Transcript Europe in the era of globalization

Europe in the era of
globalisation
WITOLD KWAŚNICKI
Institute of Economic Sciences
Faculty of Law, Administration and Economics
Wroclaw University
http://prawo.uni.wroc.pl/~kwasnicki
An outline of a lecture
Five key debates about globalisation.
From europeanisation to globalisation.
How should we measure globalisation?
The EU and the World Trade Organisation.
European Union and the USA – a short comparative
study.
Toward The Global Free Trade Association: A New
Trade Agenda.
Europe and the causes of globalisation, 1790 to
2000.
Globalisation and convergence of national
economies.
The literature of
globalisation
(Mauro F. Guillén, 2001)
WHAT IS GLOBALISATION?
Intuitively, globalisation is a process fuelled by, and resulting
in, increasing cross-border flows of goods, services, money,
people, information, and culture.
Globalisation entails a "compression” of space and time, a
shrinking of the world.
Globalisation means increasing interdependence of national
economies in trade, finance, and macroeconomic policy.
Globalisation refers both to the compression of the world and
the intensification of consciousness of the world as a whole.
Globalisation as the diffusion of practices, values and technology
that have an influence on people’s lives worldwide.
Globalisation as a process leading to greater interdependence
and mutual awareness (reflexivity) among economic, political,
and social units in the world, and among actors in general.
Five key debates about globalisation
Is It Really Happening?
Does It Produce Convergence?
Does It Undermine the Authority of
Nation-States?
Is Globality Different from Modernity?
Is a Global Culture in the Making?
From europeanisation to globalisation
the European Union seeks to become a
power wanting to change the course of
world affairs in such a way as to benefit
not just the rich countries but also the
poorest.
Foreign Direct Investment and the European Union
(in billions of dollars)
Year
1985
European
Union Foreign
Direct
Investment
40
IntraEuropean
Union
Investment
18
Percentage of
European Foreign
Direct Investment in
Europe
45.0%
1986
59
21
35.6%
1987
81
22
27.1%
1988
104
55
52.9%
1989
122
78
63.9%
1990
121
81
66.9%
1991
109
69
63.6%
1992
98
58
59.2%
1993
112
79
65.8%
1994
143
82
57.3%
1995
158
83
52.5%
1996
142
85
59.8%
1997
183
111
60.6%
How should we measure
globalisation?
the volume of trade,
trends in total trade,
the ratio of trade to output.
Globalisation Index
A.T. Kearney and
Foreign Policy
Magazine
13 key indicators
of global
integration
the full sample of
62 countries
World Trade Organisation
Established: 1 January 1995 (but with its predecessor the General
Agreement on Tariffs and Trade (GATT) dating back to the 1940s).
Membership: 144 countries at the start of 2002, accounting for over
90% of all trade in the world.
Rounds: Countries tend to negotiate over several years on new
agreements for a group of subjects. These series of negotiations are
called ‘rounds’. Examples are the Uruguay Round 1986-94 and the
round that started in 2001 called The Doha development agenda.
Functions:
Administering WTO trade agreements
Forum for trade policy discussions and negotiations
Handling and resolving trade disputes
Monitoring national trade policies
Technical assistance and training for developing countries
Cooperation with other international organisations.
Unweighted World average tariff (35 countries, %)
(Michael A. Clemens, Jeffrey G. Williams, 2001)
Average unweighted tariff rates by region
(World Bank)
The EU and the World Trade Organisation
the world’s leading exporter of goods: over 973 billion euro in 2001,
almost a fifth of the world total;
the world’s leading exporter of services: 291 billion in euro 2000,
23.9% of the world total;
the world’s leading source of foreign direct investment (362 billion euro
in 2000) and the second largest home for foreign investment (176.2
billion euro in 2000) after the United States (304.9 billion euro)
the main export market for some 130 countries around the globe;
a relatively open economy: international trade accounted for over 14%
of its gross domestic product in 2000, compared with 12% for the
United States and 11% for Japan.
The EU and the World Trade Organisation
EU trade policy works on two complementary levels:
the multilateral level refers to the system of trading rules
agreed by all WTO member countries world-wide;
the bilateral and regional level means trade between the EU
and individual trading partners or with groups of countries that
form a single trading bloc in a particular region of the world.
The EU and the World Trade Organisation
The aims of the EU’s work in the WTO effort are:
to open up markets in goods, services and investment in
accordance with clear rules and following a timetable that
enables all countries to implement them;
to make the WTO more open, accountable and effective by
engaging in discussion with other groups and organisations;
to bring developing countries fully into the WTO’s decisiontaking processes, helping them to integrate with the world
economy.
EU trade: the big players
Trade partner
EU global trade
Imports into
the EU
(million EUR)
Exports
from
the EU
(million
EUR)
Percentage of
total trade
(imp+ exp)
1022693
935283
100
196956
230947
21.9
1.
United States
2.
Japan
85009
44697
6.6
3.
Switzerland
58186
70169
6.5
4.
China
69676
25289
4.9
5.
Norway
45543
25374
3.6
6.
Russia
44980
19763
3.3
7.
ACP Group
26333
28551
2.8
The EU and the USA – share of the world trade
Goods
Services
United States of America
20.8 %
21.2 %
EU
18.8 %
23.8 %
Candidate countries
4.1 %
3.8 %
Japan
8.8 %
8.2 %
Asia: ASEM excluding Japan
11.2 %
11.2%
Rest of the world
17.8 %
23.7 %
Latin America excluding Mexico
4.0 %
3.2 %
Canada and Mexico
9.3 %
4.9 %
The EU and the USA
Share in the World production
Inhabitants
Average growth rate
in the last 20 years
Europan
Union
USA
30.9%
30.5%
380 mln
290 mln
2.3%
3.3%
The EU and the USA – share of the world
production
26,7
30,9
11,9
30,5
EU
USA
Japan
Other countries
Free trade agreements
North American Free Trade Agreement (NAFTA;
USA, Canada and Mexico since 1994)
European Union (now 15 countries, since 1992)
Free Trade Area of Americas (FTAA; since 2005,
34 countries)
Association of Southeast Asian Nations (ASEAN)
and China (since 2010, seven countries, 1.7 mld
inhabitants)
The Global Free Trade Association
The GFTA must be a voluntary and
inclusive association, with membership
based solely on a country's
demonstrated commitment to a liberal
trading order.
The Global Free Trade Association
Each prospective member country must have demonstrated its
ability and willingness to meet specific criteria of openness to
trade, such as those employed in The Heritage
Foundation/Wall Street Journal Index of Economic Freedom,
which annually evaluates over 160 countries on 10 specific
factors.
Four of these Index factors, taken together, constitute a sound
measure of the openness of a country's markets:
1. Trade policy,
2. Capital flows and foreign investment,
3. Property rights, and
4. Regulation.
(The Heritage Foundation, 2001)
Globalisation
and growth
Globalisation
and growth
(Charles W. Calomiris, 2002)
Globalisation
and growth
(World Bank)
Europe and the causes of globalisation, 1790 to 2000
the most impressive episode of international
economic integration which the world has seen to
date was not the second half of the 20th century, but
the years between 1870 and the Great War.
capital markets became much more integrated in the
late 19th century, reaching extremely high levels of
integration in 1913; they disintegrated during the
interwar period, and are only now recovering the
levels of integration experienced in 1913
Europe and the causes of globalisation, 1790 to 2000
(Kevin H. O’Rourke, 2002)
Globalisation and convergence
(Federal Reserve Bank Of Dallas)
Long-term convergence among OECD countries
(World Bank)
The World’s ‘Convergence Club’ ca. 1850
(Steve Dowrick, J. Bradford DeLong. 2001)
The World’s ‘Convergence Club’ ca. 1900
(Steve Dowrick, J. Bradford DeLong. 2001)
The World’s ‘Convergence Club’ in the interwar period
(Steve Dowrick, J. Bradford DeLong. 2001)
The World’s ‘Convergence Club’ in the recent years
(Steve Dowrick, J. Bradford DeLong. 2001)
Future of globalisation and liberalism
(Witold Kwasnicki. 2000)