fair trade: social movement – improve conditions of direct producers in third world (raw...

• Fair Trade:• Social Movement – improve conditions of

direct producers in Third World (raw materials, agricultural goods) 1960s Europe

• Less that 1/100 of 1% of world trade• Critique – a form of subsidy?• does not challenge structure of trading

system

• Structure of International Trade

• Between Developed Countries

• Prices of manufactures goods higher than prices of agricultural goods

• Structural asymmetry between North and South

Transnational Production

• International Division of Labor

• Core, Periphery, Semi periphery

• Skilled/Unskilled

• New International Division of Labor

• Post-Fordist, flexible accumulation

• Service economy

• Manufacturing – offshore

• Raymond-Vernon, Product Life Cycle

• Innovation, high cost, R and D, technology

• Innovate in capital/knowledge intensive area - monopoly

• Technological diffusion- importing countries produce product cheaply

• Competition increase

• Cost of production – Variable Cost - labor

• Move production off shore

• Economies of scale

• Cheaper wages

• Transnational Corporation – 500 largest in the world in the world 170-US 70 Japan, 38 France, 38 UK

• Automobiles, computers

• Wal-Mart Retail 1.8 million employees

• Portfolio investment (only financial resources)

• Foreign Direct Investment (FDI)

• 1950s and 1960s

• Horizontal integration of TNC – produce same product in many different countries

• Toyota produces cars in US and Japan

• Vertical integration – British Petroleum

Critical theory

• Susan Strange - costs of transportation, communication, new financial instruments, new technologies

• Oligopolistic structure of global capital

• Effects of TNCs on Host Countries?

• Entrepreneurship

• New management styles

• Work cultures , competition

• Critique;

• Local business culture

• Market concentration

• HIGH VALUE ADDED IMPORTED

• Low-skill manufacture in offshore

• Multiplier effect not possible in host country