1. Globalization and BGS Relationships
Part 5
Chapter Thirteen
Globalization and BGS Relationships

2. Chapter Thirteen Learning Objectives
Define Globalization
Examine the phenomenon of Globalization, the Pros and Cons
Learn how US Corporations adopted to Globalizations competitive threats
Familiarize ourselves with major global trade agreements
Examine current trends in the world economy
Understand what it takes to have a capitalism that works

3. Globalization: a definition
“Globalization is the expansion and intensification of linkages and flows – of people, goods, ideas and cultures – across national borders.”
Bosworth and Gordon
Brookings Review

4. Globalization: Pro and Con
PRO: Creates enormous riches and wealth and higher standards of living for millions of people.
CON: “The essence of globalization is a subordination of human rights, of labor rights, consumer rights, environmental rights, democracy rights, to the imperatives of global trade and investment.”
Ralph Nader

5. U.S. Corporate Response to Competitive Threats
Partnerships with suppliers
Coordination of functional departments
Outsourcing
Increasing foreign direct investments
Improving productivity
Forming combinations with other companies
Mergers and acquisitions
Alliances
Consortiums
Expanding regional trade agreements

6. Major Global Trade Agreements
European Union
NAFTA
MERCOSUR
APEC

7. European Economic and Monetary Union Members
AUSTRIA
BELGIUM
DENMARK*
FINLAND
FRANCE
GERMANY
GREECE
IRELAND
ITALY
LUXEMBOURG
NETHERLANDS
PORTUGAL
SPAIN
SWEDEN*
UNITED KINGDOM*
* Not a MONETARY UNION member. GREECE joined the EMU effective January 1, 2001.

8. North American Free Trade Agreement Members
CANADA
MEXICO
UNITED STATES

9. ARGENTINA BRAZIL PARAGUAY URUGUAY
MERCOSUR Members
ARGENTINA BRAZIL PARAGUAY
URUGUAY
GDP in excess of $1 TRILLION
(half of all Latin America)

10. Asia-Pacific Economic Cooperation Members
AUSTRALIA BRUNEI DARUSSALAM CANADA CHILE PEOPLE’S REPUBLIC OF CHINA HONG KONG, CHINA INDONESIA JAPAN KOREA MALAYSIA
MEXICO NEW ZEALAND PAPUA NEW GUINEA PERU PHILIPPINES RUSSIA SINGAPORE CHINESE TAPEI THAILAND UNITED STATES VIETNAM

11. Current Trends in the World Economy
Expanding globalization
Increasing global competition
Expanding global trade agreements
Financial instability
Spread of capitalism
Erosion of nation-state sovereignty
Erosion of cultures

12. Capitalism That Works Must Have Certain Fundamental Structural Arrangements in Place:
Trustworthy financial system
Bankruptcy courts
Antitrust laws
A minimum social security net
Limited government regulation
An efficient tax system
An acceptance of the idea of private property
A legal system that protects private property
An assumption of private enterprise responsibilities to workers and communities