The Globalization of Industry

Global Industrial Regions - Europe

Global Industrial Regions – N America

Global Industrial Regions – East Asia

Industrial Shifts More recently, manufacturers have been lured by right-to-work laws- legislation that requires a factory to prohibit workers from being forced to join a union. Essentially, industry in the U.S. over time has shifted from the Northeast toward the South and West.

Emerging Industrial Regions Some manufacturers are locating in places where prevailing wage rates are lower than in traditional industrial regions. Transnational corporations have embraced using low-cost labor in developing countries. New international division of labor refers to selective transfer of production operations requiring highly skilled workers to factories located in developed countries and those requiring little skill to factories located in developing countries.

Strengths of NIC NICs are countries whose economies have not yet reached developed country status but have, in a macroeconomic sense, outpaced their developing counterparts. NICs usually share some other common features, including: Strong political leaders. A switch from agricultural to industrial economies, especially in the manufacturing sector. Rapid growth of urban centers and expanding middle class. Low environmental regulations Exploitation of less developed countries Low worker regulations Tax incentives

Free Trade Agreements An FTA involves cooperation between at least two countries to reduce trade barriers—import quotas and tariffs— and to increase trade of goods and services with each other. If people are also free to move between the countries, in addition to FTA, it would also be considered an open border. The World Trade Organization(WTO) is an intergovernmental organization which regulates international trade. The WTO deals with regulation of trade between participating countries by providing a framework for negotiating trade agreements. (Some FTA… Some not)

NAFTA On January 1, 1994 the North American Free Trade Agreement took effect. Under the NAFTA, Many tariffs were eliminated between the U.S., Canada, and Mexico Essentially created a free-trade zone. NAFTA was meant to stimulate the economy by encouraging increased free trade NAFTA has had both positive and negative effects Many point to the poor working conditions in factories on the U.S./Mexico border and the loss of jobs in the U.S. as consequences Others point to the jobs created as a result of increased free trade and increased agricultural production in the U.S. as benefits

Maquiladoras Mexico attracts labor-intensive industries because of its relatively low-cost labor and its proximity to the U.S. Plants in Mexico near the U.S. border are known as maquiladoras. a manufacturing operation in an FTZ, where factories import material and equipment on a duty-free and tariff-free basis for assembly, processing, or manufacturing and then export the assembled, processed and/or manufactured products, sometimes back to the raw materials' country of origin.

Pros and Cons of NAFTA Economic Social Political Environmental Pro Con

Globalization of Industry Creates Deindustrialized Regions Process by which companies move industrial jobs to other regions with cheaper labor, leaving the newly deindustrialized region to switch to a service economy and to work through a period of high unemployment The decline of primary and secondary industry, accompanied by a rise of the service sectors of the industrial economy.

The Attraction of Traditional Regions – Made in America Two location factors influence industries to remain in traditional industrial regions: Availability of Skilled Labor Asset found principally in traditional industrial regions. Rapid Delivery to Market Proximity to market has become more important since the advent of just-in-time delivery- the delivery method where parts and materials arrive at a factory moments before they are needed.