Globalization Day 9 Mini Lesson

 Students will identify purpose of G-20.  Students will explain issues surrounding currency wars and trade imbalances.  Students will examine impact of PIGS on Eurozone.  Students will evaluate successes and failures of latest summit.

 Name an international organization that oversees globalization issues.  IMF  World Bank  WTO  G7/G8  G-20

 As you read the article, identify what questions you need answered to understand the recent G-20 summit.  10/11/13/world/asia/13asse ss.html?src=mv 10/11/13/world/asia/13asse ss.html?src=mv  What is the Group of 20?  What is the friction surrounding trade & currencies?  What real issue did these detract from?  Why isn’t Russia in the WTO?  Successes/Failures of Seoul summit?

 Leaders of the world's major developed and developing countries as well as international institutions  Finance ministers of 19 nations & EU, leaders IMF and World Bank  UN, AU, ASEAN, WTO  G-20 economies comprise 85% of global GNP and 80% of world trade.

 Trade imbalances  US wants restrictions on the size of trade surpluses and deficits with one another  Currency wars  /business /business  US wants China to float yuan / RMB  Set consistently lower than value of US $, keeping goods cheaper  -does-china-manipulate-its-currency/ -does-china-manipulate-its-currency/ ..  Allowing market to dictate value would shrink trade deficit by encouraging domestic sales, not exports  US position undermined by Fed’s $600b infusion  Weakens value of US dollar, importers make less (protectionist)

 Largest economy outside of WTO  20 yrs unsuccessful attempts  Issues with US (poultry, IPR & encryption) and EU (timber)  US will encourage Georgia not to use veto to block entry (political / border dispute)

 European Sovereign Debt Crisis  Portugal, Ireland, Italy, Greece, Spain Run large deficits Default on loans = insolvency for Euro banks (can’t collect large amts of $ owed)  Ireland negotiations… Crashing economy Poor lending practices, stagnant econ, housing crash, lack EU regulations Refusal to take European Central Bank rescue loan Know can’t pay it back Don’t want to give up econ/poly control

 IMF will investigate sources and consequences of imbalances.  Agreements on overhauling financial regulations.  Agreements on improving dvpt assistance for poor countries.  Agree to avoid competitive devaluation  US Failure to close free trade agreement with South Korea  Resistance from China & Germany over reducing trade surpluses.

 What is role of G20 in global economy?  Deal with financial and economic crisis  Set policies for growth & stability  Combat terrorist financing