Globalization: Costs & Benefits Essential Questions: Who gains from trade? How do forces of globalization affect international trade?

Key Terms Define these Unit 4 Key Terms  Developed country  Developing country  Least-developed country (LDC) Add this term to the Unit 4 Key Terms  Globalization  Globalization -the growing integration of economies, cultures, and societies worldwide.

Warm-Up  What is one befit of global trade?  What is one negative effect/downside?  Crash Course-Globalization Video #1 Crash Course-Globalization Video #1

BENEFITS of Global Trade & Globalization  Increased variety, lower priced and higher quality goods/services.  Poverty is reduced--poorer countries become “less poor” than otherwise.  Globalization leads to a sharing of ideas, goods and services, technology, culture, etc. and benefits all areas of life.  International cooperation—ex. agreements to combat global warming, human/animal rights violations, etc.

TRADE & INTERNATIONAL ORGANIZATIONS

World Trade Organization (WTO)  Approximately 140 countries are member states.  Draws up and enforces international trade agreements between member states.  Intended to protect workers through collective power and effective trade deals.  Example: If a country places a tariff against another country or on a particular good, the WTO may issue trade sanctions against the violating country. The WTO will also work to resolve the conflict through negotiations.

WTO- Criticism  The organization works to benefit wealthy nations and large corporations at the expense of poorer countries.  The WTO’s policies endanger workers’ rights and the environment.  Prevents upward mobility of developing countries and LDCs.

United Nations (UN)  Approximately 192 countries are member states.  Analyzes economic issues and provides aid to poor.  Intended to protect LDC through collective power and protective measures such as sanctions or resolutions.  Example: The Arms Trade Treaty (ATT), regulating the international trade in conventional weapons -from small arms to battle tanks, combat aircraft and warships.

UN- Criticism  The organization is so large it is paralyzed by debate and ineffective to act or act decisively.  Some of the UN’s policies violate national sovereignty or interfere with free market trade.  Some of their economic sanctions don’t work—harm the innocent.

World Bank  Lends money to developing and LDC countries.  Intended to help fund infrastructure building and improvement.  Example: The World Bank loaned Pakistan $350 million to help fund the Evergreen Hydroelectric Project, bringing electricity to a large part of the country without reliable sources.

World Bank- Criticism  The projects funded benefit large business interest and/or corrupt government officials.  Some of the projects, such as those in the Amazon Rain Forest or Asian river basins are harmful to the environment.

International Monetary Fund (IMF)  Offers economic advice and low-interest loans to struggling countries, especially countries with high foreign debt.  These loans have very strict conditions attached, such as budget cuts, etc. (like a credit counselor).  Example: Following economic downturn in Greece in the 200s, the IMF has given the country loans to help stabilize their economy. A condition for the loan was to cut some social programs such as pensions for higher-income retired government retirees.

IMF- Criticism  The conditions of the loans violate sovereignty and are often harmful.  Cutting of spending for social programs usually harms the poorest of a country’s poor.  “Traps” poorer countries into a cycle of debt— instead of debt forgiveness.

COSTS of Global Trade & Globalization  Slower growth in LDC economies than others.  Exploitation of poorer countries’ resources.  Human rights violations and government corruption.  Comparative advantages make it difficult for LDC’s to ever “improve.”  Damage to the environment.  Cultural loss/dilution.  Crash Course-Globalization Video #2 (time saver—6:08-8:41 & 11:40- 11:27) Crash Course-Globalization Video #2

Exit Ticket  Read the “Critic” statement on your exit ticket.  Examine the image to the right.  Using the information you learned in class, complete the “Proponent” statement at the bottom. The Philippines