JMGA BSA 1-D

1. What makes economic globalization distinct from internationalization?

Globalization is the connection of different parts of the world resulting in the expansion of
international cultural, economic, and political activities. It is the movement and integration of goods and
people from different countries. On the other hand, Internationalism can be defined as the principle of
cooperation among states, for the promotion of their common good, sometimes as contrasted with
nationalism, or devotion to the interests of a particular nation.
Globalization refers to any activity that brings the people, cultures, and economies of different
countries closer together. This refers to the global economic integration of many formal, national
economies into one global economy mainly by free trade and free capital mobility but also by easy or
uncontrolled migration. Here we can see that Globalization is the result with which free and open trades
are result in global business markets. In achieving this, various brands started putting their steps outside
the nation with a corporate strategy that involves making products and services as adaptable as possible,
so they can easily enter into different national markets as well as those that are up to the mark of
international standards which is nothing but the internationalization of that brand or product.
2. Discuss and critically evaluate discusses the evolution of the major international monetary
regimes, including the gold standard, the Bretton Woods system and European monetary
integration?
Each country has its currency and the International Monetary System governs the valuing and
exchange of these currencies in the world. However, I agree with many observers that IMS has instability
in the system having a lack of a coherent set of exchange rate policies among systematically important
economies. The system may have continued to evolve and it has evolved due to different political,
economic, and social breakdown over the centuries. The first-ever international monetary system in the
world was the Gold standard. Many years ago, the first gold coins were minted and used for trade.
Initially, most currencies were pegged to gold directly as the name gold standard suggests. People could
walk into a bank and exchange a piece of paper money to gold. Later then failed because of its rigid
conditionalities. It is agreeable since gold, besides its durability, its high production costs make it costly
for governments to manipulate short-run changes in its stocks.
After world war II, the world needed a new financial system. The gold standard was considered too
rigid but at the same time, economists were worried that countries would devalue their currency to boosts
exports. Therefore, 44 countries sent delegates to the conference held in Bretton Woods New Hampshire
in 1944. The US which held two-thirds of the world’s gold reserves became very influential in a way that
all currencies ended up linked to the dollar and was linked to gold. With concern to this, the issue of the
devaluation of currency when it comes to economic crisis arose, which led to the creation of two
institutions to address the issue. First, the International Monetary Fund which financially assists countries
that are in trouble and have difficulties restoring equilibriums by lending money. Second, the
International Bank for reconstruction and development which is currently called the world bank, to help
less developed countries grow. Unfortunately, Bretton woods System did not perform any better and
collapsed because the United States kept running deficits to fund various projects, and therefore the
number of dollars in existence kept increasing while the gold reserves of the US kept shrinking as more
countries demanded gold in exchange for their dollars. As the US started to advocate an economically and
militarily strong Germany and Western Europe later on, after its post-war reconstruction program,
established the European Economic Community (EEC). The collapse of the Bretton Woods, however,
pushed the member countries in agreeing on setting up a regional monetary regime, the European
Monetary System (EMS) in which became a success for it was a unique system since neither the US
dollars nor gold could play a role in the stabilization process of exchange rates. Agreeing to this, EMS
was a monetary program that aims to promote price and exchange rate stability, as well as economic
growth.
3. What are the issues and processes that confront trade relations and trade policies?
Globalization and trade although present new opportunities, challenges cannot be avoided.
Starting with international trade and trade policies, where countries could benefit from voluntary trade.
Hamilton and List recognized that voluntary trade can have very different distributional effects and can
also hinder the long- term development prospects of the country producing the lower value-added
products. With this, the leading role in the transformation of the world economy managed to gain control
of the rest of the world creating a unique and unfair global division of labor. Also, International trades can
trigger tensions not just between nations, but also within a particular country. On the unilateral trade
order, the era, however, was not without conflicts and interruptions to free trade. The United States
adopted a highly protective import substitution industrialization with tariffs on manufacturing goods.
Other countries even the UK enacted few protectionist measures as a response to the inflow of cheap
agricultural products from overseas. Nevertheless, neither the prevailing unilateral trade regimes nor the
hegemonic position of the UK was threatened. Regime of non- institutionalized unilateralism, the new
trade regime was more or less a liberal, multilateral rules-based system backed by a solid legal approach
to trade relations (Winham, 2008). In a place of a unique trade organization, nations committed to a world
of lowered tariffs decided to coordinate their actions under the auspices of the General Agreement on
Tariffs and Trade (GATT) where from 1964 onwards, the scope of trade negotiations experienced a slow
but steady expansion.
The Uruguay Round extended multilateral rules to new issues and sectors, such as agriculture
(which culminated in a bitter dispute between the United States and the EU). After almost 50 years of
rules-based trade negotiations, World Trade Organization was created. Although the developing countries
represented a unified front for a new round of trade negotiations in Seattle, 1999, the ministerial
conference closed without reaching concrete results. Nonetheless, Seattle illustrated the quality of NGOs
and anti-globalization developments, which dissented not as it were in favor of the impeded and less-
developed nations but too against the current status quo of world issues counting the dominance of the US
economy, the narrow-minded intrigued of huge multinational organizations and the accepted unfair
workings of the WTO. The stalemate between the two major camps, however, pushed developing
countries to unite and strengthen their positions within the WTO by forming a pressure group called the
Group of 20. Developing nations did not participate actively in multilateral trade negotiations for a
relatively long time. On the one hand, they followed an inward-looking, import-substitution
industrialization strategy, which did not favour trade openness. All in all, the current trade regime and
especially its main propagator, the WTO, is heavily criticized for 'a striking asymmetry. This asymmetry
lies at the heart of inequality in the rules of the game for globalization'.