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Georgia Council on Economic Education w w w. g c e e. o r g Driving Forces Behind Globalization and International Trade.

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Presentation on theme: "Georgia Council on Economic Education w w w. g c e e. o r g Driving Forces Behind Globalization and International Trade."— Presentation transcript:

1 Georgia Council on Economic Education w w w. g c e e. o r g Driving Forces Behind Globalization and International Trade

2 Georgia Council on Economic Education w w w. g c e e. o r g Globalization The term was popularized by Theodore Levitt in his article, “Globalization of Markets”, published in the Harvard Business Review, 1983, May-June issue.

3 Georgia Council on Economic Education w w w. g c e e. o r g Globalization Five Factors – Increase in the Volume of Trade Mobility of Labor Changes in What is Traded Changes in Technology Changes in Trade Policies

4 Georgia Council on Economic Education w w w. g c e e. o r g Globalization: driving forces 1.Dramatic growth in international trade. –Between , US imports grew from 4.2% to 13.8% of GDP. Exports grew from 4.9% to 9.3% GDP. –Since 1950, world trade has increased 20 fold. –Between , world trade doubled from $468b. to $827b.

5 Georgia Council on Economic Education w w w. g c e e. o r g Globalization: driving forces 2.Mobility of Labor –In 2001, the US had 20 million immigrants, comprising 13.9% of the labor force— approximately twice as high as in the l970s

6 Georgia Council on Economic Education w w w. g c e e. o r g Net Migration Flow by Region, Region North America Europe Oceania Africa Latin America/Caribbean Asia Source: UN Population Division Average Annual Net flow of migrants 1,394, ,000 90, , ,000 -1,311,000 Globalization: driving forces

7 Georgia Council on Economic Education w w w. g c e e. o r g Globalization: driving forces 3. Evolution of Trade –Changes in what is traded –Changes in how trade is conducted –Growth of Multi-National Corporations

8 Georgia Council on Economic Education w w w. g c e e. o r g Fortune Global 500, 2006 Top 10, ranked by revenues  Exxon Mobil  Wal-Mart Stores  Royal Dutch Shell  BP  General Motors  Chevron  DaimlerChrysler  Toyota Motor  Ford Motor  ConocoPhillips

9 Georgia Council on Economic Education w w w. g c e e. o r g Globalization: driving forces 4. Changes in Technology –Use of Internet and www –Increased sales of PCs—almost 200% between 2000 and 2006 –eCommerce—from $130.2 billion in 1999 to $1.640 trillion in 2003 –Impacts worker productivity

10 Driving Forces of Trade Communication Technology

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12 Georgia Council on Economic Education w w w. g c e e. o r g Globalization: driving forces 5. Changes in Trade Policies –Freer trade—over 40 years, GATT lowered world-wide tariff rates from about 40% to 5% –Open economies –Trade agreements NAFTA ASEAN European Union

13 Georgia Council on Economic Education w w w. g c e e. o r g The Global Top 20— 2006 Rankings 1. Singapore 2. Switzerland 3. United States 4. Ireland 5. Denmark 6. Canada 7. Netherlands 8. Australia 9. Austria 10.Sweden 11. New Zealand 12. United Kingdom 13. Finland 14. Norway 15. Israel 16. Czech Republic 17. Slovenia 18. Germany 19. Malaysia 20.Hungary Source:

14 Blessing ? … or Curse?

15 Georgia Council on Economic Education w w w. g c e e. o r g Some controversial issues Health Pandemics Migration Outsourcing/Off-shoring Cultural Differences Environmental Degradation Trade Deficit Global inequality: growth and poverty Protectionism

16 What does trade/globalization mean to me?

17 What it means to me…

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19 Lilburn, Georgia Population 11,307…

20 International Businesses in Lilburn, Georgia CompanyNationProducts Binswanger Glass CompanyMexicoglass and glazing work Bull HN Information Systems, Inc.Francecomputer hardware/software Ecotech Machinery, Inc.Chinagrinding machines Ferguson Enterprises, Inc.United Kingdom plumbing & heating equipment Hailun DistributionChinapianos Shaw-Almex USA, Inc.Canadarubber vulcanizing T & R Enterprise USA, Inc.Taiwanvinyl and rigid film Thomas Concrete of Georgia, Inc.Swedenready-mixed concrete

21 What it means to me…

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23 A Global Transition In the last 20 years we have seen a major transformation of global economies and wealth. Numerous countries around the world have embraced free market principles.

24 Moscow, Soviet Union 1988

25 Moscow, Russia 2008

26 Old China

27 New China

28 Beijing, Los Angeles, Moscow 2009

29 Georgia Council on Economic Education w w w. g c e e. o r g What is Globalization? no commonly accepted definition means different things to different people a complex phenomenon which includes a variety of topics and issues

30 Georgia Council on Economic Education w w w. g c e e. o r g Globalization defined “a process of interaction and integration among people, companies and governments of different nations, a process driven by international trade and investments and aided by information technology. This process has effects on the environment, on culture, on political systems, on economic developments and prosperity and on human physical well-being in societies around the world.” Globalization101.org

31 Georgia Council on Economic Education w w w. g c e e. o r g Globalization defined “…the worldwide phenomenon of technological, economic, and cultural change as brought about by expanding facilities for intercommunication and interdependency between traditionally isolated cultures. The term refers to the overall integration, and resulting increase in interdependence, among global actors, be they political, economic, or otherwise.”

32 Georgia Council on Economic Education w w w. g c e e. o r g Globalization defined “Globalization refers to increases in the degree of integration between national economies. Integration encompasses all of the ways national economies are connected in international markets, including trade in goods, services and ideas; international movements of the factors of production; and coordination of public policies.” Focus: Globalization, NCEE, 2006.

33 Georgia Council on Economic Education w w w. g c e e. o r g What is Globalization? THEN World trade has existed for centuries. NOW “Globalization is farther, faster, cheaper, and deeper.” - Thomas Friedman


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