Why Is Globalization So Controversial?The World Trade Organization

WTO

Unit Essential Question

How does the distribution of resources, political stability, national efforts to encourage or discourage trade, and the flow of investment influence patterns of international trade?

Delaware Standard

Economics 4 International Trade Students will analyze and interpret the

influence of the distribution of the world’s resources, political stability, national efforts to encourage or discourage trade, and the flow of investment on patterns of international trade.

Globalization is driven by an increasingly interdependent and international economic system. Few recent issues have generated more debate and public protest than globalization.

Globalization & WTO

Opponents see globalization as unfair trade practices that benefit large corporations and rich nations but lead to poverty, inequality, loss of local culture and environmental damage.

Globalization & WTO

Supporters argue that removing trade barriers lowers prices and gives consumers more choice. This then promotes economic growth and investment which raises income levels and standards of living in all countries.

Essential Question

Why might there be different opinions about international trade?

Concepts

Economic institutions Barriers to trade Voluntary exchange Specialization Factor endowments Gains from trade

Objectives Identify who benefits and who loses from

trade barriers Explain why the US no longer has a

comparative advantage in production of some products it once exported

Identify and discuss major arguments for and against globalization

Economic Principles Voluntary exchange gives people a broader

range of choices International trade promotes specialization

and division of labor and increases output and consumption

Economic conditions and policies in one nation affect conditions and policies in others

International trade occurs because of differences in availability of resources and prices

The WTO Protests: Seattle, 1999

Who – union organizers, environmentalists, animal rights activists, and senior citizens protested during a World Trade Organization (WTO) meeting

What – attempt by protesters to shut down the WTO meeting by blocking major roads, breaking windows of major downtown businesses, engaging police, seek media attention

When – November 30 – December 2, 1999

Where – downtown Seattle, Washington

Why – protesters believed that WTO policies promoting greater free trade were bad for the environment, increased world poverty, and only made large corporations wealthy.

The WTO Protests: Seattle, 1999

So who is right? Protesters believe that the WTO policies

are bad for the environment, increase world poverty, and only make large corporations wealthy.

Supporters believe that free trade improves living standards around the world, which in turn leads to increased human rights, literacy rates, and even life expectancies

What do economists think? According to Paul Solman, Milton Friedman

once said at an economics convention:

"Nine of 10 economists here would support

trade; at most one would not…”

http://www.pbs.org/newshour/rundown/2012/11/an-economist-argues-the-virtues-of-free-trade.html

In general…

The overall benefits of free trade to the market in general outweigh the costs of free trade to any individuals

But not everyone agrees!

The fact is it’s very hard to measure

Can the disagreement ever be resolved?

Might we have more riots like in Seattle?

Should we allow free trade?

Assignment: Protest Poster – Globalization / WTO Working with a Partner or on your own

create a poster that represents (pick one: Supporter or Opponent of Globalization / WTO. Choose an interesting slogan At least 2 images (draw or cut out of

magazines) 4 bullet point arguments used to support

your side of debate Use summary sheet provided, reflect on

video clips and notes on WTO