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    Globalization of Economic Relation by Ivan Benczes PDF

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    y Te Limts of ge, Manuel ology of Chit 1 to Change 5 New York 8 for Social vd Alevandra SCE andthe ') The United Europe and vr and Loyd ew (Ottawa, nafs and son, 2007) -magazine! wary 208) Inthe past 80 year, the term ‘globalization’ thas camed considerable credit in the social sci- ences and has also gone into common use in public debates. Nevertheless, there is hardly ‘any consensus on either its precise meaning, or its determining forees or consequenes. Held et al. (1999) offer a convenient starang point fo: ‘any discussion on globalization by claiming that it ‘may be thought of initially as the widen ing, deepening and speeding up of worldwide interconnectediness in all aspects of contempo- ray social life’ (1999: 2). “Aspeets’ can refer to ‘political, technical and cultural, as well as ‘economic’ features (Giddens, 1999: 10), imply ing that globalization is best thought of as a ‘multidimensional phenomenon, Consequently, approaching globalization from a purely economic perspective is *... a ‘categorical mistake. That said, few discus- sions of globalization can, or do, ignore its economic foundations’ (McGrew, 2008: 280), This chapter has been writen within the spirit fof such an approach. Without doubt, eco- nomic globalization does not constitute the whole story of contemporary globalization, The Globalization of Economic Relations Istvan Benczes but in order to fully understand its meaning and implication, the economic dimension, as ‘one of the major driving forces of the process Of globalization, requires special anention. Following a short introduction, the first section is dedicated to the clarification of the definition, origin and consequences of eco- nomic globalization, As the two main fields of ‘economic globalization have been finance and trade, the second section discusses the evolu- tion of the major intermational monetary regimes, including the gold standard, the Bretton Woods system and European mone- tary integration. The third section discusses trade relations and trade policies, with a spe- cial focus on the unilateral trade regime of the late nineteenth and carly twentieth centuries and the multilateral regime of the post-World ‘War I era WHAT IS ECONOMIC GLOBALIZATION? According to one of the most often cited definitions, ef 136 ‘THE SAGE HANDBOOK OF GLOBALIZATION [eleonomic globalaation sa historical proces, the ‘result of human innovaton and teehoogtpro- (yess. refers to the increasing integration of Sconomies around the wo, patclty through the moverent of geod, sevice, and capa ares borders. The tem sometime: alo eles {0 the ‘movement of peop (abo and krousedge (ech nology] aces international boraers. (MF, 2008) The phenomenon can thus have several inte- connected dimensions, such as (a) tho glo- balization of trade of goods and services: (2) the globalization of financial and capital ‘markets; (3) the globalization of technology and communication; and (4) the globaliza- tion of production. ‘What makes economic globalization disinet from intermationalizaton is that while the later is about the extension of economic activites of nation states across borders, the fomer is “functional integration between intemationally Aispesed activities’ Dicken (2004: 12). That is, cconomic globalization is rather a qualitative transformation than just a quantitative change 1f however, globalization is indeed a‘comples, indeterminate set of processes operating very ‘wvenly in both time and space’ (bid, pV), 4 more substantive definition for economic lobalizaton is required than the one offered by the IMF (2008). The definition provided by Szentes 2003: 69) befits the pu.poses of this particular chapter: ‘in economic tems global sation is nothing but a process making the ‘world economy an “organic system” by extend- ‘ng transnational economic processes and eco- ‘omic relations to more and more countries and by deepening the economic interdependencies among them” The main advantage ofthe above defini tion is that although it does not deny the rel- ‘evance of the ‘international’, ‘regional’ or ‘national’ levels, it refuses the assumption that the nation (state) is the only unit of analysis and that current tends inthe world economy are simply the redesign of the extemal relations of interacting nations Instead, it claims that economic activities and processes (production in particular) can be interpreted only in a global context, i. in an integrated world economy. ‘To what extent isthe nation state sil rel evant (Dactor is a major topic of curent debates. For hyperglobalsts such as Ohmac (1995), states ceased to exist is primary eco rome ongunization units im the wake of a ‘lobal market. People are consuming highly standardized global products and services pro- duced by global corporations in a borderless world. Globalization transforms the national advocated by and targeted be huge service 1 finance and es-based trade ind gave birth stitution, the ae WTO was d has become ‘0tiations. As ‘nally consti- srsonality, THE GLOBALIZATION OF ECONOMIC RELATIONS, 1s Expectations were once again on the rise in Doha in 2001. The quasi-oficial Doha Round could have become # round on eco- nomic development, but the positions of the ‘opposing panics wete so rigid that it eventue ally failed to mect expectations. Developing ‘nations insisted on the corret and full imple= ‘mentation of the Uruguay’ Agreement (espe cially in the sphere of agriculture), while the United States tried to keep labour and envi- ronmental issues on the agenda, and the EU wished to nogotiate and codify competition and investment policies. None of the follow- ing ministerial conferences could reach a real breakthrough.”” The stalemate between the ‘two major camps, however, pushed develop countries t0 unite and strengthen their positions within the WTO by forming a pres- sure group called the Group of 20 (G20). The unprecedented coalition accounts for almost two-thirds of the world’s population and one- {quarter of global agriculturel export (Narlikar and Tussie, 2004), Developing Countries and International Trade Developing nations did not participate actively in multilateral trade negotiations for @ relatively long ‘ime. Apart from the so- called East Asian newly industrializing cuun- tries, which adopted an outward-oriented development strategy, most of the develop- ing countries did not manage to integrate into the post-World War I trading system suc- cessfully. On the one hand, they followed an ‘nward-looking, import substitution industri- alization strategy, which did not favour trade openness (Findlay and O'Rourke, 2007). On the other hand, advanced economies were also reluctant to open their markets 10 com- ‘modities such as textile or agriculture prod- vuets in which developing countries had a ‘natural comparative advantage. ‘The first major change in this state of affairs hhappened in 1964, when the United Nations Conference on Trade and Development (UNCTAD) was established with the joint effort of the developing world. The aim of UNCTAD was to promote trade and coopera- tion between the developing und the developed nations. A decade later plans fora new interna- tio economic onder were laid down, with the ile objectives of providing preferential access to advanced countries” markets, rencgo- Wiating debt, establishing intemational com- -modity agreement (to stabilize primary product prices), providing transfer of technology, and increasing aid substantially Salvatore, 2007). Nevertheless, the two oil crises and the conse- quent slowing down of economic activity in the developed nations swept these initiatives away Instead, advanced countries adopted highly protective measures (both tariffs anu! non-tariff ‘measurements) in order to cushion the negative (1993) The monetary ster: A is + 9a wel en "ales. The rae fom the shteenthcen= Se widespreas hoot grew at 4s but tout. a Revoluton grownh rates stoveen 1500 following 50 sage of 123 orld War | ‘be openness, dia) acheved 355 per cent 390s, respec. rates of 08 ne perigs. “ted States, ‘Aca isthe called “gold sted a wage 4, 1993), sensu ae ve: 2. effec 4: compet: nization; 6 alzaion: 7 ‘sment: & seaurty of their 1939- lo, 196). ‘tupal po- of dotting suces three mn absolute pods, it, nin doth: nus 63). on the 5 England ong. “ade, each ‘wine and without 2 concept crticzed ange the separated ‘THE GLOBALIZATION OF ECONOMIC RELATIONS “7 12 Asia possessed roughly two-theds of worlé GDP in 1700, wre the West accounted for one- ‘quarter only By 1950, the West had @ 60 per cert share, wr Aa fel to 20 pe cant Oxon, 2008; 34-5) 13 Alber the concent of unequal exchange has (ganed substowtal theoretical suppon, there Nae been much ssiterestin ts empl testng One ‘exception, power Kohler and Tauseh 2002) 14 “Trade policy deals with the economic effects of rector indrect goverment intervention. deals with the winner and losers that aie fom government intervention in. markets” (Ker, 2007:1) 15: That imernatenal vade can enhance peace and inteatonal politica lations a strong assertion In feral politcal theon, too ee Keonane, 1984) For amore ctcal approach, se Stange (1985) 16. See Eengreen (1969) on the poital economy of the act, 17 Minster conferences inorder of te were the Cancun (2003) meeting, the Hong Kong meet: ing (2005) and two conferences 19 Geneva (2009 and 2011), 18 The share of peiary commodity export was 81 et cent in Atnea, 79 per cent in the Pacic bland stats, 72 per cent inthe former Sovet Union counties and 55 per entin Latin America ‘and the Caiboean in 2009 (UNDP, 2011). REFERENCES ‘Amin $ (1976) Unequal development. Sussex. The Hanestr Pres. ‘min 5 (1993) The challenge of gobalsation: Deng. In: The South Cente: Facing the challenge. London: ZED Books, pp. 132-8 Aig (2005) Gabalzaton in world-sytems per specve In: Appelbaum UL and Robinson I (ec) ital globalization studies. London: Routledge, 9. 334 ‘Aighi G and Ser 8 (2003) Poany's double move- ‘ment. The bee ércques of British ard US hegemony Compare. Politics & Society 312) 325-55, Batch P (1993) Economies and word history: Myths ‘and paradoxes. 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