GLOBALIZATION
- forcing competition
- opportunities for small companies
- sustainable development
- worldwide protests against globalization
- growing power of MNCs
- OECD Guidelines for MNCs
- specific consequences
- globalization and the environment

last updated (2007 April 19th - took out the material on sustainable development and made it into a separate unit)
see witiger.com/internationalbusiness/globalizationSustainableDevelopment.htm
 
 
OBJECTIVES After reading this online unit, and attending the lecture, the student will 
   o be able to define what globalization means in the context of int'l business
   o understand the effects of globalization in terms of corporate competitiveness
   o be able to define U.S. and Canadian differences in opinion on the issue of globalization
   o know some of the positions that entities have on the "pro" and "con" side 
   o be aware of some of opportunities, and challenges, facing SMEs dealing with globalization
   o be able to explain how globalization effects sustainable development
   o be aware of some of the issues in the worldwide protests for, and against globalization
   o be able to explain how globalization effects social justice in some effected regions
   o understand how the global activities of large companies may effect national sovereignty 
   o know some specific examples of the effect of globalization on int'l business in Canada

WTGR

INTRODUCTION

GLOBALIZATION

2007

"The great challenge facing political leaders today is to persuade the public that continuing to liberalize trade will bring more benefits than costs. Distrust of globalization has probably never been higher in the past 60 years....China and India are among the reasons. There is widespread fear that globalization means job losses and lower wages as the export power of these huge nations grows. 
So countries are becoming more protectionist, more unwilling to deal with change and make adjustments."

David Crane
well known economics and int'l trade journalist for The Toronto Star    2006 Dec 31

The debate over the positive and negative effects of globalization is a hot topic for many individuals, agencies, organizations and government departments who find themselves in a position to defend or attack the current globalization trends. We can have an interesting debate in class about the merits of globalization but in the end whether we like it or not, it is a situation within which we, as international business people, have to deal with successfully.
WTGR

Definition of Globalization

  o  People around the globe are more connected to each other than ever before.
  o  Information and money flow more quickly than ever.
  o  Goods and services produced in one part of the world are increasingly available in all parts of the world.
  o  International travel is more frequent.
  o  International communication is commonplace.
This phenomenon has been titled "globalization."
From Keith Porter http://globalization.about.com/cs/whatisit/a/whatisit.htm

The term “globalization” describes the increased mobility of goods, services, labour, technology and capital throughout the world.
 http://www.canadianeconomy.gc.ca/English/economy/globalization.html

"Globalization is a term for the horizontal and vertical integration of manufacturing and trade on an international level"
www.endgame.org/gtt-globalization.html
 
Globalization, an example in the forest products industry

There are positive and negative aspects of Globalization. Some people who champion the negative aspects are very intense in their efforts to persuade others to see their point of view.
www.endgame.org discusses the downside of competition cause by globalization.

The vertical integration of the wood products industry "is probably the single most recognized characteristic of the industry" -- for example, most paper sales are by corporations which also control timberland. Now the horizontal integration of the industry is also being completed, as corporations like International Paper spread their operations to dozens of countries."
www.endgame.org/gtt-globalization.html

You should read this [www.endgame.org/gtt-globalization.html]to have an understanding of one specific circumstance of globalization. The site also gets into the negative aspects of globalization and cites examples of how the forest products industry has suffered historically, even back to ancient times.

The reason why we mention the forest products industry in a Canadian course on International Business is because it was the rich forests of Canada which was one of the biggest incentives for European explorers to investigate the waterways of our country as a way to ship back load after load of logs to Europe for the French and British navy.

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Forestry trade

Deforestation

Globalization

"The effects of deforestation have been known since ancient times. Empires from Roman to colonial times have expanded to acquire wood supplies for shipbuilding and fuel for industry, and have collapsed when those wood supplies were depleted. The post-World War II ascendancy of U.S. timber corporations has brought the industry to new heights, and promises to take it to new lows as well. The global timber industry has tried to escape the ecological limits to raw materials, and the social and economic limits to markets, by relying on frontiers. While multinational timber corporations use the rhetoric of sustainability and jobs, the centuries-old reality of cut and run continues. Despite the public relations strategies of the corporations, timber industry overcutting has been confirmed by numerous industry, academic, and government studies. Now that the end of the forest frontier is being reached, free trade agreements are threatening to remove the last barriers to total industrialization and depletion." 

by George Draffan, Public Information Network, Seattle
permission to quote Draffan received in an email  Oct 11th, 2002. Copies of emails kept in the permissions binder

."Globalization forces everyone to compete with the cheapest producers."

Is this a good thing or a bad thing?

"In the early 1990s, bleached hardwood pulp cost

 - therefore the cutting down of the rainforest in Brazil !
by George Draffan, Public Information Network, Seattle
Globalization
is good !!

 

from the front page of the National Post, July 9th, 2002

"Globalization Cures Poverty: Study"
is the title of a story by Jan Cienski which cites that "Free markets credited with reducing misery - yet the  gap between rich and poor widens"

Cienski says "Many globalization critics are "poorly informed about the historical record, and appear not to be aware of the contribution played by  globalization in the struggle against poverty," the study's authors say."

Cienski makes the interesting point that "Improved communications has had the perverse effect of undermining  the case for globalization because "the poor that remain, though a shrinking proportion of the whole population, are more than ever aware  of their relative deprivation."

 .
 
Globalization
is good !!
the study, referred to in the Cienski article,  was by the London-based 
Centre for  Economic Policy  Research.
Instead of relying on the Canadian newspaprs interpretation, we can use the resources of the Internet to go direct to the CEPR webpage and get direct information about this globalization study

the CEPR has a press release on their study  released in July 2002 and you can read it at www.cepr.org/press/PP8.htm

Globalization
is good !!
 
 
 
 
 
 
 
 
 
 
 
 
 

Globalization
is good !!

" the authors of the new CEPR Report find that  many of the charges levelled against globalization are misguided:" - they list several points on their website which deserve reading.
  • "There is a wealth of economic evidence that demonstrates that globalization brings great benefits as well as costs. It offers the opportunity for a higher rate of  sustainable growth - growth that translates into longer, healthier lives and improved living standards. 
  • On average, economic growth is good for the poor, and  trade is good for growth. Trade is also associated with  lower inflation and less corruption. A significant degree of  openness to trade, financial liberalization, and global   financial integration are necessary conditions for  sustained economic growth.
  • The increasing integration of the world's economies does not inevitably increase the inequality of incomes. The 19th century saw an explosion of inequality but by the  middle of the 20th century it had stopped rising. The  proportion of the world's population in absolute poverty is now lower than it has ever been. The number of those  living on less than 1$ a day, adjusted for inflation, has  declined from around half in 1950 to less than a quarter in 1992.
  • Many of the apparent costs of globalization reflect domestic policy failures, to the extent that they would be better tackled through domestic policy reform than  through seeking to halt the forces driving globalization.

  • There is little evidence that governments are losing power  to multinational corporations or that there is 'a race to the bottom' in environmental standards or taxation."
 ..
Globalization
is good !!
David Crane explained in a Dec 2006 article titled
"Don't discount the positive side of globalization"

"Canada's clothing industry provides a good example of the trade-off that comes when a country lowers its trade barriers as Canada has done with clothing. According to Statistics Canada, production by Canada's clothing industry fell from $7.9 billion in 2000 to $5 billion in 2005, a 37 per cent decline. Employment fell by 34,000 to 60,000, a 36 per cent fall in the number of clothing industry jobs.

About 70 per cent of this decline was due to a loss of share in the Canadian market to imports from China, Bangladesh, India, Mexico and other developing countries, while 30 per cent of the decline was due to a fall in exports to the U.S. as developing countries displaced Canadian shipments.

So trade liberalization has meant a loss of jobs and output in Canada's clothing industry, though the Canadian companies that have survived have become more innovative and productive. But it has also meant cheaper clothing for Canadians. This matters, especially to low-income families and seniors living on fixed incomes. "

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Globalization and SME's

"Globalization and the  Internet have created  unprecedented opportunities for small and medium-sized  businesses in Canada"
is the title of a Sept 2002 story by Lopez-Pacheco
asc
KEY
POINTS
There are a lot of stories in some media that discuss how Globalization is challenging [read difficult and painful] for small and medium sized enterprises because they are being forced by the competitive environment to sell product and services to their customers, at lower prices ; cause - if they don't, some vendor in another part of the world will steal away their customers. However with every challenge, there are also opportunities - in some situations, the consequences of globalization can be a benefit for SME's cause the "shrinking world" [ facilitated by the developments in the technological environment] can bring more opportunities to SME's that previously they could not deal with. Therefore we have included in this section on Globalization a story from the National Post about how "Globalization and the  Internet have created  unprecedented opportunities for small and medium-sized  businesses in Canada".
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National Post, September 23, 2002 by Alexandra Lopez-Pacheco

The key thing about this story is that one of the ways small and medium sized companies are dealing with opportunities afforded by globalization is to be bigger companies !!! - and this can be affected through using strategic alliances.

"Globalization and the Internet have created unprecedented opportunities for small and medium-sized businesses in Canada -- an environment where competition is fierce. To take advantage of these opportunities, while avoiding some of the competitive obstacles often faced by the little fish in the big ocean, many of  these businesses are forming partnerships or, more precisely, strategic alliances. "There are various advantages to forming strategic alliances," says Estelle Metayer, president of Montreal-based Competia Inc., a leading competitive intelligence and strategic planning company and publisher of  Competia Online.  "One is the ability to penetrate markets that would be too costly to develop on your own. For example, if you form an alliance with an American partner who can take on your products and distribute them through their network, you could  save a lot of money on the marketing side." Another big advantage  comes from joining forces with a business that can provide your enterprise  with access to expensive  technology you might not  be able to afford otherwise. Management-based  strategic alliances are also             advantageous, Ms. Metayer says. "Often, smaller companies don't have big management teams. So if they need someone who has a certain expertise, but they really can't afford to hire such a person, then they can form an alliance  with a company that has that management expertise."

"Strategic alliances also benefit the big companies. "With large corporations, one of the problems often is the inability to move quickly, because of bureaucracy and more complicated internal politics. Smaller companies are able to react more quickly to changes in the marketplace. So from both parties' perspectives, it serves their needs," he says.  Although the concept of a strategic alliance can sound so appealing to a struggling small business that they might be tempted to run out and get one, experts warn businesses should not rush into partnerships, especially if  another company comes courting."
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Globalization, the development of strong, and sustained protests worldwide
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KEY
POINTS
By mentioning the worldwide growing protests movement against aspects of globalization, we are not endorsing the violence by which the protestors are conveying their message - we are recognizing that it has become an issue and some consequences are effecting international business management.

The screen capture below comes from a newspaper article following the G8 Summit in Genoa in July 2001 - which was a particular noteworthy event due to the large organized scale of the anti-globalization forces, and the fact the police countered with lethal force.
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"This is the anti-globalization movement. Sprawling, disparate, powerful. A political force unto itself that, given its international  scope and staggering number of  participants, is unprecedented in history. And, it would appear, at a significant  crossroads."
Vinay Menon
Menon makes reference to Seattle, saying that "... Seattle, where approximately 60,000 protesters from all political, social and environmental persuasions managed to  shut down a meeting of the World Trade Organization.  Once perceived as staid centres of international bureaucracy, the WTO, as  well as the World Bank and International Monetary Fund (IMF), are now targets of anti-globalization activists, who regard these institutions as murky  cabals - unaccountable, undemocratic and unwitting facilitators of the corporate  agenda."

Menon, noting comments from Ronald Deibert, a political science professor at the University of Toronto, says that "....another challenge anti-globalization protesters face: Many members of the public can't grasp the abstract, socio-economic principles upon which the movement is based. So critics start dismissing groups as "militant radicals," "Yuppie freaks," "Hippie wannabes," "flat-Earth advocates," "neo-Marxists," "neo-Luddites" and "anti-capitalist pipe dreamers."

Even the term "anti-globalization movement" is misleading. There is no formal structure, no hierarchy. No one leader. No one platform. For some, there isn't  even an "anti" - they believe it's not a question of "if we globalize," but how. There are, instead, widely different groups, with widely different agendas. And  these groups will only get bigger and more effective".
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Globalization, social justice issues - commentary by David Crane - Article 1
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KEY
POINTS
Whether or not one agrees with the "social justice issues" being evangelized by some special interest groups - it must be aknowledged that these opinions are increasingly being expressed in many circles and it would be responsible for us to review what these people are trying to communicate.
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http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_PrintFriendly&c=Article&cid=1006211060939 David Crane writing in The Star
2001 Nov 20th
"Globalization can't ignore social justice"

Crane's article refers, in part, to the G-20 meetings in Ottawa in mid-November 2001

Crane quotes some of the key figures at the event.

"As Gordon Brown, Britain's chancellor of the exchequer and chairman of the IMF and World Bank weekend meetings, said, "The real issue is not whether you are  for or against globalization, because globalization is moving forward. The real issue is whether you are for or against social justice on a global scale, and I  believe there is an increasing recognition that we have to work together to make the world and the global economy a better place for the world's poor."  According to World Bank president James Wolfensohn, "in the next 30 years, the population of the world will increase from 6 to 8 billion, and virtually all of those 2 billion additional people will live in the developing world. The sooner we are able to grasp the implications of this, the better."

Crane further quotes Wolfensohn adding ""Some form of globalization is with us to stay," Wolfensohn said. "But the kind of globalization is not yet certain: it can be either a globalization of development and poverty reduction - such as we have begun to see in recent decades, although this trend still cannot be taken for granted - or a globalization of conflict, poverty, disease, and inequality." Our huge task is to tip the scales toward good globalization."
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KEY
POINTS
So, one of the reasons we discuss globalization and social justice issues is that it relates to issues of stability or instability which in turn are part of the concerns about risk and threat situations for international business in developing economies..
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Globalization, social justice issues - commentary by David Crane - Article 2
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http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_PrintFriendly&c=Article&cid=1006211060939 David Crane writing in The Star
2003 Feb 9th
"Putting a human face on Globalization"
Crane's article refers, the OECD - which we discuss in this course + the Canadian Federal Government web site of Canada's National Contact Point for the  OECD Guidelines for Multinational Enterprises   www.ncp-pcn.gc.ca/menu-en.asp
 
click to see where Zambia is on the map of Africa
click to see Zambia
Crane writes "When a group of Zambian farmers faced eviction by a Canadian mining company  from lands they were using, they were able to get help in Canada. They were able to remain on the land for some further time as a result of a code of responsible  corporate behaviour developed by the Organization for Economic Co-operation and Development in Paris. The guidelines for multinational enterprises were adopted by the OECD in 2000, and since then have become an important way of holding multinational corporations  to a set of core standards of behaviour."
 " In the process, they have provided companies operating internationally with a set of standards that lets hem know how they should perform.  In the case of the Zambian farmers, they were able to enlist the help of Oxfam Canada, which went to Canada's National Contact Point for the guidelines — each OECD country has to maintain such a contact point where complaints can be  raised — and a dialogue was launched. The TSE-listed company, First Quantum Minerals Ltd. of Vancouver, agreed to allow the Zambian farmers to stay on the land, though not permanently."
 
 www.oecd.org
click to see get to OECD site
from the OECD site 
"The OECD Guidelines for Multinational Enterprises are non-binding  recommendations to enterprises, made by the thirty-seven  governments that adhere to them. Their aim is to help Multinational Enterprises (MNEs) operate in harmony with government policies and with societal expectations."

Crane explains that "The guidelines, which can be found at http://www.ncp-pcn.gc.ca, cover corporate disclosure, employment and industrial relations, the environment, bribery, consumer protection, science and technology, competition, and taxation. They   represent not a bad summary of what should be standard corporate citizenship and  ideally would be taught to all MBA students."

Crane also adds that "the [OECD] guidelines are of value to the International Monetary Fund and the  World Bank in their own dealings with developing countries and international corporations." The point being that companies in contravention of the guidelines cannot be participants in IMF and World Bank projects.
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KEY
POINTS
Crane's article is helpful because it ties in Globalization with social justice issues in a real context, and also shows the links to OECD, IMF and World Bank issues.
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Globalization, social justice issues - commentary by David Crane - Article 3
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http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_PrintFriendly&c=Article&cid=1006211060939 David Crane writing in The Star
2004 Feb 25th
"Globalization is not the Enemy"

Crane's article refers to an article written by John Saul - husband of the Governor General. In this article, Saul suggests Globalization is bad and Crane counters by explaining that Saul's interpretation is flawed.

Crane argues "Saul's thesis is that globalization is essentially dead, and deserves to be dead because it has been nothing more than an assault on society and the environment  by narrow corporate interests. If that were true, then he would have a case. But of course globalization is much more  complicated than Saul's gross oversimplification.  For him [Saul], globalization is a world in which global markets leave the nation-state powerless to look after the needs of  its citizens.

But there are many concepts of globalization. And while there are some who argue and even advocate the end of the nation-state, more serious discussion of globalization is about how we can create a more prosperous global community, with fairer sharing of the wealth, while sustaining the environmental health of the planet, thwarting international crime and terrorism, and doing all of this in a way that takes into account the views and concerns of people everywhere.

The fundamental problem is that Saul does not seem to understand what globalization is really about. His quarrel  should be with neoconservatism and market fundamentalism, not globalization. It is the neoconservatives, the market fundamentalists that have done damage, and they have done it both at the global level and within the nation-state.  The challenge we face is to sustain globalization in a more human form, not to promote its collapse. More than ever  we will need stronger global rules and institutions if we are to have a stable world in which population could increase  50 per cent by the middle part of this century. We will also need more international trade and investment if the  world's poor are to be lifted out of poverty."
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Globalization, international companies growing more powerful than some countries
- The top economies compared to the top companies
.
KEY
POINTS
Accompanying the article by Menon, was a chart showing the top 100 economies in the world. The interesting thing about this chart was that they allowed individual companies to also be measured so that you could see how some transnational corporations have grown to have business which rivals the GDP of countries. 
The idea for this chart comes from an article in Fortune magazine in July 2000. The article in Fortune in turn was derived from statistics gathered by World Bank, World Development Report 2000.
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Top 100 Economies (1999) versus Annual Sales of leading companies
(Corporations in bold)
  Country/Corporation GDP/sales
($mil)
  Country/Corporation GDP/sales
($mil)
1 United States 8,708,870.0 51 Colombia 88,596.0
2 Japan 4,395,083.0 52 AXA 87,645.7
3 Germany 2,081,202.0 53 IBM 87,548.0
4 France 1,410,262.0 54 Singapore 84,945.0
5 United Kingdom 1,373,612.0 55 Ireland 84,861.0
6 Italy 1,149,958.0 56 BP Amoco 83,556.0
7 China 1,149,814.0 57 Citigroup 82,005.0
8 Brazil 760,345.0 58 Volkswagen 80,072.7
9 Canada 612,049.0 59 Nippon Life Insurance 78,515.1
10 Spain 562,245.0 60 Philippines 75,350.0
11 Mexico 474,951.0 61 Siemens 75,337.0
12 India 459,765.0 62 Malaysia 74,634.0
13 Korea, Rep. 406,940.0 63 Allianz 74,178.2
14 Australia 389,691.0 64 Hitachi 71,858.5
15 Netherlands 384,766.0 65 Chile 71,092.0
16 Russian Federation 375,345.0 66 Matsushita Electric Ind. 65,555.6
17 Argentina 281,942.0 67 Nissho Iwai 65,393.2
18 Switzerland 260,299.0 68 ING Group 62,492.4
19 Belgium 245,706.0 69 AT&T 62,391.0
20 Sweden 226,388.0 70 Philip Morris 61,751.0
21 Austria 208,949.0 71 Sony 60,052.7
22 Turkey 188,374.0 72 Pakistan 59,880.0
23 General Motors 176,558.0 73 Deutsche Bank 58,585.1
24 Denmark 174,363.0 74 Boeing 57,993.0
25 Wal-Mart 166,809.0 75 Peru 57,318.0
26 Exxon Mobil 163,881.0 76 Czech Republic 56.379.0
27 Ford Motor 162,558.0 77 Dai-Ichi Mutual Life Ins. 55,104.7
28 Daimler Chrysler 159,985.7 78 Honda Motor 54,773.5
29 Poland 154,146.0 79 Assicurezioni Generali 53,723.2
30 Norway 145,449.0 80 Nissan Motor 53,679.9
31 Indonesia 140,964.0 81 New Zealand 53,622.0
32 South Africa 131,127.0 82 E.On 52,227.7
33 Saudi Arabia 128,892.0 83 Toshiba 51,634.9
34 Finland 126,130.0 84 Bank of America 51,392.0
35 Greece 123,934.0 85 Fiat 51,331.7
36 Thailand 123,887.0 86 Nestlé 49,694.1
37 Mitsui 118,555.2 87 SBC Communications 49,489.0
38 Mitsubishi 117,765.6 88 Credit Suisse 49,362.0
39 Toyota Motor 115,670.9 89 Hungary 48,355.0
40 General Electric 111,630.0 90 Hewlett-Packard 48,253.0
41 Itochu 109,068.9 91 Fujitsu 47,195.9
42 Portugal 107,716.0 92 Algeria 47,015.0
43 Royal Dutch/Shell 105,366.0 93 Metro 46,663.6
44 Venezuala 103,918.0 94 Sumitomo Life Insur. 46,445.1
45 Iran, Islamic Rep. 101,073.0 95 Bangladesh 45,779.0
46 Israel 99,068.0 96 Tokyo Electric Power 45,727.7
47 Sumitomo 95,701.6 97 Kroger 45,351.6
48 Nippon Tel & Tel 93,591.7 98 Total Fina Elf 44,990.3
49 Egypt, Arab Republic 92,413.0 99 NEC 44,828.0
50 Marubeni 91,907.4 100 State Farm Insurance 44,637.2
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Globalization, international companies growing more powerful than some countries
- How the actions of a large company can effect the sovereignty of a country

To demonstrate the power that a large company can have over a medium sized country, we searched the newspapers for a story reflecting how a transnational corporation may deal with a contentious issue that negatively effects the sovereignty of a country.
..gn. sfn
This Oct 2003 story tells how Ford is planning to cut jobs at a plant in a European country. The President of that country has met with Ford officials but the cuts are going to take place anyway.

Belgium is upset that they previously gave concessions to Ford in order that Ford would do business in the country and employee lots of people, but this has not been reciprocated as much as Belgium would have liked.

WTGR

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Globalization and poverty
http://www.worldbank.org/poverty/wdrpoverty/index.htm
contact was made with the World Bank head office June 9th, 2005 for the purposes of obtaining permission to use this screen capture. Copies of emails kept in the permissions binder
if you are interested, here is the site where you can read the entire text of the
World Bank, World Development Report 2000
www.worldbank.org/poverty/wdrpoverty/report/index.htm
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Globalization, some specific examples of the consequences

U.S. company in Mexico

In Mexico, a U.S. waste disposal company, Metalclad, was awarded $16.7 million in damages after the state of San Luis Potosi blocked its waste site in the village of Guadalcazar. Local residents complained the Mexican government was not enforcing environmental standards and that the project threatened their water supply. Metalclad's victory established that NAFTA's dispute mechanism reaches to subnational governments, including municipalities."

"... in a small town in the  Mexican state of San Luis Potosi, a California firm -- Metalclad -- a commercial purveyor of hazardous wastes, bought an abandoned dump site nearby. It proposed to expand on the dumpsite and to haul toxic waste material and other hazardous stuff and dump it in San Luis Potosi. The people in the neighbourhood of the dump site protested. The municipality, using powers delegated to it by the state, rezoned the site and forbid Metalclad to extend its land holdings.Concerned about the potential hazards of the reopened dump to  the local water supply, the state conducted an environmental impact study. As a result, it rezoned the property and forbid any extension of Metalclad's land holdings. Metalclad, under Chapter 11 of the NAFTA, then sued the Mexican  government for damage to its profit margins and balance sheet as  a result of being treated unequally by the people of San Luis Potosi. A trade panel, convened in Washington, agreed with the company."
 http://www.canadiandimension.mb.ca/extra/x0421dc.htm

Japanese company in Canada, moving to Mexico

In the 1980's, a Japanese subsidiary of the Mitsubishi Electronics group bought the RCA TV plant in Midland, Ontario. Mitsubishi operated the plant successfully for some time until they suffered price competition from other picture tube makers who had operations in areas with lower employment costs. In the mid-1990's, in consideration of the NAFTA opportunities, Mitsubishi closed down the plant in Ontario, and moved operations to Mexico.

Globalization, big companies forcing small companies to compete at an unfair level
 
How Canadian
Tire's overseas sourcing 
led to a Canadian icon 
losing business
Woods Canada Limited was founded in 1885 and has been a well known Canadian manufacturer of outdoor clothing and equiment.

They were most famous for good quality sleeping bags which they made in Canada (in Toronto) right up til 2005

As explained by the president of Woods,  David G. Earthy, 
 www.woodscanada.com/_Messages/Msg_02_Dec06.html
a significant part of Woods business was supplying Canadian Tire - in fact the two companies had a supplier - retailer relationship more than 80 years.

Earthy explained Woods had to shut down operations following "...a decision by the Company’s largest customer, Canadian Tire, to discontinue purchasing domestically manufactured sleeping bags."

It has been suggested by others in the industry that Canadian Tire (facing competition from Wal-mart and other big vendors of camping equipment) had to further cut costs and was simply geting cheaper sleeping bags from suppliers in China.

How Walmart's low price policy was accused of shutting down a 
North American manufacturing company
An example of North  American workers losing jobs to cheaper labor overseas
Schrade is (was) a very old family based American manufacturing company that made, since 1904, a limited range of folding knives and fixed blade knives for decades at their factory in the small town of Ellenville in New York state.

Some of their product line can still be seen at
 http://www.knivesplus.com/schrade-knives.html

Like many small and medium sized manufacturers, Schrade was flattered when Wal-mart expressed interest in buying their product - the obvious consequence was that Schrade would be able to manufacture in larger numbers and have a better chance of staying in business in a competitive marketplace.

Over a period of time, Wal-mart became Schrade's largest customer to the point where 80% of Schrade's product was going to the large discount chain.

Then, Wal-mart squeezed Schrade by asking them to compete with low priced knives they were beginning to source in China. Schrade could not match the very low price from China so Wal-mart abruptly cut their business with Schrade. Faced with the loss of its largest customer, Schrade crashed in 2004 barely reaching the 100th anniversary of the founding of the company before all its assets were sold at auction as it was forced in bankruptcy.

There are a number of "walmart sucks" sites on the web that have this story recounted by walmart insiders, and other similar tales, check  http://www.freewebs.com/wallmartsucks/


 
 
KEY
POINTS
American public opinion is, in the majority, negative towards Globalization. Canadians are even further effected, on an individual basis, by international trade since a higher proportion of Canadians have jobs which are effected by international business competitiveness.

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Globalization

U.S.
opinion
 
 
 
 

 

http://www.cepr.net/GlobalPrimer.htm
Wall Street Journal/NBC News poll found that 58% of Americans believed that trade had reduced U.S. jobs  and wages, a view that is almost never expressed by commentators or those who shape public opinion. from  www.cepr.net/GlobalPrimer.htm
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witiger.com
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