Universidad de Zamboanga

School of Education Arts, and Sciences

Perseverance and Selfless Service

CONTEMPORARY WORLD

Lesson 3 : THE GLOBAL ECONOMY

Economic Globalization and Global Trade
• Economic Globalization- refers to the increasing interdependence of
world economies as a result of the growing scale of cross-border trade
of g and service, flow of international capital, and wide and rapid
spread of technologies.
Two types of Economies associated with economic globalization.
1. Protectionism
2. Trade Liberalization
What Is Protectionism?

⮚Protectionism refers to government policies that restrict international

trade to help domestic industries. Protectionist policies are usually
implemented with the goal to improve economic activity within a
domestic economy but can also be implemented for safety or quality
concerns.
Key takeaways!
✔Protectionist policies place specific restrictions on international trade
for the benefit of a domestic economy.
✔Protectionist policies typically seek to improve economic activity but
may also be the result of safety or quality concerns.
✔The value of protectionism is a subject of debate among economists
and policy makers.
✔Tariffs, import quotas, product standards, and subsidies are some of
the primary policy tools a government can use in enacting
protectionist policies.
What Is Trade Liberalization?

• Trade liberalization is the removal or reduction of restrictions or

barriers on the free exchange of goods between nations. These barriers
include tariffs, such as duties and surcharges, and nontariff barriers,
such as licensing rules and quotas. Economists often view the easing
or eradication of these restrictions as steps to promote free trade.
Key Takeaways!

✔Trade liberalization removes or reduces barriers to trade among

countries, such as tariffs and quotas.
✔Having fewer barriers to trade reduces the cost of goods sold in
importing countries.
✔Trade liberalization can benefit stronger economies but put weaker
ones at a greater disadvantage.
What is a Tariff?
⮚A tariff is a tax imposed by one country on the goods and services
imported from another country.

How a Tariff Works?

Tariffs are used to restrict imports by increasing the price of goods and
services purchased from another country, making them less attractive to
domestic consumers.