1. Trade Agreements & Organizations
Globalization
Trade Agreements
&
Organizations

2. Yesterday’s learning goals…
Rationalization
Competitive Advantage
Absolute Advantage
Opportunity Cost
Comparitive Advantage

3. Our learning goals for today…
Globalization
Trade Agreements
Trade Organizations

4. Over the past century, the power, size, and reach of corporations have grown enormously.

5. These companies conduct business on an international scale.
Globalization is the process whereby national economies and cultures have become integrated.

6. Global integration through..
New global communication technologies
foreign investment
international trade
migration
new forms of transportation
the flow of money

7. Globalization
Is the movement of goods, services, technology, investment, ideas, and people throughout the world.

8. Advantages Outsourcing Lower prices Improved human rights
Increased productivity
Innovation
Better jobs
Increased capital flow

9. Disadvantages Lost Canadian Jobs Loss of Canadian productivity
Exploitation of cheap labour
Increased pollution
Unhealthy products
Spread of disease
Increase in the income gap
Influence of MNC on governments.

10. Globalization: Trade Agreements
Trade agreements are written ‘agreements’ between nations establishing terms of trade, eliminating trade barriers, and encouraging foreign investment.

11. Trade Agreements
NAFTA
European Union

12. NAFTA North American Free Trade Agreement
Sets rules surrounding the movement of goods, services, and investments across North America.
Which countries does that include?

13. Advantages of NAFTA Eliminates tariffs and other trade barriers.
Protects copyright and patents.
Promotes competition between participating countries.
Access to raw materials, talent, technology across all of North America, not just in their own country.
Since NAFTA’s inception, trade has triple between the three partnerst.
(Approx. $300 billion to over $900 billion)

14. Disadvantages of Nafta
Labour costs are lower in Mexico, so a lot of manufacturing jobs have moved to Mexico.
With tariffs on corn and soya beans being lifted, it is too hard for Mexican farmers to compete with the U.S.

15. Tariff: $2 ?? Price of Corn in Mexico: $5
Price of Corn imported from U.S.A.: $4

16. European Union
Imagine arranging a shipment of goods from Windsor to Montreal.
Take the 401; No big deal.

17. How about travelling the same distance in Europe?
You travel through Hungary, Slovakia, Czech Republic, Germany, and the Netherlands.
Four Border Crossings! (duties & tariffs at each!)
Five different languages!
Five sets of transportation documents!
Five different currencies!

18. European Union
The formation of the European Union has removed most of these obstacles!!

20. European Union Countries
There are 27 member states of the European Union.
It is a trade agreement including almost half a billion people.
It has its own flag

21. Purpose
The purpose of the EU is promote economic growth, peace, government co-operation, and ensure that its population can prosper.

22. The Euro
One of the major accomplishments of the EU is its implementation of a common currency – the Euro.

23. Canada & The European Union
The EU is Canada’s second largest export trading partner after the U.S.
Lately, in the news, the European Union was voting on whether or not to accept oil from Canada’s oil sands. (They were voting on whether it was too ‘dirty’ a supply of oil or not.)

24. Trade Organizations Agreements are treaties between nations.
Trade Organizations are groups of nations helping to liberalize trade (make it easier).

25. WTO World Trade Organization 153 countries negotiates trade agreements
has a set of rules
settles disputes
is extremely important for Canada as we have a relatively small economy and without it, our voice on the international stage could be lost.

26. APEC Asia Pacific Co-operation 21 member countries
54% of the world’s GDP
Decreases tariffs and trade barriers between countries in the APEC.

27. OPEC
Organization of Petroleum Exporting Countries (1960)

28. G8
‘Group of Eight’
France, U.S., Britain, Italy, Germany, Japan, EU, Canada, and Russia
The major economies of the world.

29. G20
Group of Twenty
Reflects the changing times and influence of other countries.
Includes Brazil, India, China
These 20 countries encompass 90% of the world’s economic activity.

30. World Bank 186 member countries
provides monetary and technical support for developing countries
provides loans and grants to poor countries to assist with education, health, farming, the environment, and other economic concerns
There are criticisms as well:
They put stipulations on loans, change economies, and pressure governments and producers.

31. International Monetary Fund
186 countries
promotes financial stability
lends money
provides expertise to governments
warns governments of potential financial problems.

32. Activity
Create a world map (with a legend) that shows the countries in:
The EU G8
G20
* Some countries will be in all three, so you will need a legend showing: EU
EU & G8
EU & G20
EU & G8 & G20
Also, label each country with its two digit country code.
eg. Canada = CA

33. Review Trade Balance The WTO Corporations Codes of Ethics CSR SRI
Our test (open book & open computer) will cover:
Trade Balance
The WTO
Corporations
Codes of Ethics
CSR
SRI
Ethical Imperialism & Cultural Relativism
Stocks and ROI
NGOs and Micro Credit
Capitalism, Communism, & the Mixed Economy
Rationalization, Competitive/Absolute/Comparitive Advantage