CHALLENGES AND OPPORTUNITITES OF ECONOMIC GLOBALIZATION  INTERNATIONAL TRADING BLOCS  REGULATING INTERNATIONAL TRADE  DEREGUALTION, PRIVATIZATION AND FOREIGN INVESTMENT IN CANADA

INTERNATIONAL TRADING BLOCS  In many South American countries, the richest 20% of the population owns more than 60% of the wealth  The poorest 20% of the population owns less than 5% of the wealth  MERCOSUR is the common market of the South  It includes Paraguay, Argentina, Uruguay, Brazil  Chile Bolivia, Columbia, Peru, Ecuador, and Venezuela are associate members  The main objective is to improve the economies in the member countries by opening markets, promoting economic development, conserving the environment 

INTERNATIONAL TRADING BLOCS  A second South American based group, is Comunidad Andina de Naciones (CAN)  This organization created in 1969 has a combined population of 90 million  In 1999, the of groups began to consider a merger  The new organization is called Comunidad Sudamericana de Nacions (CSN), and its plans to eliminate all tariffs between members by 2019  It is hard because Bolivian President Evo Morales nationalized 53 foreign natural gas installations

THE EUROPEAN UNION  The European Union is an organization of 25 countries which combine to form the largest and most powerful common market in the world at over 450,000, 000  Among the items they share in common  Flag  Currency  Anthem  founding date  The European Parliament and Council of Europe Union share responsibility for passing laws and making policy decisions  Elections are held every five years 

THE EUROPEAN UNION

 More than 50% of each countries trade occurs with the EU, some countries have over 80% of their trade with the organization ( graph page 253)  On the global stage the EU accounts for over 20% of world imports and exports, despite making up only 7% of the world’s population  The Euro began its circulation in 2002, 12 countries share the currency

THE ROLE OF THE WORLD BANK  The World Bank is actually two separate institutions, the International Bank for reconstruction and Development (IBRD) and the International Development Association (IDA)  The IDA helps the world’s poorest countries  In the past 20 years the World Bank says it has accomplished  poverty levels dropping in the poorest countries from 40% to 21%  Life expectancy in developing countries increasing by20 years  Infant mortality prior to age five cut by 50%  Adult illiteracy halved to 25%

THE ROLE OF THE WORLD BANK  Criticisms of the World Bank  Ideology that free market can bring prosperity to all  Falls under the influence or more developed countries like United States  Inability to cause changes to countries with poor human rights records  In its own evaluation in 2006 the $38 billion the World Bank had spent financing free trade since 1986 has opened markets but has not been as effective in increasing exports and reducing poverty  In less developed countries free markets can cause inflation and high interest rates  Heavily Indebted Poor Countries (HIPC) owe debts to developed countries that they have little or no chance of repaying

THE ROLE OF THE WORLD BANK  In 1996, the HIPC Debt initiative was launched  HIPCs must agree to reforms in order to be eligible for debt relief  HIPCs have to show they have followed these reforms for three years to be eligible for the program  In 2000, Canada announced it would halt debt repayments from 11 of the poorest countries in Africa and Latin America  By 2004, Canada had contributed over $312 million to the HPIC debt initiative 

THE ROLE OF THE INTERNATIONAL MONETARY FUND  The IMF works to foster global monetary co- operation, secure financial stability, facilitate international trade, promote high employment, sustain economic growth and reduce poverty  Uses three methods to achieve these goals  Surveillance: assesses each countries economic situation and publishes the findings twice a year  Technical assistance and training usually offered free of charge, in areas of banking supervision and regulation  Financial assistance offers funds and loans to countries to address debt problems and to reduce poverty

THE ROLE OF THE INTERNATIONAL MONETARY FUND  Criticisms of IMF  Lends money to military dictatorships friendly to American and European corporations  Austerity programs cause countries to increase taxes and reduce social programs  Does not actively promote democracy, human rights, and labour rights  Is controlled by developed countries particularly USA  Since 1980, more than 100 countries have experienced a banking collapse more than at any point in history

IMPACTS OF ECONOMIC GLOBALIZATION ON CANADA  Trade liberalization is the process of reducing barriers to trade  Crown Corporations have been privatized, foreign investment has been encouraged and jobs have been outsourced  Deregulation involves opening an industry to more competition  One example of this is privatization  This has taken place at both the federal and provincial levels

IMPACTS OF ECONOMIC GLOBALIZATION ON CANADA  In 1973, the Foreign Investment Review Agency was developed due to concerns over foreign ownership in oil and gas, mining, manufacturing  Its initial purpose was to screen foreign takeovers, it was hoped that it would stop further American control in the Canadian economy  The program which was started by the Liberals was ended by the Conservatives in 1984  Today like many other countries Canada actively recruits foreign investment

IMPACTS OF ECONOMIC GLOBALIZATION ON CANADA  Foreign investment in Canada climbed from $182 billion in 1996 to over $415 billion in 2005

IMPACTS OF ECONOMIC GLOBALIZATION ON CANADA

 Outsourcing remains a major concern  It can occur when a company hires another company to fulfill certain tasks in production   Related is off shoring, where these tasks are done in foreign markets to take advantage lower labour costs or environmental standards  It is most common in communications and high techs fields  In 2006 an OECD study determined that one in five jobs could be affected by continuing growth of offshore outsourcing

IMPACTS OF ECONOMIC GLOBALIZATION ON CANADA  The following industries were identified as vulnerable to outsourcing:  Information technology  Accounting  Consulting  Financial services  Research and development  the study also told us that automation is a factor in decline of some of these industries  L44AF0E52B39D5B95 L44AF0E52B39D5B95 L44AF0E52B39D5B95