Today’s World Section 1

Today’s World Section 1

Preview

• Starting Points Map: World Per Capita GDP

• Main Idea / Reading Focus

• Economic Interdependence

• Global Trade

• Quick Facts: Major Trade Organizations and Agreements

• Cultural Exchange

Trade and Globalization

Today’s World Section 1

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Today’s World Section 1

Reading Focus

• How does economic interdependence affect countries around the world?

• What are some patterns and effects of global trade?

• How does globalization lead to cultural exchange?

Main Idea

Trade and culture link economies and lives around the world.

Trade and Globalization

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At the beginning of the twenty-first century, the world was divided over a number of political, cultural, and economic issues.

• Despite divisions, countries tied together like never before

• Globalization is force behind closer relationships

– Process in which trade, culture link countries

– Improvements in transportation, communication make global trade easier

Globalization

• Major effect of global trade, increased economic interdependence

– Relationship among countries in which they depend on each other for resources, goods, services

– Occurs because countries vary in goods, services they provide, need

Interdependence

Economic Interdependence

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Economy

• Goods, services nation provides and needs depend on level of economic development in that country

• Countries grouped in two categories: developed, developing

Developing

• Less productive economies, lower standard of living; Guatemala, Philippines

• People in these countries lack adequate education, health care

• Poorest, least-developed countries located mostly in Africa, southern Asia

Developed

• Industrialized nations have strong economies, high standards of living

• 20 percent of world’s nations wealthy, powerful like Japan, United States

• Have access to good health care, education, technology

Developed and Developing Countries

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Growth and Outsourcing

Multinational Corporations • Increasing interdependence and dramatic growth of multinational

corporations—large companies operating in multiple countries

• Benefits to companies

– Outsourcing—having work done elsewhere to cut costs, increase production

– Manufacturing facilities in developing countries, where materials, labor relatively inexpensive

• Outsourcing

– Advocates say: creates jobs and wealth in developing countries

– Critics say: fails to improve standard of living, outsourcing causes job loss in company’s home country

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Oil Prices

• All countries depend on oil for energy; rise in prices felt around world

• Developed countries like United States faced with higher costs

• Poor nations in Africa could not afford to import, faced shortages

• Rise in oil prices led to increased demand for alternative energy sources, attempts to reduce consumption

Global Economic Ties

• Certain events, actions can affect economies of many nations

• Global interdependence particularly evident in times of uncertainty

– Early 2000s, price of crude oil rose dramatically

– Factors: rising world demand, concern over available supply

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Summarize

How does economic interdependence affect the world?

Answer(s): helps to provide jobs in developing countries, increases production and decreases cost for multinational companies

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Globalization often leads to or promotes free trade, the exchange of goods among nations without trade barriers such as tariffs. This can lead to consumers purchasing higher-quality goods at lower prices.

• Many of these groups work to promote, regulate free trade

• 1948, General Agreement on Tariffs and Trade (GATT)

• Worked to limit trade barriers, settle disputes

International Trade Organizations

• 1995, GATT replaced by World Trade Organization (WTO)

• Monitors national trade policies

• Organization of Petroleum Exporting Countries (OPEC) works to control oil production, price

GATT, WTO, OPEC

• Regional trade blocs promote free trade, deal with economic issues of neighboring nations

• European Union (EU), North American Free Trade Agreement (NAFTA), others

Regional Trade

Global Trade

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• Opponents argue process benefits wealthy developed nations at expense of developing nations

• Free trade encourages practices that exploit workers, destroy environment

• Some promote fair trade, like fair trade coffee movement guaranteeing fair prices to coffee bean farmers

Anti-Globalization

• Global trade has clear benefits

• Developing countries can provide new, valuable markets for goods, services produced by developed countries

• Technology, services, money from developed nations can improve public services, raise standard of living of developing countries

Benefits

Effects of Global Trade

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Find the Main Idea

How does global trade affect the world?

Answer(s): can provide opportunities for developing countries; opponents believe global trade exploits developing nations, supporters believe it provides for the production and sale of high-quality, low cost goods

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Culture

• Globalization; countries linked through trade and culture

• Modern transportation, communication allow faster exchanges of ideas, customs

Spread of Traits

• Globalization leads to cultural diffusion, spread of culture traits from one region to another

• Work, travel, permanent moves all play part

Popular Culture

• Globalization leads to changes in popular culture

• Culture traits: food, sports, music common within group of people

Mass Media

• Television, movies, music most powerful methods of cultural diffusion

• Satellite news and Internet also ways of exchanging images, ideas

Cultural Exchange

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Negative Effects• Some believe changes largely negative

• Mass media, advertising encourage growth of consumerism, preoccupation with buying consumer goods

World Community• Globalization linking people together through economics, culture

• Challenge to preserve valuable traditional cultures while providing enrichment from other places in world

Media• Opponents say market shaped by media and advertising, not actual needs

• Worry that globalization creating common world culture, allowing traditional cultures to lose uniqueness

Effects of Cultural Changes

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Summarize

How is cultural exchange a part of globalization?

Answer(s): leads to cultural diffusion, more travel to other countries for work or vacation, exotic goods from other countries available