Globalization – Empire Building

Global Economy

• No country on earth has, within its boundaries and jurisdiction, all the resources needed to operate as a developed country.
• The USA imports 100% of more than a dozen key mineral resources.
• Benefits:
• Greater economic diversity and job opportunities for countries.
• Better quality, lower cost consumer products.

Three Levels of Cooperation

• Free Trade Area – No internal tariffs
• Each country sets tariffs for nonmembers
• Customs Union – Eliminates internal tariffs & adopts a common external tariff policy
• Common Market–closest level of cooperation
• Eliminates internal tariff & sets common external
• Common laws relating to production
• May establish some common political institutions & may work toward eventual political union
• Many common political, economic, & social areas

Economic Unions

• The development after WW II of the European Union has improved living standards among members and given Europe the longest period of peace
• NAFTA has the potential to do that in the Western Hemisphere – effort are being made to expand it.
• Initially there are some dislocations, but in the long-run member countries and their citizens benefit

EU Cooperation – potent force

• European Parliament – growing but limited power
• One huge market for goods, capital, labor
• Euro accepted by most but not all
• Transportation system at all levels
• Regional policy to assist poor agricultural areas and declining urban areas
• Social policy – laws for work, labor, visas, etc.
• Environmental policies
• Defense (really through NATO)

European Union Growth