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merits and demerits of globalisation.
the pros and cons of globalization
merits and demerits of Globalisation
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I. INTRODUCTION
The fast pace of globalization is creating serious issues and questions for many developing countries to deal with, such as should they join a free trade bloc or not? What will they gain by being a member and what will they lose?
Since the creation of the European Union, first formed by 15 Western European countries and most recently expanded to 10 additional European nations, have influenced many countries around the world to follow the European example and worked together in order to expand their marketplace and increase economical and political power. NAFTA, Mercosul, CAFTA, CARICOM, and CAN are good examples of such economic blocs. The North America Free Trade Agreement (NAFTA) is formed by United States, Canada, and Mexico. Argentina, Paraguay, Uruguay, and Brazil form Mercosul, the South America Common Market. The Central American Free Trade Agreement (CAFTA) is formed by El Salvador, Honduras, Nicaragua, Guatemala, Panama, and Costa Rica. The Caribbean Community (CARICOM) is formed by the 20 Caribbean nations. Finally the Andean Community (CAN) formed by Bolivia, Colombia, Ecuador, Venezuela, and Peru.
The latest of these economic blocs is the proposed implementation of the FTAA by December 31, 2005, which will be the world’s largest economic bloc. The FTAA is planned to include all 34 countries on the North and South America continents, except for Cuba. In contrast to the European Union, in which the majority of its initial member countries had highly developed economies with the exception two or three countries, the majority of the FTAA country members are third world countries except for the United States and Canada. The main problem behind the FTAA is how secretively and quickly the whole process is being developed and scheduled to be implemented. It took a couple of decades for the European Union to become a reality. The FTAA timetable is supposed to be implemented in less than 10 years.
The implementation of the FTAA will have some benefits to those small economies in South American, Central America, and Caribbean nations, which are desperate to reach the NAFTA market. However, to countries like Brazil, which have a larger industrial park and compete directly with U.S., Canada, and Mexico, the implementation can cause serious problems to its country economy.
BACKGROUND
Globalization
Transnational Corpo...
... middle of paper ...
...t, the only economical sector in Brazil and Argentina that can compete with the United States and Canada is the agricultural sector. However, the United States and Canada have already stated that they would not agree to stop their heavy subsidies of their agriculture sectors. Therefore, with nothing else to compete equally with the developed nations of the north, Brazil and Argentina best option is to stay out of the proposed FTAA plan.
References
Multinational Monitor, (Dec 2003). Retrieved June 20th, 2004 from InfoTrac database
Brazil’s Central Bank, (2004). Retrieved June 19, 2004 from the World Wide Web: http://www.bcb.gov.br/
FTAA. Retrieved June 20, 2004 from the World Wide Web: http://www.corpwatch.org/
Methanx (2004). Retrieved June 27, 2004 from the World Wide Web: http://www.globalexchange.org
Free Trade Area of the Americas, Retrieved June 20, 2004 from the World Wide Web: http://ftaa.org/
Free Trade Area of the Americas Summit, Retrieved June 20, 2004 from the World Wide Web: http://stoptheftaa.org/ftaa
Sindicato Mercosul. Mercosul: General Information. Retrieved June 20, 2004 from the World Wide Web: http://www.sindicato.org.br/mercosul/
The goal of North American Free Trade agreement was to eliminate barriers of trade and investment between the United States, Canada, and Mexico. The implementation of the agreement brought the immediate removal of tariffs on more than one-half of U.S. imports from Mexico and more than one-third of U.S. exports to Mexico. Within ten years of the implementation of the NAFTA agreement, all United States and Mexico tariffs would be gone. The only tariffs that would remain would be those that deal with U.S. agricultural exports to Mexico. However, these were to be slowly phased out within fifteen years of the initial implementation of the program. NAFTA also seeks to eliminate all non-tariff trade barriers.
After three years of debate NAFTA was established in 1994. Fears concerning NAFTA included job creation, loss and transfer, wages and infrastructure. (Ganster/Lorey 188-189) However, with the implementation of NAFTA the economy grew. Ganster and Lorey reveal that bilateral trade increased by $211.4 per year from 1989 to 2004. Commerce grew by 20 percent in the first six months of 1994. There were advantages and disadvantages of NAFTA, nevertheless, NAFTA “intensified the integration of the two economies rather than distancing them.” (Ganster/Lorey 190)
The North American Free Trade Agreement (NAFTA) is an agreement between America, Canada And Mexico that coincides a triune free trade economic bloc between the three countries. NAFTA was a necessary deal to be made between the North American Nations to compete in the “Economic World Order”. NAFTA was first designed and drafted by American president George Bush senior, Canadian Prime minister Brian Mulroney and Mexican president Carlos Salinas on December the 12th 1992 in San Antonio Texas. NAFTA’S original creators where not the men that finalized the triune trade bloc but instead NAFTA was redrafted to appease all recipients of the deal and its respectful citizens. NAFTA was finalized and singed on December the 8th 1993 by American president Bill Clinton, Canadian Prime Minister Jean Chretien and Mexican President Carlos Salinas. NAFTA came in to full effect on January the 1st 1994. The history of NAFTA and its negative and Positive effect and the necessity of NAFTA will all be explained in this paper.
The United States free trade agenda includes policies that seek to eliminate all restrictions and quotas on trade. The advantages of free trade can be seen through domestic markets and the growth of the world economy. T...
Over the course of sixty years, the European Union (EU) has evolved to become one of the most economically and politically integrated regions in the world. Compare and contrast the EU with one other major global trading bloc, such as NAFTA or ASEAN, with which you are familiar.
Free trade agreements have proved to be an effective tool for exporters to penetrate foreign markets; the reductions of trade barriers facilitate the exporting process and make it cheaper for producers to export goods and services to trading partners. The US currently has twelve Free Trade Agreements in place with Australia, Bahrain, Chile, DR-CAFTA, Israel, Jordan, Morocco, NAFTA, Oman, Peru, and Singapore, that accounts for 43% of total exports and an annual growth of 11.1% since the year 2000. On the other hand Colombia has nine Free Trade Agreements: Mexico, El Salvador-Guatemala-Honduras, CARCOM, CAN, MERCOSUR, Chile, Canada, Cuba, EFTA.
Since before NAFTA was even created, discussions about trade agreements among North, Central, and South America were on the table. The United States would like to pull them together to form a super trading enterprise call the Free Trade Agreement of the Americas (FTAA). It would fall somewhere between a regular free trade agreement and the European Union. Negotiations are slow, but many remain hopeful that it can be accomplished.
It was also established with the intent to help poor countries, like Mexico, export their products for economic reasons. In my opinion, it has strongly contributed to America's massive downsizing phenomenon. Companies that have experienced financial setbacks and losses seem to relish the idea that they can downsize the workforce here in the states, move operations into places like Mexico, hire cheap labor, and export their product back to the states, while making bigger profits. The sad part about this is that it is true, and NAFTA is largely responsible for this type of downsizing. Is this ethical? That remains to be seen. The truth is that unless an organization was designed expressly for the purpose, it is not in business to provide employment. Jobs are the by-product of successful organizational endeavors, not their intended output. If the decision to downsize is a response to competitive pressures, it will appear impatient or premature to those who must leave. If it is perceived as anything less than a well developed strategic response to demands on the organization, then it fails to show employees need for the criteria. Downsizing c...
In an interview in 1999, Martin Khor, the director of the Third World Network and the author of Malaysian Economy: Structures and Dependence, says that the WTO is an organization dominated by powerful nations, where key decisions are usually made in informal meetings in which only a few rich countries are invited (Khor). Then, agreements are announced that poor countries did not know were being discussed. Many developing countries do not have the capacity to follow the negotiation and participate actively. This seriously disadvantages those countries from representing their interests. President Obama promises developing countries joining the TPP that their voice would be heard frequently. This indeed will help those nations to act in their best interest better than passively following the WTO’s
Lipsey, Richard G.. "Will there be a Canadian-American Free Trade Association? ." The World Economy 9 (2008): 218-238.
First and foremost, the primary purpose of NAFTA is to promote economic growth. From this “money” point of view, free trade is mostly in favor of the U.S. One of the major factors that determines a country's economic strength is GDP. Surprisingly, NAFTA is estimated to boost American GDP by 0.5% a year, approximately $50 billion in 2000 (OSTR). Moreover, in 2003, 10 years after NAFTA was established, United States experienced the most significant economic growth ― 38%, compared to 30% in Canada and 31% in Mexico (USTR). Keep in mind that the U.S. had a larger base of growth. In addition to that, the U.S. has a giant manufacturing industry that consumed huge natural resources. The majority had to come from imports: Canada and Mexico are definitely the best exporters of resources. Almost one-third of U.S.'s imports come from these two NAFTA countries (Workman). The United States, as the largest importer in North ...
Bruner, Christopher M. “Hemispheric Integration and the Politics of Regionalism: The Free Trade Area of the Americas (FTAA).” The University of Miami Inter-American Law Review 33 (2002)
"North American Free Trade Agreement (NAFTA)." Office of the United States Trade Representative. N.p., n.d. Web. 09 Apr. 2014. .
According to different studies, the advantages that are seen in the agreement that has various parameters regarding how these trading activities will be conducted, have promoted an increase in the market size and revenue in different states that participate in the agreement. This means that aspect like the elimination of tariffs between the countries that fall under the trading region has opened new pathways for sustainable economic growth in the region. The effects are visible in all the countries since there are several benefits associated with being part of this trading community. The three markets have been affected by the agreement significantly (Graham, 2016). The American economy has continued to grow since there is an increase in the level of investment in different sectors including the footwear industry. Other markets like the Mexican and Canadian market have seen significant increases in external investment due to the nature of competition arising from different players in the market. This means that all the three markets have grown and continue to grow while offering other advantages like creation of employment and the opening of other franchises as a result of the