Anti-globalisation (AG) u7 p34

AG pressure groups cite free trade, trade and wages, employment, exporting of jobs, the environment, the role of multinationals, intellectual property, migration and cultural imperialism all as issues affected negatively by globalisation.

There have been many NGOs, student groups and trade unions that have applied pressure to firms such as Gap and Nike to improve working conditions in developing economies where they do much manufacturing. The following are common criticisms of globalisation

Geography no longer matters
Big firms always win
The "race to the bottom"
Globalisation is a zero-sum game

1. Geography - Ohmae argued that business is now borderless, however this perspective does have limitations, for example transport costs. If these are high, the industry is uinlikely to become global and more likely to remain local. Geography still matters also because the "clusters" mentioned in previous posts are geographically located, and can often not be found elsewhere in the world or be easily imitated.

2. Big firms always win? - SMEs are typically more flexible and have faster response times to changing environments than large organisations. They can begin to compete on economies of scale in some ways as they can now use the internet to achieve purchasing economies of scale. Many big firms become inefficient and inflexible and gradually die. Look what happened to DaimlerChrysler.

3. Race to the bottom? Worker exploitation? Widening inequalities? Using developing economies as dumping grounds for products and processes no longer acceptable in rich countries? Global firms are accused of playing off governments and workforces against each other in a battle for the lowest wages and costs - ie striving to source competive advantate from comparative advantage. It depends on point of view. Efficiency for global firms translates into exploitation by the critics of those firms.

4. Globalisation is zero-sum? This suggests that for some people to benefit from globalisation, others must lose. This may be true, but there are winners and losers on both sides. Consumers in developed economies benefit from lower costs due to outsourcing, and lowering of trade barriers. But those same countries also see "losers" because of potential outsourcing, or the decline of "traditional" industries.

Example: Agriculture, p37

Globalisatioin is reversible. Apart from the AG movement, regionalism and protectionism can prevent globalisation.

Groups of countries have formed regional trading blocs or Free Trade areas. For example the EU, NAFTA, APEC, ASEAN etc.

The formation of most of the worlds economies into trading blocs could be a significant blocker for globalisation. Regional trade is seen as incompatible with global or world trade. Trade barriers are moved outwards from individual countries to regions. Regions such as Africa are outside the main blocs and likely to remain so. India and China are likely to exist as trading blocs in their own right.