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The document discusses globalization and the emergence of global institutions. It defines globalization as the integration of world markets and the globalization of production. It also describes six major global institutions that help regulate and manage the global marketplace: the General Agreement on Tariffs and Trade, World Trade Organization, International Monetary Fund, World Bank, United Nations, and Group of Twenty.

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Trisha Aniversario
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77 views14 pages

Ibat 1

The document discusses globalization and the emergence of global institutions. It defines globalization as the integration of world markets and the globalization of production. It also describes six major global institutions that help regulate and manage the global marketplace: the General Agreement on Tariffs and Trade, World Trade Organization, International Monetary Fund, World Bank, United Nations, and Group of Twenty.

Uploaded by

Trisha Aniversario
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Because learning changes everything.

Globalization
Chapter 1

© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
Learning Objectives

• Understand what is meant by the term globalization.


• Recognize the 2 types of Globalization.
• Describe and explain the 6 Emergence of Global
Institutions

© McGraw Hill, LLC 2


What Is Globalization?
- refers to the shift toward a more integrated and
interdependent world economy.

2 Types of Globalization
- Globalization of market
- Globalization of product

© McGraw Hill, LLC 3


What Is Globalization? 1

The Globalization of Markets


The merging of historically distinct and separate national
markets into one huge global marketplace.
• Falling barriers to cross-border trade and investment.
• Global tastes.
• Benefits small and large companies.
• Significant differences between national markets.
• Products that serve universal needs are global, such as oil.
• Competitors may not change among nations.

© McGraw Hill, LLC 4


What Is Globalization? 2

The Globalization of Production


Sourcing goods to take advantage of differences in cost and
quality of factors of production.
• Factors of production include labor, energy, land, capital.

Early outsourcing was confined to manufacturing.


• Modern communications technology has advanced
outsourcing today for service activities.

© McGraw Hill, LLC 5


What Is Globalization? 3

The Globalization of Production continued


Robert Reich suggests “global products.”
Impediments prevent optimal dispersion of activities:
• Formal and informal barriers to trade.
• Barriers to foreign direct investment.
• Transportation costs.
• Political and economic risk.
• Challenge of coordinating globally dispersed supply chain.

© McGraw Hill, LLC 6


The Emergence of Global Institutions 1

Institutions needed to help manage, regulate, and police


global marketplace.
• General Agreement on Tariffs and Trade (GATT).
• World Trade Organization (WTO).
• International Monetary Fund (IMF).
• World Bank.
• United Nations (UN).
• G20

© McGraw Hill, LLC 7


The Emergence of Global Institutions 1

• General Agreement on Tariffs and Trade (GATT).


• The General Agreement on Tariffs and Trade (GATT), signed on
October 30, 1947, by 23 countries, was a legal
agreement minimizing barriers to international trade by
eliminating or reducing quotas, tariffs, and subsidies while
preserving significant regulations

© McGraw Hill, LLC 8


The Emergence of Global Institutions 2

World Trade Organization (WTO)


• Polices the world trading system.
• Ensures nation-states adhere to the rules.
• Facilitates multinational agreements among members.
• As of 2021,164 nations that account for 98 percent of
world trade were WTO members.

© McGraw Hill, LLC 9


The Emergence of Global Institutions 3

International Monetary Fund (IMF)


• Established to maintain order in the international monetary
system.
• Often seen as the lender of last resort.
• In return for loans, requires nation-states to adopt specific
economic policies aimed at returning their economies to
stability and growth.
• Total of 190 members as of 2020.

© McGraw Hill, LLC 10


The Emergence of Global Institutions 4

World Bank
• Promotes economic development.
• Focused on making low-interest loans to cash-strapped
governments in poor nations that wish to undertake
significant infrastructure investments.
• With 189 member countries.

© McGraw Hill, LLC 11


The Emergence of Global Institutions 5

United Nations (UN)


Promotes peace through international cooperation and
collective security.
193 member countries.
UN Charter has four basic purposes:
• Maintain international peace and security.
• Develop friendly relations among nations.
• Cooperate in solving international problems and in
promoting respect for human rights.
• Be a center for harmonizing the actions of nations.

© McGraw Hill, LLC 12


The Emergence of Global Institutions 6

Group of Twenty (G20)


• Comprises finance ministers and central bank governors of
the 19 largest economies in the world, plus representatives
from the European Union and the European Central Bank.
• Represents 90 percent of global GDP and 80 percent of
international global trade.

© McGraw Hill, LLC 13


© McGraw Hill, LLC 14

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