Globalization


We live in a time of worldwide change. What happens in one part of the world impacts people on all other sides of the world. People around the world are influenced by common developments.
The term Globalization is used to describe this phenomenon. According to Harris, the term is being used in a variety of contexts. In a very broad context, media use it almost daily to refer to a wide variety of political, sociological, eviromental, and economic change.
The business world, however, uses this term in a much narrower context to refer to production, distribution, and marketing of goods and services at an international level. Everyone is impacted by the continuing increase in Globalization in a variety of ways. The types of food we eat, the kinds of clothes we wear, the variety of technologies that we utilize, the modes of transportation that are available to us, and the types of jobs we pursue are directly linked to Globalization. Globalization is changing the world we live in.

Causes of Globalization

Harris indicates there are three main factors contributing to globalization.
The factors include:

· The reduction in trade and investment barriers to the post- world war II period
· The rapid growth and increase in the size of developing countries’ economies
· Changes in technology

Trade Agreements
Originally each nation established its own rules of governing forein trade. Regulations and tariffs were often the outcome, leading to the tariff wars of the 1930’s.
Nations have found it convienent . . . to agree to rules that limit there own freedom of action in trade matters, and generally work toward the removal of artificial and often arbitrary barriers to trade.

Many trade agreements exist in the world today. Of those agreements (general agreement on tarrifs and trade [GATT], the European community, and the north American free trade agreement [NAFTA] have had or will have significant impact ont eh united states.
GATT. The first trade agreement of major significance was the generalk agreement of tariffs and trade. GATT was aimed at lowering tariff barriers among its members. The success of the organization is evidenced by its membership. Originally signed by 23 countries in 1947, the number of participating countries continues to grow.
The Uruguay Round of GATT is the most Ambitious Trade Agreement ever attempted. Some 108 nations would lower tariff and other barriers on textiles and other agricultural goods; protect one anothers intellectual property; and open there borders toi banks, insurance companies, and purveyors of other services.
The European Community. The European Community is another example of how trade agreements impact the production, distribution, and marketing of goods and services. The 12 member nation of the European Community have dismantled the international borders of its members to enhance trade relations.
Disamanteling the borders was the first step in an even greater purpose- the peaceful union of European countries. The first step was done by the Paris and Rome treaties, wich established the European community and consequently removed the economic barriers. The tariff called for members to establish a commen market; a commen customs tariff; and commen economic, agricultural, transport, and nuclear policies.
NAFTA. A trade agreement that will have a significant impact on the way business is conducted in the united states in the North American Free Trade Agreement. This trade agreement involves Canada, United States, and Mexico. Proponants of NAFTA say it will not only increase trade throughout North America, but will also moderate product prices and create jobs in all three of there countries.
Over the years a number of Trade agreements have been enacted that promote trade. The result of these agreements has been an enhanced quality of life because of the increased access to goods and services produced in other countries.

Growth in developing countries economies
Growth in developing countries economies is another major reason for globalization. According to Jacob, the surge means more consumers that need goods and services. These needs appear because of the increase in per capita income of developing countries.
According to the U.S. department of commerce , the worlds ten biggest emerging markets include:
· Argentina
· Brazil
· China
· India
· Indonesia
· Mexico
· Poland
· South Africa
· South Korea
· Turkey

Of these emerging markets the