization Lower Wages and Export Jobs?
An important trend in labor markets in the advanced economies has been a steady shift in demand away from the less skilled toward the more skilled. This is the case however skills are defined, whether in terms of education, experience, or job classification. This trend has produced dramatic rises in wage and income inequality between the more and the less skilled in some countries, as well as unemployment among the less skilled in other countries.
In the United States, for example, wages of less-skilled workers have fallen steeply since the late 1970s relative to those of the more skilled. Between 1979 and 1988 the average wage of a college graduate relative to the average wage of a high school graduate rose by 20 percent and the average weekly earnings of males in their forties to average weekly earnings of males in their twenties rose by 25 percent. This growing inequality reverses a trend of previous decades (by some estimates going back as far as the 1910s) toward greater income equality between the more skilled and the less skilled. At the same time, the average real wage in the United States (that is, the average wage adjusted for inflation) has grown only slowly since the early 1970s and the real wage for unskilled workers has actually fallen. It has been estimated that male high school dropouts have suffered a 20 percent decline in real wages since the early 1970s.
In other countries, the impact of the demand shift has been on employment rather than on income. Except in the United Kingdom, the changes in wage differentials have generally been much less marked than in the United States. Countries with smaller increases in wage inequality suffered instead from higher rates of unemployment for less-skilled workers.
http://www.imf.org/external/pubs/ft/issues11/
An important trend in labor markets in the advanced economies has been a steady shift in demand away from the less skilled toward the more skilled. This is the case however skills are defined, whether in terms of education, experience, or job classification. This trend has produced dramatic rises in wage and income inequality between the more and the less skilled in some countries, as well as unemployment among the less skilled in other countries.
In the United States, for example, wages of less-skilled workers have fallen steeply since the late 1970s relative to those of the more skilled. Between 1979 and 1988 the average wage of a college graduate relative to the average wage of a high school graduate rose by 20 percent and the average weekly earnings of males in their forties to average weekly earnings of males in their twenties rose by 25 percent. This growing inequality reverses a trend of previous decades (by some estimates going back as far as the 1910s) toward greater income equality between the more skilled and the less skilled. At the same time, the average real wage in the United States (that is, the average wage adjusted for inflation) has grown only slowly since the early 1970s and the real wage for unskilled workers has actually fallen. It has been estimated that male high school dropouts have suffered a 20 percent decline in real wages since the early 1970s.
In other countries, the impact of the demand shift has been on employment rather than on income. Except in the United Kingdom, the changes in wage differentials have generally been much less marked than in the United States. Countries with smaller increases in wage inequality suffered instead from higher rates of unemployment for less-skilled workers.
http://www.imf.org/external/pubs/ft/issues11/
e-globalised-4 blogged at 5:50 AM
an example of a free trade agreement for small countries is the ASEAN Free Trade Area (AFTA) with Brunei, Indonesia, Malaysia, Philippines, Singapore, Thailand, Cambodia, Laos, Myanmar, Vietnam signed on 28 January 1992 in Singapore.
The primary goals of AFTA seek to:
Increase ASEAN's competitive edge as a production base in the world market through the elimination, within ASEAN, of tariffs and non-tariff barriers; and
Attract more foreign direct investment to ASEAN.
ASEAN members have the option of excluding products from the CEPT in three cases:
Temporary exclusions
Sensitive agricultural products
General exceptions (ASEAN Secretariat, 2004).
The CEPT scheme covers nearly 98% of all tariff lines in ASEAN. The only products not included in the CEPT Scheme by then, will be those in the General Exceptions category and sensitive agricultural products.
Over the course of the several years, the initial program of tariff reductions was broadened and accelerated and other "AFTA Plus" activities were initiated. This includes efforts to eliminate non-tariff barriers, harmonization of customs nomenclature, valuation, and procedures and development of common product certification standards among others.
With a population of over 550 million, companies now can exploit the opportunities presented by an integrated market of increasingly prosperous consumers.
source from: http://en.wikipedia.org/wiki/ASEAN_Free_Trade_Area
The primary goals of AFTA seek to:
Increase ASEAN's competitive edge as a production base in the world market through the elimination, within ASEAN, of tariffs and non-tariff barriers; and
Attract more foreign direct investment to ASEAN.
ASEAN members have the option of excluding products from the CEPT in three cases:
Temporary exclusions
Sensitive agricultural products
General exceptions (ASEAN Secretariat, 2004).
The CEPT scheme covers nearly 98% of all tariff lines in ASEAN. The only products not included in the CEPT Scheme by then, will be those in the General Exceptions category and sensitive agricultural products.
Over the course of the several years, the initial program of tariff reductions was broadened and accelerated and other "AFTA Plus" activities were initiated. This includes efforts to eliminate non-tariff barriers, harmonization of customs nomenclature, valuation, and procedures and development of common product certification standards among others.
With a population of over 550 million, companies now can exploit the opportunities presented by an integrated market of increasingly prosperous consumers.
source from: http://en.wikipedia.org/wiki/ASEAN_Free_Trade_Area
e-globalised-4 blogged at 6:14 PM
(I hope you like words because after the few picture posts its time to go heavy on details :)
A form of globalization is free trade and the opening of markets.
A free trade area is the result of a free trade agreement between two or more countries. A free trade area is a designated group of countries that have agreed to eliminate tariffs, quotas and preferences on most (if not all) goods between them
Free Trade Area is a region in which obstacles to unrestricted trade have been reduced to a minimum.
Within an industrialized country there are usually few if any significant barriers to the easy exchange of goods and services between parts of that country. For example, there are usually no trade tariffs or import quotas; there are usually no delays as goods pass from one part of the country to another (other than those that distance imposes); there are usually no differences of taxation and regulation.
Between countries on the other hand, many of these barriers to the easy exchange of goods can and often do occur. It is commonplace for there to be import duties of one kind or another (as goods enter a country) and the levels of sales tax and regulation often vary by country.
The aim of a free trade area is to so reduce barriers to easy exchange that trade can grow as a result of specialisation, division of labour, and most importantly via (the theory and practice of) comparative advantage. The theory of comparative advantage argues that in an unrestricted marketplace (in equilibrium) each source of production will tend to specialize in that activity where it has comparative (rather than absolute) advantage. The theory argues that the net result will be an increase in income and ultimately wealth and well-being for everyone in the free trade area. However the theory refers only to aggregate wealth and says nothing about the distribution of wealth. In fact there may be significant losers, in particular among the recently protected industries with a comparative disadvantage. The proponent of free trade can, however, retort that the gains of the gainers exceed the losses of the losers.
source from http://en.wikipedia.org/wiki/Free_trade_area
an example of a free trade area is the North American Free Trade Agreement (NAFTA) which is the worlds largest free trade area.
The North American Free Trade Agreement NAFTA called for immediately eliminating duties on the majority of tariffs between products traded among the United States, Canada and Mexico, and gradually phasing out other tariffs, over a 15-year period. Restrictions were to be removed from many categories, including motor vehicles and automotive parts, computers, textiles, and agriculture. The treaty also protected intellectual property rights (patents, copyrights, and trademarks), and outlined the removal of investment restrictions among the three countries. The agreement is trilateral in nature (that is, the stipulations apply equally to all three countries) in all areas except agriculture, in which stipulation, tariff reduction phase-out periods and protection of selected industries, were negotiated bilaterally. Provisions regarding worker and environmental protection were added later as a result of supplemental agreements signed in 1993.
This agreement was an expansion of the earlier Canada-U.S. Free Trade Agreement of 1988. Unlike the European Union, NAFTA does not create a set of supranational governmental bodies, nor does it create a body of law superior to national law. NAFTA is a treaty under international law. Under United States law it is classed as a congressional-executive agreement rather than a treaty, reflecting a peculiar sense of the term "treaty" in United States constitutional law that is not followed by international law or the laws of other nations.
source from http://en.wikipedia.org/wiki/North_American_Free_Trade_Agreement
there are both positive and negative results of this trade agreement.
the most obvious positive result is that Canadian product exports to both Mexico and the United States roughly doubled between 1994 and 2000, from C$1 billion to C$2 billion to Mexico, and from C$183 billion to C$359 billion to the United States. NAFTA has made Canada more attractive to foreign and domestic investors.
Benefits for US customers
-more free trade resulting in greater choices in goods and services
-lower prices and improved quality products
-stronger health and safety standards
-improved economic stability in the U.S. marketplace
-a marketplace that is increasingly driven more by supply and demand than by barriers to commerce
Benefits for US business
-larger North American market access
-new export and investment opportunities
-elimination of tariffs; Canadian and U.S. tariffs were eliminated on January 1,
-1998; Mexico will be duty free by the year 2008 for North American made products
-creation of strong "rules of origin" for North American made products
-effective procedures to resolve trade disputes
-establishment of compatible standards of goods between the three countries
-facilitation of cross-border movement of goods and services
however there is a downside to this agreement like a downside to globalization
for example there are those who argue that U.S. exports to Mexico have increased dramatically as a result of that nation's economic reforms and that the prospect of NAFTA means more exports and more jobs. However, the rise in exports can be misleading. In 1992, 35% of US. exports to Mexico, $14,100,000,000, went to maquiladoras. These are exports that return to the US. as transformed products. Moreover, over one-third of American exports to Mexico in 1992, $13,600,000,000, were capital goods - those associated with investment in plants and equipment that undoubtedly will result in finished products exported back to the US. This increase in exports is likely to be short-term as Mexico establishes its infrastructure. Once Mexico is able to produce its own capital goods, it will not need to rely on imports from the US.
In my opinion the free trade agreement would mostly benefit the US as they have more goods to exports, this would also result in the creation of more jobs due to higher exports. For example, Mexico would be flooded with Us exported goods which would add to the competition of Mexico's economy.
A form of globalization is free trade and the opening of markets.
A free trade area is the result of a free trade agreement between two or more countries. A free trade area is a designated group of countries that have agreed to eliminate tariffs, quotas and preferences on most (if not all) goods between them
Free Trade Area is a region in which obstacles to unrestricted trade have been reduced to a minimum.
Within an industrialized country there are usually few if any significant barriers to the easy exchange of goods and services between parts of that country. For example, there are usually no trade tariffs or import quotas; there are usually no delays as goods pass from one part of the country to another (other than those that distance imposes); there are usually no differences of taxation and regulation.
Between countries on the other hand, many of these barriers to the easy exchange of goods can and often do occur. It is commonplace for there to be import duties of one kind or another (as goods enter a country) and the levels of sales tax and regulation often vary by country.
The aim of a free trade area is to so reduce barriers to easy exchange that trade can grow as a result of specialisation, division of labour, and most importantly via (the theory and practice of) comparative advantage. The theory of comparative advantage argues that in an unrestricted marketplace (in equilibrium) each source of production will tend to specialize in that activity where it has comparative (rather than absolute) advantage. The theory argues that the net result will be an increase in income and ultimately wealth and well-being for everyone in the free trade area. However the theory refers only to aggregate wealth and says nothing about the distribution of wealth. In fact there may be significant losers, in particular among the recently protected industries with a comparative disadvantage. The proponent of free trade can, however, retort that the gains of the gainers exceed the losses of the losers.
source from http://en.wikipedia.org/wiki/Free_trade_area
an example of a free trade area is the North American Free Trade Agreement (NAFTA) which is the worlds largest free trade area.
The North American Free Trade Agreement NAFTA called for immediately eliminating duties on the majority of tariffs between products traded among the United States, Canada and Mexico, and gradually phasing out other tariffs, over a 15-year period. Restrictions were to be removed from many categories, including motor vehicles and automotive parts, computers, textiles, and agriculture. The treaty also protected intellectual property rights (patents, copyrights, and trademarks), and outlined the removal of investment restrictions among the three countries. The agreement is trilateral in nature (that is, the stipulations apply equally to all three countries) in all areas except agriculture, in which stipulation, tariff reduction phase-out periods and protection of selected industries, were negotiated bilaterally. Provisions regarding worker and environmental protection were added later as a result of supplemental agreements signed in 1993.
This agreement was an expansion of the earlier Canada-U.S. Free Trade Agreement of 1988. Unlike the European Union, NAFTA does not create a set of supranational governmental bodies, nor does it create a body of law superior to national law. NAFTA is a treaty under international law. Under United States law it is classed as a congressional-executive agreement rather than a treaty, reflecting a peculiar sense of the term "treaty" in United States constitutional law that is not followed by international law or the laws of other nations.
source from http://en.wikipedia.org/wiki/North_American_Free_Trade_Agreement
there are both positive and negative results of this trade agreement.
the most obvious positive result is that Canadian product exports to both Mexico and the United States roughly doubled between 1994 and 2000, from C$1 billion to C$2 billion to Mexico, and from C$183 billion to C$359 billion to the United States. NAFTA has made Canada more attractive to foreign and domestic investors.
Benefits for US customers
-more free trade resulting in greater choices in goods and services
-lower prices and improved quality products
-stronger health and safety standards
-improved economic stability in the U.S. marketplace
-a marketplace that is increasingly driven more by supply and demand than by barriers to commerce
Benefits for US business
-larger North American market access
-new export and investment opportunities
-elimination of tariffs; Canadian and U.S. tariffs were eliminated on January 1,
-1998; Mexico will be duty free by the year 2008 for North American made products
-creation of strong "rules of origin" for North American made products
-effective procedures to resolve trade disputes
-establishment of compatible standards of goods between the three countries
-facilitation of cross-border movement of goods and services
however there is a downside to this agreement like a downside to globalization
for example there are those who argue that U.S. exports to Mexico have increased dramatically as a result of that nation's economic reforms and that the prospect of NAFTA means more exports and more jobs. However, the rise in exports can be misleading. In 1992, 35% of US. exports to Mexico, $14,100,000,000, went to maquiladoras. These are exports that return to the US. as transformed products. Moreover, over one-third of American exports to Mexico in 1992, $13,600,000,000, were capital goods - those associated with investment in plants and equipment that undoubtedly will result in finished products exported back to the US. This increase in exports is likely to be short-term as Mexico establishes its infrastructure. Once Mexico is able to produce its own capital goods, it will not need to rely on imports from the US.
In my opinion the free trade agreement would mostly benefit the US as they have more goods to exports, this would also result in the creation of more jobs due to higher exports. For example, Mexico would be flooded with Us exported goods which would add to the competition of Mexico's economy.
e-globalised-4 blogged at 5:04 AM
and next in our 'Third World country series' is the impact the WTO has on the Third World country and globalization.
In the comic, it portrays the WTO as elephants and that everytime they held talks, the Third World countries or the ants would get crushed as they would not be able to raise their protests or fight for their rights against the elephants or rich nations. For example, the card the elephant holding on the right is 'obscene subsidies' this refers to agricultural products. The globalization of the world economy caused many of the Third World countries to have experienced a downturn in their sale of crops as the local producers cannot compete with agricultural exports from major countries such as the United States which dump their surplus crops at a low price. Third world countries cannot afford to subsidize their own domestic agricultural industries compared to the subsidies that the Europe, Japan and the United States agriculture receive.
The left elephant is holding a card called protectionism which is the advocacy, system, or theory of protecting domestic producers by impeding or limiting, as by tariffs or quotas, the importation of foreign goods and services (definition from answers.com), the governement of rich countries massively subsidize their producers and impose export subsidies, therefore allowing them to dump thier goods at a lower cost at Third World countries while imposing import and tariff duties to protect their domestic goods by rising the prices of foreign ones. tThese methods therefore have a disastrous effect on the Third World countries as not only they could sell their goods locally but they could not export it due to the import and tariff duties. The rich countries are seen as hypocrites as they persuade Third World countries to open up their market while closing down theirs.
sources from:
http://www.newsbatch.com/globalization.htm
a nice board game for the Third World countries
In the comic, it portrays the WTO as elephants and that everytime they held talks, the Third World countries or the ants would get crushed as they would not be able to raise their protests or fight for their rights against the elephants or rich nations. For example, the card the elephant holding on the right is 'obscene subsidies' this refers to agricultural products. The globalization of the world economy caused many of the Third World countries to have experienced a downturn in their sale of crops as the local producers cannot compete with agricultural exports from major countries such as the United States which dump their surplus crops at a low price. Third world countries cannot afford to subsidize their own domestic agricultural industries compared to the subsidies that the Europe, Japan and the United States agriculture receive.
The left elephant is holding a card called protectionism which is the advocacy, system, or theory of protecting domestic producers by impeding or limiting, as by tariffs or quotas, the importation of foreign goods and services (definition from answers.com), the governement of rich countries massively subsidize their producers and impose export subsidies, therefore allowing them to dump thier goods at a lower cost at Third World countries while imposing import and tariff duties to protect their domestic goods by rising the prices of foreign ones. tThese methods therefore have a disastrous effect on the Third World countries as not only they could sell their goods locally but they could not export it due to the import and tariff duties. The rich countries are seen as hypocrites as they persuade Third World countries to open up their market while closing down theirs.
sources from:
http://www.newsbatch.com/globalization.htm
http://www.free-europe.org/blog/?itemid=179
a nice board game for the Third World countries
e-globalised-4 blogged at 9:34 PM
Thursday, April 19, 2007 - /Against/I don't like/down with/Anti/de-/ gloilization and third world countries :
In the picture most of the third world country's profits are being taken away to pay their debt, and they are only left with a small charitable aid to support their country's people and economy.
This was actually sparked off by colonial rule,accompanied with new economic systems and participation of the global market where Third World resources are being exported. Third World countries grew more dependent on global trading and financial and investment systems and they were loaned billions of dollars to fianance technologies which would mordenize the Third World.
For example, US industries and other Western companies have invested heavily on the Third World economy as they were attracted by natural resources and cheap labour. American agribusiness cartels, heavily subsidized by U.S. taxpayers, dump surplus products in other countries at below cost and undersell local farmers, therefore causing more farmers to turn to cash crops (such as coca and cotton) to export to other countries to make money therefore leaving less acres of farming areas to grow crops to feed the local population. The savings that the big businesses reap of the cheap labour in Third World countries left the governments with very little money to settle thier debt. Therefore the Third World countries are sucked into a vicious cycle of national debts, being exploited by Western industries and poverty.
source from http://www.ivcs.org.uk/intaf/intaf8.html
here is a picture to further illustrate the debt faced by Third World countries.
here is a picture to further illustrate the debt faced by Third World countries.
the debt of the Third World countries was $1.3 trillion at 1990 with the top debtors were Brazil ($116 billion), Mexico ($97 billion), and Argentina ($61 billion). Of the total developing-country debt, roughly half is owed to private creditors, mainly commercial banks.
figures from http://www.econlib.org/library/Enc/ThirdWorldDebt.html
e-globalised-4 blogged at 7:43 AM
picture courtesy of
This cartoons is actually mocking the importance of the United States of America on the world market and that something simple as the wife of the U.S federal reserve chairman burning toast could cause worldwide troubles such as economical crisis such as panic selling and people hoarding on to food stocks all because the toast was burnt and people were afraid that there would be a shortage of food. This cartoon shows that economic globilization, as something happening in America's economy could affect another country's economy.
The person mention in the cartoon Alan Greenspan is the chairman of the United States federal reserve board which is in charge of the Federal Reserve Bank from 1987-2006.
Under the Federal Reserve Act of 1913 the Federal Reserve System:
-Conducts America’s monetary policy.
-Supervises and regulates banks and protects consumers’ credit rights.
-Maintains the stability of America’s financial system
-Provides financial services to the U.S. Government, the public, financial institutions, and foreign financial institutions.
Therefore if the Federal Reserve of the United States government in is crisis, there would also be a high chance that the Americal fiancial system would be in chaos, thus affecting the economy of other countries as many countries are dependant on the United States for trade
Here is another cartoon I have drawn with the same concept hope you like it :)
e-globalised-4 blogged at 9:01 AM
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This cartoon is a further illustration of the previous post, since less skilled workers are paid less, therefore most people try to get better and better qualifications until even Mcdonalds want people that at least have Ph.D. Imagine studying in school for a Ph.D. just to study in Mcdonalds!
e-globalised-4 blogged at 6:01 AM
Does Globalization Lower Wages and Export Jobs?
An important trend in labor markets in the advanced economies has been a steady shift in demand away from the less skilled toward the more skilled. This is the case however skills are defined, whether in terms of education, experience, or job classification. This trend has produced dramatic rises in wage and income inequality between the more and the less skilled in some countries, as well as unemployment among the less skilled in other countries.
In the United States, for example, wages of less-skilled workers have fallen steeply since the late 1970s relative to those of the more skilled. Between 1979 and 1988 the average wage of a college graduate relative to the average wage of a high school graduate rose by 20 percent and the average weekly earnings of males in their forties to average weekly earnings of males in their twenties rose by 25 percent. This growing inequality reverses a trend of previous decades (by some estimates going back as far as the 1910s) toward greater income equality between the more skilled and the less skilled. At the same time, the average real wage in the United States (that is, the average wage adjusted for inflation) has grown only slowly since the early 1970s and the real wage for unskilled workers has actually fallen. It has been estimated that male high school dropouts have suffered a 20 percent decline in real wages since the early 1970s.
In other countries, the impact of the demand shift has been on employment rather than on income. Except in the United Kingdom, the changes in wage differentials have generally been much less marked than in the United States. Countries with smaller increases in wage inequality suffered instead from higher rates of unemployment for less-skilled workers.
http://www.imf.org/external/pubs/ft/issues11/
An important trend in labor markets in the advanced economies has been a steady shift in demand away from the less skilled toward the more skilled. This is the case however skills are defined, whether in terms of education, experience, or job classification. This trend has produced dramatic rises in wage and income inequality between the more and the less skilled in some countries, as well as unemployment among the less skilled in other countries.
In the United States, for example, wages of less-skilled workers have fallen steeply since the late 1970s relative to those of the more skilled. Between 1979 and 1988 the average wage of a college graduate relative to the average wage of a high school graduate rose by 20 percent and the average weekly earnings of males in their forties to average weekly earnings of males in their twenties rose by 25 percent. This growing inequality reverses a trend of previous decades (by some estimates going back as far as the 1910s) toward greater income equality between the more skilled and the less skilled. At the same time, the average real wage in the United States (that is, the average wage adjusted for inflation) has grown only slowly since the early 1970s and the real wage for unskilled workers has actually fallen. It has been estimated that male high school dropouts have suffered a 20 percent decline in real wages since the early 1970s.
In other countries, the impact of the demand shift has been on employment rather than on income. Except in the United Kingdom, the changes in wage differentials have generally been much less marked than in the United States. Countries with smaller increases in wage inequality suffered instead from higher rates of unemployment for less-skilled workers.
http://www.imf.org/external/pubs/ft/issues11/
e-globalised-4 blogged at 5:50 AM
an example of a free trade agreement for small countries is the ASEAN Free Trade Area (AFTA) with Brunei, Indonesia, Malaysia, Philippines, Singapore, Thailand, Cambodia, Laos, Myanmar, Vietnam signed on 28 January 1992 in Singapore.
The primary goals of AFTA seek to:
Increase ASEAN's competitive edge as a production base in the world market through the elimination, within ASEAN, of tariffs and non-tariff barriers; and
Attract more foreign direct investment to ASEAN.
ASEAN members have the option of excluding products from the CEPT in three cases:
Temporary exclusions
Sensitive agricultural products
General exceptions (ASEAN Secretariat, 2004).
The CEPT scheme covers nearly 98% of all tariff lines in ASEAN. The only products not included in the CEPT Scheme by then, will be those in the General Exceptions category and sensitive agricultural products.
Over the course of the several years, the initial program of tariff reductions was broadened and accelerated and other "AFTA Plus" activities were initiated. This includes efforts to eliminate non-tariff barriers, harmonization of customs nomenclature, valuation, and procedures and development of common product certification standards among others.
With a population of over 550 million, companies now can exploit the opportunities presented by an integrated market of increasingly prosperous consumers.
source from: http://en.wikipedia.org/wiki/ASEAN_Free_Trade_Area
The primary goals of AFTA seek to:
Increase ASEAN's competitive edge as a production base in the world market through the elimination, within ASEAN, of tariffs and non-tariff barriers; and
Attract more foreign direct investment to ASEAN.
ASEAN members have the option of excluding products from the CEPT in three cases:
Temporary exclusions
Sensitive agricultural products
General exceptions (ASEAN Secretariat, 2004).
The CEPT scheme covers nearly 98% of all tariff lines in ASEAN. The only products not included in the CEPT Scheme by then, will be those in the General Exceptions category and sensitive agricultural products.
Over the course of the several years, the initial program of tariff reductions was broadened and accelerated and other "AFTA Plus" activities were initiated. This includes efforts to eliminate non-tariff barriers, harmonization of customs nomenclature, valuation, and procedures and development of common product certification standards among others.
With a population of over 550 million, companies now can exploit the opportunities presented by an integrated market of increasingly prosperous consumers.
source from: http://en.wikipedia.org/wiki/ASEAN_Free_Trade_Area
e-globalised-4 blogged at 6:14 PM
(I hope you like words because after the few picture posts its time to go heavy on details :)
A form of globalization is free trade and the opening of markets.
A free trade area is the result of a free trade agreement between two or more countries. A free trade area is a designated group of countries that have agreed to eliminate tariffs, quotas and preferences on most (if not all) goods between them
Free Trade Area is a region in which obstacles to unrestricted trade have been reduced to a minimum.
Within an industrialized country there are usually few if any significant barriers to the easy exchange of goods and services between parts of that country. For example, there are usually no trade tariffs or import quotas; there are usually no delays as goods pass from one part of the country to another (other than those that distance imposes); there are usually no differences of taxation and regulation.
Between countries on the other hand, many of these barriers to the easy exchange of goods can and often do occur. It is commonplace for there to be import duties of one kind or another (as goods enter a country) and the levels of sales tax and regulation often vary by country.
The aim of a free trade area is to so reduce barriers to easy exchange that trade can grow as a result of specialisation, division of labour, and most importantly via (the theory and practice of) comparative advantage. The theory of comparative advantage argues that in an unrestricted marketplace (in equilibrium) each source of production will tend to specialize in that activity where it has comparative (rather than absolute) advantage. The theory argues that the net result will be an increase in income and ultimately wealth and well-being for everyone in the free trade area. However the theory refers only to aggregate wealth and says nothing about the distribution of wealth. In fact there may be significant losers, in particular among the recently protected industries with a comparative disadvantage. The proponent of free trade can, however, retort that the gains of the gainers exceed the losses of the losers.
source from http://en.wikipedia.org/wiki/Free_trade_area
an example of a free trade area is the North American Free Trade Agreement (NAFTA) which is the worlds largest free trade area.
The North American Free Trade Agreement NAFTA called for immediately eliminating duties on the majority of tariffs between products traded among the United States, Canada and Mexico, and gradually phasing out other tariffs, over a 15-year period. Restrictions were to be removed from many categories, including motor vehicles and automotive parts, computers, textiles, and agriculture. The treaty also protected intellectual property rights (patents, copyrights, and trademarks), and outlined the removal of investment restrictions among the three countries. The agreement is trilateral in nature (that is, the stipulations apply equally to all three countries) in all areas except agriculture, in which stipulation, tariff reduction phase-out periods and protection of selected industries, were negotiated bilaterally. Provisions regarding worker and environmental protection were added later as a result of supplemental agreements signed in 1993.
This agreement was an expansion of the earlier Canada-U.S. Free Trade Agreement of 1988. Unlike the European Union, NAFTA does not create a set of supranational governmental bodies, nor does it create a body of law superior to national law. NAFTA is a treaty under international law. Under United States law it is classed as a congressional-executive agreement rather than a treaty, reflecting a peculiar sense of the term "treaty" in United States constitutional law that is not followed by international law or the laws of other nations.
source from http://en.wikipedia.org/wiki/North_American_Free_Trade_Agreement
there are both positive and negative results of this trade agreement.
the most obvious positive result is that Canadian product exports to both Mexico and the United States roughly doubled between 1994 and 2000, from C$1 billion to C$2 billion to Mexico, and from C$183 billion to C$359 billion to the United States. NAFTA has made Canada more attractive to foreign and domestic investors.
Benefits for US customers
-more free trade resulting in greater choices in goods and services
-lower prices and improved quality products
-stronger health and safety standards
-improved economic stability in the U.S. marketplace
-a marketplace that is increasingly driven more by supply and demand than by barriers to commerce
Benefits for US business
-larger North American market access
-new export and investment opportunities
-elimination of tariffs; Canadian and U.S. tariffs were eliminated on January 1,
-1998; Mexico will be duty free by the year 2008 for North American made products
-creation of strong "rules of origin" for North American made products
-effective procedures to resolve trade disputes
-establishment of compatible standards of goods between the three countries
-facilitation of cross-border movement of goods and services
however there is a downside to this agreement like a downside to globalization
for example there are those who argue that U.S. exports to Mexico have increased dramatically as a result of that nation's economic reforms and that the prospect of NAFTA means more exports and more jobs. However, the rise in exports can be misleading. In 1992, 35% of US. exports to Mexico, $14,100,000,000, went to maquiladoras. These are exports that return to the US. as transformed products. Moreover, over one-third of American exports to Mexico in 1992, $13,600,000,000, were capital goods - those associated with investment in plants and equipment that undoubtedly will result in finished products exported back to the US. This increase in exports is likely to be short-term as Mexico establishes its infrastructure. Once Mexico is able to produce its own capital goods, it will not need to rely on imports from the US.
In my opinion the free trade agreement would mostly benefit the US as they have more goods to exports, this would also result in the creation of more jobs due to higher exports. For example, Mexico would be flooded with Us exported goods which would add to the competition of Mexico's economy.
A form of globalization is free trade and the opening of markets.
A free trade area is the result of a free trade agreement between two or more countries. A free trade area is a designated group of countries that have agreed to eliminate tariffs, quotas and preferences on most (if not all) goods between them
Free Trade Area is a region in which obstacles to unrestricted trade have been reduced to a minimum.
Within an industrialized country there are usually few if any significant barriers to the easy exchange of goods and services between parts of that country. For example, there are usually no trade tariffs or import quotas; there are usually no delays as goods pass from one part of the country to another (other than those that distance imposes); there are usually no differences of taxation and regulation.
Between countries on the other hand, many of these barriers to the easy exchange of goods can and often do occur. It is commonplace for there to be import duties of one kind or another (as goods enter a country) and the levels of sales tax and regulation often vary by country.
The aim of a free trade area is to so reduce barriers to easy exchange that trade can grow as a result of specialisation, division of labour, and most importantly via (the theory and practice of) comparative advantage. The theory of comparative advantage argues that in an unrestricted marketplace (in equilibrium) each source of production will tend to specialize in that activity where it has comparative (rather than absolute) advantage. The theory argues that the net result will be an increase in income and ultimately wealth and well-being for everyone in the free trade area. However the theory refers only to aggregate wealth and says nothing about the distribution of wealth. In fact there may be significant losers, in particular among the recently protected industries with a comparative disadvantage. The proponent of free trade can, however, retort that the gains of the gainers exceed the losses of the losers.
source from http://en.wikipedia.org/wiki/Free_trade_area
an example of a free trade area is the North American Free Trade Agreement (NAFTA) which is the worlds largest free trade area.
The North American Free Trade Agreement NAFTA called for immediately eliminating duties on the majority of tariffs between products traded among the United States, Canada and Mexico, and gradually phasing out other tariffs, over a 15-year period. Restrictions were to be removed from many categories, including motor vehicles and automotive parts, computers, textiles, and agriculture. The treaty also protected intellectual property rights (patents, copyrights, and trademarks), and outlined the removal of investment restrictions among the three countries. The agreement is trilateral in nature (that is, the stipulations apply equally to all three countries) in all areas except agriculture, in which stipulation, tariff reduction phase-out periods and protection of selected industries, were negotiated bilaterally. Provisions regarding worker and environmental protection were added later as a result of supplemental agreements signed in 1993.
This agreement was an expansion of the earlier Canada-U.S. Free Trade Agreement of 1988. Unlike the European Union, NAFTA does not create a set of supranational governmental bodies, nor does it create a body of law superior to national law. NAFTA is a treaty under international law. Under United States law it is classed as a congressional-executive agreement rather than a treaty, reflecting a peculiar sense of the term "treaty" in United States constitutional law that is not followed by international law or the laws of other nations.
source from http://en.wikipedia.org/wiki/North_American_Free_Trade_Agreement
there are both positive and negative results of this trade agreement.
the most obvious positive result is that Canadian product exports to both Mexico and the United States roughly doubled between 1994 and 2000, from C$1 billion to C$2 billion to Mexico, and from C$183 billion to C$359 billion to the United States. NAFTA has made Canada more attractive to foreign and domestic investors.
Benefits for US customers
-more free trade resulting in greater choices in goods and services
-lower prices and improved quality products
-stronger health and safety standards
-improved economic stability in the U.S. marketplace
-a marketplace that is increasingly driven more by supply and demand than by barriers to commerce
Benefits for US business
-larger North American market access
-new export and investment opportunities
-elimination of tariffs; Canadian and U.S. tariffs were eliminated on January 1,
-1998; Mexico will be duty free by the year 2008 for North American made products
-creation of strong "rules of origin" for North American made products
-effective procedures to resolve trade disputes
-establishment of compatible standards of goods between the three countries
-facilitation of cross-border movement of goods and services
however there is a downside to this agreement like a downside to globalization
for example there are those who argue that U.S. exports to Mexico have increased dramatically as a result of that nation's economic reforms and that the prospect of NAFTA means more exports and more jobs. However, the rise in exports can be misleading. In 1992, 35% of US. exports to Mexico, $14,100,000,000, went to maquiladoras. These are exports that return to the US. as transformed products. Moreover, over one-third of American exports to Mexico in 1992, $13,600,000,000, were capital goods - those associated with investment in plants and equipment that undoubtedly will result in finished products exported back to the US. This increase in exports is likely to be short-term as Mexico establishes its infrastructure. Once Mexico is able to produce its own capital goods, it will not need to rely on imports from the US.
In my opinion the free trade agreement would mostly benefit the US as they have more goods to exports, this would also result in the creation of more jobs due to higher exports. For example, Mexico would be flooded with Us exported goods which would add to the competition of Mexico's economy.
e-globalised-4 blogged at 5:04 AM
and next in our 'Third World country series' is the impact the WTO has on the Third World country and globalization.
In the comic, it portrays the WTO as elephants and that everytime they held talks, the Third World countries or the ants would get crushed as they would not be able to raise their protests or fight for their rights against the elephants or rich nations. For example, the card the elephant holding on the right is 'obscene subsidies' this refers to agricultural products. The globalization of the world economy caused many of the Third World countries to have experienced a downturn in their sale of crops as the local producers cannot compete with agricultural exports from major countries such as the United States which dump their surplus crops at a low price. Third world countries cannot afford to subsidize their own domestic agricultural industries compared to the subsidies that the Europe, Japan and the United States agriculture receive.
The left elephant is holding a card called protectionism which is the advocacy, system, or theory of protecting domestic producers by impeding or limiting, as by tariffs or quotas, the importation of foreign goods and services (definition from answers.com), the governement of rich countries massively subsidize their producers and impose export subsidies, therefore allowing them to dump thier goods at a lower cost at Third World countries while imposing import and tariff duties to protect their domestic goods by rising the prices of foreign ones. tThese methods therefore have a disastrous effect on the Third World countries as not only they could sell their goods locally but they could not export it due to the import and tariff duties. The rich countries are seen as hypocrites as they persuade Third World countries to open up their market while closing down theirs.
sources from:
http://www.newsbatch.com/globalization.htm
a nice board game for the Third World countries
In the comic, it portrays the WTO as elephants and that everytime they held talks, the Third World countries or the ants would get crushed as they would not be able to raise their protests or fight for their rights against the elephants or rich nations. For example, the card the elephant holding on the right is 'obscene subsidies' this refers to agricultural products. The globalization of the world economy caused many of the Third World countries to have experienced a downturn in their sale of crops as the local producers cannot compete with agricultural exports from major countries such as the United States which dump their surplus crops at a low price. Third world countries cannot afford to subsidize their own domestic agricultural industries compared to the subsidies that the Europe, Japan and the United States agriculture receive.
The left elephant is holding a card called protectionism which is the advocacy, system, or theory of protecting domestic producers by impeding or limiting, as by tariffs or quotas, the importation of foreign goods and services (definition from answers.com), the governement of rich countries massively subsidize their producers and impose export subsidies, therefore allowing them to dump thier goods at a lower cost at Third World countries while imposing import and tariff duties to protect their domestic goods by rising the prices of foreign ones. tThese methods therefore have a disastrous effect on the Third World countries as not only they could sell their goods locally but they could not export it due to the import and tariff duties. The rich countries are seen as hypocrites as they persuade Third World countries to open up their market while closing down theirs.
sources from:
http://www.newsbatch.com/globalization.htm
http://www.free-europe.org/blog/?itemid=179
a nice board game for the Third World countries
e-globalised-4 blogged at 9:34 PM
Thursday, April 19, 2007 - /Against/I don't like/down with/Anti/de-/ gloilization and third world countries :
In the picture most of the third world country's profits are being taken away to pay their debt, and they are only left with a small charitable aid to support their country's people and economy.
This was actually sparked off by colonial rule,accompanied with new economic systems and participation of the global market where Third World resources are being exported. Third World countries grew more dependent on global trading and financial and investment systems and they were loaned billions of dollars to fianance technologies which would mordenize the Third World.
For example, US industries and other Western companies have invested heavily on the Third World economy as they were attracted by natural resources and cheap labour. American agribusiness cartels, heavily subsidized by U.S. taxpayers, dump surplus products in other countries at below cost and undersell local farmers, therefore causing more farmers to turn to cash crops (such as coca and cotton) to export to other countries to make money therefore leaving less acres of farming areas to grow crops to feed the local population. The savings that the big businesses reap of the cheap labour in Third World countries left the governments with very little money to settle thier debt. Therefore the Third World countries are sucked into a vicious cycle of national debts, being exploited by Western industries and poverty.
source from http://www.ivcs.org.uk/intaf/intaf8.html
here is a picture to further illustrate the debt faced by Third World countries.
here is a picture to further illustrate the debt faced by Third World countries.
the debt of the Third World countries was $1.3 trillion at 1990 with the top debtors were Brazil ($116 billion), Mexico ($97 billion), and Argentina ($61 billion). Of the total developing-country debt, roughly half is owed to private creditors, mainly commercial banks.
figures from http://www.econlib.org/library/Enc/ThirdWorldDebt.html
e-globalised-4 blogged at 7:43 AM
picture courtesy of
This cartoons is actually mocking the importance of the United States of America on the world market and that something simple as the wife of the U.S federal reserve chairman burning toast could cause worldwide troubles such as economical crisis such as panic selling and people hoarding on to food stocks all because the toast was burnt and people were afraid that there would be a shortage of food. This cartoon shows that economic globilization, as something happening in America's economy could affect another country's economy.
The person mention in the cartoon Alan Greenspan is the chairman of the United States federal reserve board which is in charge of the Federal Reserve Bank from 1987-2006.
Under the Federal Reserve Act of 1913 the Federal Reserve System:
-Conducts America’s monetary policy.
-Supervises and regulates banks and protects consumers’ credit rights.
-Maintains the stability of America’s financial system
-Provides financial services to the U.S. Government, the public, financial institutions, and foreign financial institutions.
Therefore if the Federal Reserve of the United States government in is crisis, there would also be a high chance that the Americal fiancial system would be in chaos, thus affecting the economy of other countries as many countries are dependant on the United States for trade
Here is another cartoon I have drawn with the same concept hope you like it :)
e-globalised-4 blogged at 9:01 AM
