Global Systems and Global Governance

Since the 1950s trade agreements have been formed by governments joining together as trade blocs, which stimulate trade between the group of countries. Eg. EU, NAFTA, Pacific Alliance, ASEAN. 

These trading unions usually allow for free trade between members of the group where trading barriers are eliminated. 

These groups bring many advantages: 

• Improves global peace and cooperation as countries benefit economically from each other
• Improves economies as barriers to trade are removed 
• Allows growth of a global marketplace 
• The oppurtunity to develop a common currency removes issues associated with exchange rates
• Allows for sharing technology
• May help spread of democracy, human rights and political integration
• Groups have more power to negotiate on the global stage

However they can also bring disadvantages: 

• Causes loss of sovereignity, and decisions may be centralised without consideration of all countries involved 
• Presure to adopt legislation
• Could damage some sectors if they had to share resources, Eg UK shared fishing grounds with Europe. 

Shown to be effective in removing barriers to trade. Eg in 2011 the organisation for economic coooperation and development found that: 

• Deals between HICs and NEEs had experianced duty free deals rising from 68% to 87% of deals in 10 years. 
• In NEEs this had increased from 28% to 92%. 

Overall trade agreements help to globalise trade- and flows of money, people and information by providing countries with advantages to working alongside other countries. Subsequently increasing globalisation. 

Free market ideas emerged in the late 1900s with the aim of removing existing barriers to trade. Due to the increased mobility of factors of production regional trade agreements began to occur and a global framework was reinforced by the GATT (Now the WTO) who aim to lower barriers to trade. However in recent years- particularly after the finacial crash of 2008 global agreements have become more difficult to reach which has caused setbacks to international globalisation. 

Patterns of trade have changed as a result of the intenational itegration of economies. International trade is geograpically still dominated by a few major trade blocs- with the USA, Germany, Japan, UK, France, Italy and Canada contributing to 50% of global trade in 2011. However this dominance has been challenged by emerging economies with China accounting for the largest growth 

• The UN is an intergovernmental organisation created in 1945 in order to create a more peaceful world in the aftermath of WW2. 
• Made up of 193 members 
• Guides countries in maintaining peace, international security and human rights. 
• The UN has completed its work through a number of different initiatives- including the Millennium Development Goals 2002-2015, and the Sustainable Development Goals 2015-2030. 
• MDG - reduced the number of people living in extreme poverty from 1.9 billion to 836 million. Child morality rate fell by half. 2.6 million people gaining access to improved drinking water. 
• UN critisied for ignoring terrorism, and the gap between the rich and the poor increasing. 

Antartica needs to be protected as it remains one of the last remaining wildernesses on Earth. The abundance of natural resources expected in the area are becoming increasingly at risk of being exploited as new technology has made Antartica more accessable. 

Due to Antarticas position as a global commons it is important that it is protected for everyone and not exploited unsustainably by one particular state. 

Antarctica is governed by intergovernmental organisations: 

• Including : the International Whaling Commission, responsible for regulating whaling and ensuring the whale population remains at a sustainable level. In 1986 the IWC began a whaling moratorium- still in place now. However this has not caused a total pause in whaling- Iceland and Norway whale commercially (although not in the southern ocean whale sancutuary) and Japan use 'special permits' to whale for 'scientific research'. 
• The United Nations Environment Programme reports activity in Antarctica back to the UN.

The role of NGOs: 

• Do not act on behalf of a particular country- therefore observe whether countries are sticking to laws governing Antarctica, and are able to attract attention to those who are not. 
• The Antarctic and southern ocean coallition is made up of environmental groups who formed the group in order to respond to concerns that members of the Atlantic treaty were negotiating framework for mineral and gas exploitation. 
• They sucessfully campainged to make the Atlantic treaty more transparent- allowing NGOs to attend meetings. 
• Monitors environmental changes in Antartica- ensuring countries are sticking to the rules. 
• Also measures the effects of climate change on Antarctica. 

International Law: 

• The Antarctic Treaty 1959 is an agreement about how to sustainably manage Antarctica's ecosystems. 53 countries are part of this agreement. The treaty was very sucessful in overcoming territorial disputes over land. 
• The Antarctic treaty system is the way that Antarctica is governed. They hold ATS consultitive meetings annually to maintain strong relations and control activities in the continent. 
• The Madrid Protocol was created in 1991 by the UN. The main aim is to ensure environmental protection- including through inspections. 
• This treaty banned mining and helped to protect plants and animals, regulate waste disposal and prevent pollution- made an environmental impact assessment essential for any new activities. 
• However decision making and takling problems can become slow and difficult as all countries need to reach a concensus over decisions. Eg. between 2012 and 16 decsions for antarctic marine reserves failed repeatedly due to opposition from the Ukraine and Russia. 

Flows of capital 

Since the 1950s deregulation of the worlds financial markets has led to financial institutions such as banks, insurance companies and investment companies operating internationally. Flows of capital can occur as foreign direct investment, remmitance payments (currently the secont largest source or resources to low income countries with flows of $400 billion in 2013- the World Bank estimated that 40% of Somalians rely on remittance payments to meet basic needs, also accounts for 50% of GNI and 80% of investment into the country), reparation of profits, aid and migration; or through organisations such as the World Bank or IMF which are funded by developed countres and offer lower intrest or developmental loans to low income countries. 

Flows of labour 

People still cannot move around as easily as money due to immigration restrictions. Flows of economic migrants increases global interconnectedness as people transfer culture. International migration increased by 40% between 2000-2015. 

Flow of products 

International movement of products has been made easier due to the reduction of costs of trading these have reduced due to; transaction costs being lower due to improving flows of data and the ease at which capital can be transferred between different locations, transport costs and time for transport have reduced by using containerism which has enabled long and complex flows of products. Protectionist measures such as tarriffs have been discouraged by the WTO. Manufacturing has also decreased in HICs while increased in LICs this is largely due to lower labour costs abroad. 

Flows of services 

High level services (such as finance) are more highly concentrated in HICs whereas low level services (such as customer service positions) often this has occured as businesses decentralise low level services into the developing world in order to take advantage of lower costs. 

Flows of information 

Increased due to migration, and the speed of data and communication transfers. Transformed by didgitalisation and new satelite technology, help expand global market of knowledge intensive goods- such as IT and pharmacuticals 

Global marketing 

When a company becomes a global marketer it sees the globe as a single market and creates products to fit regional marketplaces. The ultimate goal is to sell the same product in the same way all over the world- eg Coca-cola. 

Changing patterns 

• Globalisation has led to a new international divison of labour, this division in the labour pool has undergone major changes in the last 40 years as nations have developed, with many newly emerging economies developing their own industrial and commercial bases. 
• In 1954 95% of production was concentrated in western developed countries- and goods consumed in the country of origin. 
• TNCs decentralised production into deveping nations as foriegn direct investment which meant production costs were now made more competitive
• Now more than 50% of manufacturing jobs are in the developing world, 60% of exports from developing countries are manufactured goods
• Most consumption lies in developed countries- however now a trend of a more affluent pop in NEEs will change consumption trends 

Finance 

• In the past trade was slowed by issues with exchanging money and concerns with exchange rates. 
• Now the deregualation of finacial markets allowed arrangements for the relaxation of financial barriers to the movement of finance. 
• IT and communications technology has also made international trading easier and faster. 

Transport 

• Products can be shipped more easily as a result of:
  • Larger planes
  • Growth in low cost airlines and air frieght companies
  • The use of standardised shipping containers (200mill container movements a year)
  • Better handling and distribution
  • High speed rail networks

Security 

• Trading faces threats such as: supply chain security, anti-terrorism, food security, anti-smuggling.
• Initiatives such as the World Customs Organisation, EU secure operator quality label 
• Due to globalisation countries can work together to alleviate security threats- eg NATO
• Trade agreements increase dependance so trade makes war less likely- however in some situations developed countries have intervened in conflicts to secure resources

Communications, management and information systems 

• Disconnected states: limits on citizens access to cross border flows of information- eg 'great firewall of China' but citizens can still talk freely nation wide. Disconnected citizens- eg in North Korea where access to the internet is extremely restricted and therefore citizens cannot speak ditgitally in their own countries
• Global value chains mean that different stages of the production system occur in different countries 
• More access to economies of scale and didgital management