G LOBAL

ECONOMY
“Trade is the oldest and most important economic nexus among
nations. Indeed, trade along with WAR has been central to the evolution
of international relations.
–Robert Gilpin
 ACTORS
ECONOMIC
GLOBAL
DIMENSION
ECONOMY
[ECONOMY]

INTERNATIONAL
TRADE
Driving force of globalization
INTERNATIONAL MONETARY
SYSTEM
END

ECONOMIC To deepen the interdependence between

the local and the distant
GLOBALIZATION
ECONOMIC GLOBALIZATION
A process making the world economy an “ORGANIC SYSTEM”
by extending transnational economic processes and economic
relations to more and more countries and by deepening the
economic interdependence among them.

INTEGRATED WORLD ECONOMY

 Factors of production

GOODS/SERVICES

SUBSIDIES Government

INVESTMEN SAVINGS
T

IMPORT EXPORT
INTERNATIONAL
TRADE
 INTERNATIONAL TRADE
• International Trade is the process by which nations
export and import GOODS, SERVICES AND
FINANCIAL CAPITAL

• International trade is vital to economic growth because it EXPANDS

A NATION’S CONSUMPTION POSSIBILITIES.
 ECONOMIC BASES OF TRADE
1. Different nations are endowed with various kinds and
amount of natural resources
2. The production of varied goods and services require
different combinations of economic resources and also
particular technology.
3. Various nations have different specializations that make their
products highly differentiated.
 DOES
International
HYPERGLOBALI Trade SCEPTICS
STS
BENEFIT THE
WORLD?

TRANSFORMATIONALI
STS
 AIM
STANDARDS/GENER ACTORS
INTERNATION AL RULES
INTERNATIONA
AL TRADE STATES L
ORGANIZATION
S

TRADING BLOCK
An agreement
between countries
intended to reduce
or remove barriers
to trade within
member countries
WHAT ARE TRADE BARRIERS?

• TARIFF
• QUOTA
• GOVERNMENT POLICIES (i.e. subsidies, quality
standards)
• EMBARGO
TRADING BLOCKS
PROTECTION
ISM
reduction or
removal of trade
barriers
 TRADING BLOCKS
Reduce or remove barriers to trade

FREE TRADE CUSTOMS UNION SINGLE MARKET

AREAS

No tariff between No tariff between No tariff between

members members members
Common external Common external
tariff tariff
Common rules and
regulations
THE ASEAN FREE TRADE AREA (AFTA)
• Common Effective Preferential Tariff (CEPT) Scheme for
AFTA- lowering of intra-regional tariffs
 THE EUROPEAN UNION

The Union Customs Code (UCC) defines the legal framework for customs rules and
procedures in the EU customs territory, adapted to modern trade models and
communication tools.
Common Agricultural Policy (CAP) and Common
Fisheries Policy (CFP) of the European Single Market
(ESM).
The Schengen Agreement” – covering the gradual
abolishment of the internal borders between countries
and an extended control of the external borders
ECONOMIC GLOBALIZATION
A process making the world economy an “ORGANIC SYSTEM”
by extending transnational economic processes and economic
relations to more and more countries and by deepening the
economic interdependence among them.

INTEGRATED WORLD ECONOMY

 14 June 1985 – signing the Schengen Agreement:
Catherine Lalumière (France), Waldemar
Schreckenberger (Germany), Paul De Keersmaeker
(Belgium), Robert Goebbels (Luxemburg) & Wim van
Eekelen (Netherland).