(Read the definition of Globalization)
- Interconnected- This means that countries are linked through trade, investment, financial markets, and supply chains.
For example, si product A ay maaring magcontain ng components from several other countries, na nagpapakita ng
global economic relationships.
- Interdependent- Interdependence in economic globalization refers to the mutual reliance of countries and entities on
each other. Kase walang bansa na kayang mag produce ng lahat ng pangangailangan nito, kaya nag rerely sila sa pag
imports from other countries para mapunan ang mga pangangailangan nila.
Economic Globalization is the spread of TRADE, TRANSPORTATION and COMMUNICATION systems on a global
scale in the interest in promoting International Commerce (read definition}.
When talking about economic globalization, there are two different types of economies you should know about;
1. Protectionism- is protecting one's economy from foreign competition by creating Trade Barriers
(read diff. of trade barriers)
2. Trade Liberalization- is the act of reducing Trade Barriers to make international trade easier between
countries.
Since the world that we live in is Globalized, the majority of the countries tend to side more with Trade
Liberalization than Protectionism.
There are various ways a country can make trade easier with other countries.
FREE TRADE - which is the trading of goods or services between two or more countries without tariffs or taxes ay isa
sa madaming paraan ng isang bansa to make trading easier.
On March 11, 2014 Canadian Prime Minister Stephen Harper and the South Korean President Park Geun-hye ay
nagpermahan patungkol sa Canada Korea Free Trade Agreement, which made Canada removed 98.7% of its Tariffs on
imported goods from Korea like Kia and Hyundai cars while Korea are removing 98.2% of tariffs from imported Canadian
goods like beef.
TRADE BLOC – which is an agreement made between governments to reduce or eliminate trade barriers.
Canada, United States, and Mexico are part of the North American Free Trade Agreement (NAFTA) which makes them a
trade bloc because of the goods and services that can easily be exchanged to and from each country’s borders.
NAFTA was first created in 1989 with only Canada and the States as trading partners but on January 1, 1994, Mexico
joined, creating the official NAFTA.
Since NAFTA is a FREE TRADE agreement and also a TRADE BLOC it eliminates TRADE BARRIERS between the North
American countries to increase investment opportunities and establishes procedures to reduce trade disputes.
The creation of NAFTA has caused manufacturing jobs from “developed” nations like Canada or the United States to
transfer “developing” nations like Mexico in order to reduce the cost of products because “developing” nations have
less government regulations and cheaper labor.
This is what we called; OUTSOURSING to give you an example
- The United States Outsourced approximately 791,000 jobs to Mexico in 2010 and it was quite easy to transfer to all
these jobs because of the Free Trade Agreements and Trade Blocs.
