LESSON 2

REGULATING GLOBALIZATION

OBJECTIVES

• Review economic systems.• Review key economic terms.• Introduce trade agreements and regulating

bodies.• Identify issues and controversies surrounding

globalization.

WARM UP

• What is economics?• Way in which we manage

resources to meet needs

• What factors drive global economic decision-making?• Scarcity• Supply & Demand• Opportunity Cost• Comparative Advantage

REVIEW ACTIVITY

• Decide as a class how to line yourselves up according to term on card…• You must be able to

connect to each term on your right and left!

REVIEW

• What is globalization?• Growing integration

of the world’s economies and societies.

• When/Why?• How?

GLOBALIZATION: ISSUES AND CONTROVERSIES

• National Sovereignty• Loss of Cultural Identity• Free Trade or Fair Trade

• Globalization & Human Rights• Globalization & Migration

• Emerging Powers• Global Economic Crisis

TRADE AGREEMENTS AND REGULATING BODIES

• Regional Trade• Promote and regulate trade between countries

in specific regions, exception to MFN status

• NAFTA (US, Canada, Mexico)• EU (European Union)• AU (African Union)• ASEAN & SAFTA (SE Asia) • MERCOSUR (S. Amer)• GAFTA (Greater Arab)

TRADE AGREEMENTS AND REGULATING BODIES

• International Trade• Monitor trade practices between

nations and implement fair trading practices

• IMF• World Bank• WTO

ACTIVITY

• Quiz “What’s Up with Trade?”• Answers: • B• D – 2013: 5-7%• D• B• X – 2013: 4m (women) in 5K factories , $19b/yr• C• D• Which was the last nation to become a member?

TRADE AGREEMENTS AND REGULATING BODIES

• International Monetary Fund (IMF)

• 1944, Bretton Woods NH• HQ Washington, DC

• Purpose:• Aid to countries in

economic crisis

• Stabilize internatl financial and currency markets

• Membership• 188 Nations• Donate & vote based on

% of global economy• Christine Lagarde MD

• Functions• Surveillance/Monitoring• Short Term Loans• Technical assistance

TRADE AGREEMENTS AND REGULATING BODIES

• World Bank

• 1944, same as IMF• HQ: Washington, DC

• Purpose:• Financial aid to

developing countries for long-term development

• Membership• 188 Nations• Fee based on %• 24 Executive

Directors

• Functions• Financial loans• Technical assistance

TRADE AGREEMENTS AND REGULATING BODIES

• World Trade Organization (WTO)

• 1995 permanent• HQ Geneva, Switzerland

• Purpose:• Oversee international

trade• Multilateral Trade Talks

(“Rounds” – Doha Dvpt Round since 2001)

• Membership• 159 Nations (24

Applying)• Consensus decisions

• Functions• Oversee GATT (Gen

Agreement on Trade & Tariffs)

• Rules for free/fair trade

• Settle disputes• Settle disputes• Intellectual Property

PRINCIPLES OF THE WTO

• Trade Without Discrimination (MFN)• Regional groups• Developing nations

• Freer Trade• Progressive Liberalization

• Predictability• Transparent• Binding

• Promoting Fair Competition• Protection• Compensation

• Development & Reform• Time & assistance

(market/technical) to developing countries

CLOSURE

• Why are trade groups important to the global economy?

•Help free barriers, dvp/expand economies, maintain flow, set rules

HOMEWORK

• Sesame Street Around the World• The Globalization of Coke OR

McDonaldization

• Rap Topics