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Globalization: Costs & Benefits Essential Questions: Who gains from trade? How do forces of globalization affect international trade? Slide 2 Key Terms Define these Unit 4 Key Terms Developed country Developing country Least-developed country (LDC) Add this term to the Unit 4 Key Terms Globalization Globalization -the growing integration of economies, cultures, and societies worldwide. Slide 3 Warm-Up What is one befit of global trade? What is one negative effect/downside? Crash Course-Globalization Video #1 Crash Course-Globalization Video #1 Slide 4 BENEFITS of Global Trade & Globalization Increased variety, lower priced and higher quality goods/services. Poverty is reduced--poorer countries become less poor than otherwise. Globalization leads to a sharing of ideas, goods and services, technology, culture, etc. and benefits all areas of life. International cooperationex. agreements to combat global warming, human/animal rights violations, etc. Slide 5 TRADE & INTERNATIONAL ORGANIZATIONS Slide 6 World Trade Organization (WTO) Approximately 140 countries are member states. Draws up and enforces international trade agreements between member states. Intended to protect workers through collective power and effective trade deals. Example: If a country places a tariff against another country or on a particular good, the WTO may issue trade sanctions against the violating country. The WTO will also work to resolve the conflict through negotiations. Slide 7 WTO- Criticism The organization works to benefit wealthy nations and large corporations at the expense of poorer countries. The WTOs policies endanger workers rights and the environment. Prevents upward mobility of developing countries and LDCs. Slide 8 United Nations (UN) Approximately 192 countries are member states. Analyzes economic issues and provides aid to poor. Intended to protect LDC through collective power and protective measures such as sanctions or resolutions. Example: The Arms Trade Treaty (ATT), regulating the international trade in conventional weapons -from small arms to battle tanks, combat aircraft and warships. Slide 9 UN- Criticism The organization is so large it is paralyzed by debate and ineffective to act or act decisively. Some of the UNs policies violate national sovereignty or interfere with free market trade. Some of their economic sanctions dont workharm the innocent. Slide 10 World Bank Lends money to developing and LDC countries. Intended to help fund infrastructure building and improvement. Example: The World Bank loaned Pakistan $350 million to help fund the Evergreen Hydroelectric Project, bringing electricity to a large part of the country without reliable sources. Slide 11 World Bank- Criticism The projects funded benefit large business interest and/or corrupt government officials. Some of the projects, such as those in the Amazon Rain Forest or Asian river basins are harmful to the environment. Slide 12 International Monetary Fund (IMF) Offers economic advice and low-interest loans to struggling countries, especially countries with high foreign debt. These loans have very strict conditions attached, such as budget cuts, etc. (like a credit counselor). Example: Following economic downturn in Greece in the 200s, the IMF has given the country loans to help stabilize their economy. A condition for the loan was to cut some social programs such as pensions for higher-income retired government retirees. Slide 13 IMF- Criticism The conditions of the loans violate sovereignty and are often harmful. Cutting of spending for social programs usually harms the poorest of a countrys poor. Traps poorer countries into a cycle of debt instead of debt forgiveness. Slide 14 COSTS of Global Trade & Globalization Slower growth in LDC economies than others. Exploitation of poorer countries resources. Human rights violations and government corruption. Comparative advantages make it difficult for LDCs to ever improve. Damage to the environment. Cultural loss/dilution. Crash Course-Globalization Video #2 (time saver6:08-8:41 & 11:40- 11:27) Crash Course-Globalization Video #2 Slide 15 Exit Ticket Read the Critic statement on your exit ticket. Examine the image to the right. Using the information you learned in class, complete the Proponent statement at the bottom. The Philippines