GLST 201: Week 10 Trade (copy)

Japan Post War Reconstruction

Started advanced consumer product export through…

• Keiretsu: private Japan conglomerates that receive considerable state support and subsidies to develop and are vertically integrated through the supply chain through subsidiaries

Asian Tigers

Which are…

• Singapore

• Hong Kong

• Taiwan

• South Korea

What makes these countries an Asian Tiger…?

• Export oriented development

• Rapid economic growth

• Financial markets

Export oriented development: policy of expanded production of cheap competitive goods to export on the international market increase foreign revenues

Chaebol: (in South Korea) a large family-owned business conglomerate

Indian Economic Liberalization

Outsourcing: practice subcontracting production or services traditionally performed in-house to 3rd party companies in another country to reduce cost

• Due to economic crisis the Indian government turned to outsourcing and liberalization

Collapse of the Soviet Union

Under Mikhail Gorbachev rule…

• Decentralization and Democratization

• Glasnost: the policy or practice of more open consultative government and wider dissemination of information

• Perestroika: limited economic reforms that allowed for some free-market consumer products, as well as political reforms that allowed limited public criticism of Soviet government

Russia Federation

Boris Yeltsin (ruled till the 1990s)

• neo-liberal markets

• criminal underground

• standard of living in decline

Vladimir Putin (1990s-today)

• focus on energy sector

• authoritarianism

• soviet glory

Kleptocracy: system in which government officials and oligarchs are highly corrupt and use political power as a means to expropriate wealth of the country they govern

Opening and Reform in China (1978)

Deng Xiaoping, starts opening and reform…

• Depoliticization of economy

• Marketization of economy

• Political Reforms

• Socialism with Chinese characteristics

Import Substitutions: economic policy of replacing foreign imports with domestic production through targeted protections of domestic industry, grants, tax incentives, and subsides, in order to grow a competitive domestic industry

Crony Capitalism: economic system characterized by close, mutually advantageous relations between business and government officials

Shaping of Modern International Trade

Containerization: standardized shipping containers, which makes loading and unloading easier

Panamax: Panama Canal standards met in a cargo boat

Protectionism: policies that shield a country’s domestic industries from foreign competition by taxing imports

Free Trade: set of policies that allows for unrestricted international and domestic trade, without the imposition of qualified regulations or taxes targeting particular places of origins and industries

Free Trade Agreements: an agreement between 2 or more countries to reduce or eliminate import and export barriers among them

• Pros:

  • Econ increases

  • Govt. spending decreases

  • Tech. transfer

  • Access to resources

• Cons:

  • Increase in competition

  • Outsourcing

  • Poor working conditions

  • Degradation of resources

Fair Trade: trade arrangement designed to help producers in developing countries achieve sustainable and equitable trade relations

North American Free Trade Agreement (NAFTA): free trade agreement in force between the US, Canda, and Mexico since 1994 (destroyed the middle class in these nations)

Trans-Pacific Partnership (TPP): proposed free trade agreement between Australia, Canda, Japan, Mexico, Chile, New Zealand, Peru, Singapore, Vietnam, Malaysia, and US (US withdrawal 2017 and agreement collapsed)

Transnational Corporation: enterprise that is involved with the international production and retail of goods or services, foreign investment, and/or income and asset management income than 1 country

Portfolio Investment: purchase of stocks, bonds, or other financial assets that doesn’t result in direct management or control an enterprise

Direct Investment: acquisition of corporations’ assets through the purchase of a property, a plant, or equipment (example: McDonald’s overseas)

Joint Venture: 2 companies that work collaboratively for business venture

Subsidiary: a company that is owned by and subordinated to another companies and corporations

Acquisition/Merger: companies that purchase or mergers with another company

Labor Unions: organization formed by workers to negotiate for better rights for workers including pay, time, safety, facilities, and conditions

Regulations: any government rules that regulate the way business is conducted, including administrative procedures as well as safety, labor, environment requirements

Deregulations: process of removing regulations, particularly those viewed as a hinderance to company profitability

The Effects of Trade and Development

Economic Sovereignty: belief that globalization has made countries highly vulnerable to disruptions during crisis and that countries should enable domestic production of necessary goods through protectionist measures

Global Poverty: is defined as the number of people worldwide who live on less than $1.90 a day

Gini Coefficient: is a statistical measure of income inequality, wealth inequality, or consumption inequality within a nation or social group

Gender Pay Gap: women on average paid $0.77 for every $1.00 men are paid

Food Security: having access to food

• Malnutrition: occurs when an organism gets too few or too many nutrients, resulting in health problems

• Undernutrition: is a deficiency of calories or of one or more essential nutrients

• Micronutrition: micronutrients are extremely important for the proper functioning of your body like vitamins and minerals

• Overnutrition: form of malnutrition where the intake of nutrients exceeds the amount required for normal growth, development, and metabolism

World Health Organization (WHO): providing essential food aid for people’s health

Food and Agriculture Organization (FAO): boosting food production to feed the world

Food Aid Programs: wealthy countries provide surplus food production to poorer countries