Name: Devine Grace Lequigan

Program/Yr./Sec: BSED-ENGLISH 2A
Course: Contemporary World

ECONOMIC GLOBALIZATION AND TRADE

Economic Systems relate to the systems and procedures used in the creation,
distribution, and consumption of commodities and services within a society. It emerged
during the Industrial Revolution of the 18th and 19 th centuries. New manufacturing
technologies affected the production and trade of commodities. Its three main
categories are Market Economies (demand and supply decide prices), Command
Economies (government regulates every area of the economy), and Mixed
Economies (the first two are present in here).
Skill specialization and the division of labor promoted economic prosperity
(Hunt, 2017 as cited by Adam Smith). Circular Economy emphasizes sustainability
and social responsibility. Endorsed by the UN as a strategy in attaining sustainable
development - designing out waste and pollution, keeping goods and materials in use,
and regenerating natural systems.
Important Key Points of the Video:
Economic Growth. It is measured through the value of all products
manufactured and sold in a country of the course of one year, along with
everything that people do and get paid, amounts to the Gross Domestic Product
(GDP). When people with money buy more products, the economy of the country
grows. Politicians works to achieve greater employment, stable prices, and
balance between imported and exported goods. Healthy people, nature, and
opportunities serves also the basis of economic prosperity because both has the
same value.
Globalization and Free Trade foster economic growth and advancement by providing
businesses with greater prospects to expand and function globally.
Free Trade Agreements (FTAs) are trade pacts.
• More than 300 regional trade agreements in place across the globe (World Trade
Organization). Trans-Pacific partnership (TPP), covering 11 nations in the Asia-
Pacific area, and North American Free Trade Agreement (NAFTA), involving the
US, Canada, and Mexico.
Important Key Points of the Videos:
Trans-Pacific Partnership (TTP). It is the world’s largest free trade area,
accounting 40% of the global economy. The agreement is expected to make a huge
difference to trade between its members with an estimation of $295 bn. within a
decade. Its goal is to support jobs, thrive sustainable growth, foster inclusive
development, and promote innovation across Asia-pacific region. Significantly, it
 sets to achieve an ambitious, comprehensive, high standard, and balance agreement
that will benefit all nation’s citizens.

North American Free Trade Agreement (NAFTA). It was signed in 1994. Its
goal is to make North America a highly competitive commercial block on the global
stage, abolish trade obstacles, and boost investment opportunities in small and
medium enterprises. Canada and Mexico accounts almost one fourth of all US
imports including processed foods, crude oil, livestock, machinery, and vehicles. The
provisions of the agreement are the following: 1.) removal of non-tariff barriers; 2.)
tariff reductions for qualifying products; 3.) resolving trade disputes; 4.)
establishment of standards; 5.) intellectual property rights protection for industries;
and 6.) supplemental agreements.
Salient points, pros and cons of FTAs:
1.) Eliminate trade restrictions, such as tariffs and quotas among nations;
2.) Promote economic integration and growth while giving consumers and businesses
additional opportunities;
3.) Cover a wide range of trade problems – labor standards and environmental
protection as well as specific industries or products;
4.) Harm local economies, communities, and income inequality as well as labor and
environmental norms; and
5.) Essential tool for fostering global economic growth and integration.
Important Key Points of the Video:
Free Trade vs. Protectionism. Increase in trade helps a society prosper. The
advantages of Free Trade are the following: 1.) consumer’s choice of goods &
services; and 2.) cooperative relationships among countries. On the other hand,
Protectionism is about restricting trade to shield domestic industries from
foreign competition. There are laws created by importing countries. First, tariff
– a tax on imported goods, making the product expensive, and pushing people to
buy the domestic ones instead. Second, import quota is a limit placed on the
amount of a good that can be imported. Another trade barriers that government
may done is safety regulations and the need for business license to acquire
license fees in return. If it is politically driven, a country may impose sanctions
– an action being took in order to punish/put pressure to another country such as
Embargo – an official ban on trade. The advantages of Protectionism are the
following: 1.) helps industries that are hurt by foreign competition; 2.) helps
infant industries or those in early stages of development; and 3.) necessary in
national security crisis.
Globalization and Economic Expansion
a. Globalization can promote economic growth by opening up new opportunities for
commerce, investment, and technical advancement.
b. Expanding markets and encouraging competition can help increase productivity,
lower costs, and generate new industries and jobs.
c. Help nations focus on producing goods and services where they have a comparative
advantage, increasing productivity and efficiency.
d. Globalization can also harm economic progress, particularly in underdeveloped
nations.
e. Increased competition from foreign producers due to trade and investment
liberalization may harm native industries and cause job losses.
f. Globalization can also aggravate inequality and environmental deterioration, which
can impede social stability and economic growth.
Some studies related to Economic Globalization shows that nations with greater
trade openness typically gain economically more than nations with larger trade barriers.
While there may be some bad effects of globalization, there have also been some positive
effects, especially in reducing poverty.