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Geography - The United States of America Leader of Globalization [CA v2.4] Summary Introduction.........................................................................................................2 1. The USA: Pushing for Free Trade Agreements.................................................2 1.1.1. The United States is the world's second largest trading nation.........2 1.1.2. Free Trade and Neoliberalism............................................................4 1.1.3. Implementing Free Trade: the World Trade Organization (WTO) and the Free Trade Agreements (FTAs)..............................................................5 1.1.4. The North American Free Trade Agreement (NAFTA, January 1, 1994):...........................................................................................................7 2. The USA: Financial Nexus of the World...........................................................8 3. The USA and Cultural Exchanges: World Culture or Americanization?..........14
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Introduction Globalization: the process through which an increasingly free flow of ideas, people, goods, services, and capital leads to the integration of economies and societies. As the world one and only superpower (GDP was estimated to be $17.1 trillion in December 2013, approximately a quarter of nominal global GDP), the United States is the leader of the globalization process.
1. The USA: Pushing for Free Trade Agreements 1.1.1. The United States is the world's second largest trading nation In 2013, U.S. exports amounted to $2.27 trillion and imports amounted to $2.74 trillion.
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Flow map of US imports and exports to its top 15 trade partners, 2012
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1) A Regional Partnership: two main trading partners are Canada and Mexico (in fact there is a common market with the USA). 2) Asia: China (PRC), Japan, South-Korea. Trade imbalance: big trade gap (especially with China). The commercial balance: is the difference between the monetary value of exports and imports of output in an economy. 3) Trading mainly with other developed countries: UK, Germany, France 4) Some leader of emerging countries (BRICS): India, Brazil 5) Oil Exporters: Saudi Arabia, Mexico, Canada, Venezuela
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1.1.2.
Free Trade and Neoliberalism
It simply refers to a lack of trade barriers between participating nations. Trade barriers typically mean tariffs, either to protect domestic manufacturers or to raise revenue. Free Trade is a part of the Neoliberal ideology.
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1.1.3. Implementing Free Trade: the World Trade Organization (WTO) and the Free Trade Agreements (FTAs) •
In 1993, 117 nations agreed to create the World Trade Organization (WTO). The WTO seeks discusses ways to end trade restrictions and settle trade disputes. The USA is a member of the WTO.
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The United States is also party to many free trade agreements (FTAs):
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The United States Current Bilateral/Multilateral FTA's Proposed/Suspended Bilateral/Multilateral FTA's (2008. src)
(2010. src)
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1.1.4. The North American Free Trade Agreement (NAFTA, January 1, 1994):
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NAFTA is an agreement signed by Canada, Mexico, and the United States, creating a trade bloc in North America. U.S. trade with its North American partners grew 156 percent in 20 years.
2. The USA: Financial Nexus of the World •
The fact that the dollar is the main reserve currency, and the stability of the US economy, have made the U.S. Fed (Federal Reserve) the ultimate arbiter of international interest rates and investment flows.
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(src) •
Wall Street is the financial district of New York City, Lower Manhattan.
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Wall Street is the home of the New York Stock Exchange (NYSE). It is by far the world's largest stock exchange by market capitalization of its listed companies at US$16.6 trillion as of May 2013.
• (Data: 2010 http://www.zyen.com/GFCI/GFCI%208.pdf ; src)
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Illustration 1: Deutsch, Barry, Government To The Rescue!, October 9th, 2011 (Political Cartoon) [Source: http://leftycartoons.com/government-to-the-rescue/] • • • • • •
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Bail out: [fr. sauvetage, renflouement] to help (a person, organization, etc.) out of a predicament. Collapse (to): to break down or fall down from lack of strength. Foreclosure: [fr. saisie] Greedy: excessively desirous of wealth, esp. in large amounts Loan: [fr. prêt] the act of lending. Mortgage: [fr. prêt hypothécaire] an agreement under which a person borrows money to buy property, esp. a house, and the lender may take possession of the property if the borrower fails to repay the money. Rescue: to bring (someone or something) out of danger, harm... Shovel: an instrument for lifting loose material, such as earth, coal... Subprime mortgage: [fr. prêt hypothécaire à haut risque] Undermine (to): to wear away the bottom or base of, to weaken
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insidiously. 1, From the subprime crisis to the economic crisis • The percentage of lower-quality subprime mortgages originated during a given year rose from the historical 8% or lower range to approximately 20% from 2004 to 2006. The mortgage-backed securities offered attractive rates of return due to the higher interest rates on the subprime mortgages (“Greedy Banker”). • When U.S. home prices declined steeply after peaking in mid-2006, it became more difficult for borrowers to refinance their loans. From September 2008 to September 2012, there were approximately 4 million completed foreclosures in the U.S. • Investment bank Lehman Brothers went bankrupt in September 2008. The International Monetary Fund estimated that large U.S. and European banks lost more than $1 trillion on toxic assets and from bad loans from January 2007 to September 2009. • So this subprime crisis beget a banking crisis and finally an economic crisis (“Undermining...”). • Economic crisis: U.S. real gross domestic product (GDP) began contracting (“Collapse”). The unemployment rate rose from 5% in 2008 to 10% by late 2009. 2. Too Big to Fail: Government rescuing Banks • TARP bailout... • Hollywoodian Mockery: “G” (Government) is a caped avenger like Superman. “My hero!”: it's like the romantic end of an old adventure movie with the sex symbol and his sweetheart => crony capitalism [fr. capitalisme de connivence] 3. The Banker: the New Face of Evil
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Illustration 2: by Barry Ritholtz - January 15th, 2013 [Lizards of Wall Street] Other examples: investors ; corporate America
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Occupy Wall Street (OWS) is the name given to a protest movement that began on September 2011, in Zuccotti Park, located in New York City's Wall Street financial district. The main issues raised by OWS were social and economic inequality, greed, corruption and the perceived undue influence of corporations on government—particularly from the financial services sector. The OWS slogan, We are the 99%, refers to income inequality and wealth distribution in the U.S. between the wealthiest 1% and the rest of the population. The protesters were forced out of Zuccotti Park on November 2011.
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3. The USA and Cultural Culture or Americanization?
Exchanges:
World
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Cultural globalization is the rapid movement of ideas, attitudes, and values across national borders.
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The term "globalization" came to be widely used in the 1980s, but as early as the 1960s, the Canadian literary critic Marshall McLuhan popularized the term "global village" to describe the effect that the ability to connect and exchange ideas instantaneously would bring to the world.
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As technology has accelerated the process, it has sparked considerable controversy.
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(src)
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Cash Register: [fr. caisse enregistreuse] a mechanism for displaying and adding the amounts of cash received in individual sales.
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Franchise: authorization granted by a manufacturing enterprise to a distributor to market the manufacturer's products.
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Franchise Manager: [fr. directeur d'une franchise]
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Outlet: a commercial establishment retailing the goods of a particular producer or wholesaler.
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Purchasing Power Parity: [fr. parité de pouvoir d'achat]
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1 square foot = 0.093 square metres (or meters: American Spelling)
Q1) Why some countries are without any McDonald restaurant? Q2) Explain McDonald's outlets world repartition. Q3) Why the different national prices of a global product (burger)? Least advanced country = no McDonald. •
Some anomalies:
Iceland (2008 financial crisis: closure of the two restaurants) ; North Korea: communist
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The United States has long sought globalization through communication. It established the Voice of America (VOA) radio network during the Cold War (as an anti-Communist measure), but it continues in operation today. The U.S. State Department also sponsors a multitude of cultural exchange programs.
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The major film studios of Hollywood (California) are the primary source of the most commercially successful movies in the world, such as Gone with the Wind (1939), Star Wars (1977), Titanic (1997), Avatar (2009)...
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U.S. Multinational Corporations (Apple, Nike, Disney, McDonald...) are leading the globalization process:
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(src) Baseball cap: [fr. casquette de base- Peaked cap: [fr. casquette à visière] ball] Strappy sandal: [fr. sandale à lanières] Dinner: [fr. dîner] Suitcase: [fr. valise] Neat: [fr. soigné, joli]
