Globalization

Globalization

Introduction

This paper will define globalization, discuss three examples of each of the major drivers of globalization, examine four effects of globalization and discuss regional trading blocs.

Globalization

Since the 1970's the different markets of the world have been reaching across thousands of miles in order to trade with each other. The world has slowly been becoming one giant marketplace. Globalization has helped to boost economies as well as increase the ease of travel.

Major Drivers of Globalization

According to Jack Treddenick, there are two major drivers of globalization, technological change and the lowering of national barriers to foreign trade and investment.

An example of technological change would be the internet boom. For as long as anyone can remember women have wanted the latest fashions from Paris. Before globalization, they had to wait months for their gowns to arrive by coach, boat and train. Today, women can merely go online, browse the fashion section of any website, click on what they desire it is shipped to them overnight.

Another example of technological change would be websites such as ebay.com where any individual can sell any item to anyone in the world; it is essentially the biggest garage sale ever.

A third example of technological change would be production; in the 1900s people were making products largely by hand. Today, machines can whip out a dozen sweaters in an hour and make them higher quality. This way the global market can demand more products at a higher quality.

By lowering national barriers to foreign trade, countries all around the world have been able to enjoy tariff free products which help to open the markets for more innovative products.

For example, Panama is now allowed to trade Pharmaceuticals, foods, and school supplies without suffering a tariff. Also, any other import is subject to only a 5% tariff as opposed to the previous 8%.

Another example would be the trade agreements that enable Ohio-made products to compete in markets around the world. Since 1994, the goods exported from Ohio to Mexico have grown 300%, and since December of 2000, Ohio's had more exports than any other state in the US.

A third example would be Mexico. All tariffs on trade between the United States and Mexico will be dismissed immediately by the North American Free Trade Agreement (NAFTA). The tariffs on beer will be slowly removed over 8 years.

Effects of Globalization

Globalization affects the Presort mailing industry by making it easier to ship packages and mail overseas. Also, orders can be received from anywhere via e-mail.

In the SE Portland community, globalization has made it easier to buy products from other countries as well as enriched the community by bringing immigrants from other countries.

Regional