THE GLOBAL ECONOMY

Economic Globalization – the increasing interdependence of world economics as a result of growing

scale of cross-border trade of commodities and services, flow of international capital and wide and rapid
spread of technologies

Two types of economies

PROTECTIONISM Protecting one's economy from foreign competition by creating trade barriers

TRADE LIBERALIZATION Reducing trade barriers to make international trade easier between countries.

TRADE BARRIERS Required fees on import/exports of goods

EU CANADA

CETA Comprehensive economic and trade agreement. Is a free-trade agreement between Canada and
the European Union. It has been provisionally applied, thus removing pre existing 98% of the tariffs
between the two parts

FREE TRADE Trading between of goods and services two or more countries without tariffs or taxes

The Canada –Korea Free Trade Agreement (CKFTA) ; less often known as CSKFTA - Canada -South Korea
Free Trade Agreement) is a free trade agreement between Canada and South Korea . Upon full
implementation, Canada will eliminate 97 . 8 % of its tariff lines for goods imported from South Korea ,
and South Korea will eliminate 98 . 2 % of its tariff lines for goods imported from Canada

INTERNATIONAL TRADE - International Trade i s the process and system when goods, commodities,
services cross national economy and boundaries in exchange for money or goods of another country
(Balaam and Veseth, 2008). Global trade has grown dramatically since the post-cold war era as a result of
increasing demand of goods and services of countries. This global norm i s a reflection of growing
practice of internationalizing and globalizing local products and services

PRICING

LAW

TARİFF

İMPORT

COST
ORİGİN

EXCHANGE

RATE

GLOBALiZATION

OUTSOURCiNG

FREiGHT

DOCUMENTS

CUSTOMS

İNSURANCE

The Modern World System (MWS) theory developed by Immanuel Wallerstein (1974), i s an approach to
world history and social change that suggests there i s a world economic system in which some countries
benefit while others are exploited. The world systems theory a three-level hierarchy consisting of core, is
established on periphery, and semi-periphery areas. This theory emphasizes the social structure of global
inequality
MARKET INTEGRATION Market Integration occurs when prices among different locations or related
goods follow similar patterns a long period Groups of goods often over mov proportionally e of time. to
each other and when this relation i s very clear among different markets, i t i s said that the markets are
integrated
HORIZONTAL INTEGRATION This occurs when firms or agency gains control of other firms or agencies
performing similar marketing functions at the same level in the marketing sequence. In this type of
integration, some marketing agencies combine to form a union with a view to reducing their effective
number and the extent of actual competition in the market

VERTICAL INTEGRATION This occurs when firms perform more than one activity in the sequence of the
marketing process. It is a linking together of two or more functions in the marketing process within a
single firm or under a single ownership. This type of integration makes it possible to exercise control over
both quality and quantity of the product from the beginning of the production process until the product
is ready for the consumer

TYPES OF VERTICAL INTEGRATION

FORWARD INTEGRATION- It occurs when a company decides to take control of the postproduction
process

BACKWARD INTEGRATION- It occurs when a company decides to buy another company that makes an
input product for the acquiring company’s product

CONGLOMERATION The process whereby a firm expands by supplying a range of different products and,
as such, operates in several markets rather than a single market. Example: In addition to phones and
other electronics, Samsung builds ships, undertakes major construction projects, and is involved in
businesses that include food processing, textile manufacturing, insurance, financial products, and
consumer retail

THE BRETTON-WOODS SYSTEM The Bretton Woods Agreement and System created a collective
international currency exchange regime that lasted from the mid-1940s to the early 1970s. The Bretton
Woods System required a currency peg to the U.S. dollar which was in turn pegged to the price of gold

INTERNATIONAL FINANCIAL INSTITUTIONS International Financial Institutions are international non-

profit agencies, one of the major sources of financing like regional development banks or banks globally.
Major role productive development projects or to promote economic development. i s to finance I F I s
focus on long-term investment on social, environmental, and poverty projects, institution-building, and
issues, strengthen economic governance, ensuring the s t a b i l i t y of international financial system, and
trade liberalization. I F I s achieve these objectives through loans, credits, and grants to national
governments. Such funding i s usually tied to specific projects that focus on economic and socially
sustainable development.
GLOBAL/ TRANSNATIONAL CORPORATION As the global economy is becoming complex and competitive,
Multinational Corporations continue to offer innovations, new products, and services. For several years,
the term Multinational Corporations was used to describe a firm operating in different countries around
the world. Because of the magnitude of global production and networks, the term Transnational
Corporations became the more acceptable name. This refers to business organizations and firms that
compete in regional or global markets. It operates in countries and makes investments in research,
technology, facilities, distribution, and production. TNC can control and monopolize the global market
especially if it has a huge pool of resources