Features of Globalisation

Features of globalisation

• The key indicators of integration between economies include:

• International trade flows

• International financial flows

• International investment flows and transfers of technology

International trade flows

• Trade in goods and services throughout the world has grown very rapidly in recent years

• Annual growth in the value of trade has been consistently around twice the level of world economic growth

Growth of World Trade and World Output

0

2

4

6

8

10

12

14

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Year

% i

ncr

ease

Global Trade World Output

International trade flows

• Much of this rapid increase in international trade flows can be attributed to the influence of TNCs (Transnational Corporations)

• TNCs are global companies which dominate global product and factor markets

• TNCs often structure production so that different stages of the production process occur in different parts of the world depending upon costs

International trade flows• The increase in world trade has also resulted

from trade agreements such as:

• The General Agreement on Tarrifs and Trade (GATT) 1993

• The World Trade Organisation (WTO)

• The North American Free Trade Agreement (NAFTA)

• Asia-Pacific Economic Cooperation (APEC)

• The European Union (EU)