prone to market imperfections and volatile capital flows Destabilizing

Prone to market imperfections and volatile capital

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prone to market imperfections and volatile capital flows Destabilizing influence of uncontrolled capital markets and the resulting hardship has caused some of the strongest backlash against globalisation Labour standards in developing world Gap between rich and poor is at its highest level in decadesFrom 1998-2008, globally the top 1% has experienced the largest gains in real income, while real incomes for most workers have fallen or remained stagnant,Reflects middle class squeeze and translation of increasing corporate profits into the highest income bracket and capitalgains for top 1% in advanced countries and large EMsLabour standards and its impact on increased income inequality in developed markets Offshoring to low-wage countries has reduced firm costs but resulted in job lossesin numerous mature economies The power of MNCs to shift production has reduced the bargaining power of workers in rich countries e.g. several MNCs in Germany negotiated pay cuts for workers to avoid moving production to central Europe Decline in the share of middle-skilled occupations relative to low and high-skilled occupations → skills premium Increased immigration has depressed wagesin sectors such as
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LISA YANGIBUS20002 Business in the Global EconomyIncreased wagesfor the well-educated and technically skilled in developing countries Increased access to more and cheaper goods and servicesfor those in developed countriesCultural interminginly with greater knowledge of other cultures Greater multilateral cooperation in resolving global issues e.g. environment, GFCGreater mobility of information, people, capitalcatering, farming and construction. Increased use of technology Sweatshops and labour conditions Natural environment Extraction and usage of resources encouraged by trade and FDI can lead to resource depletion due to overuse, contamination Often problems with resources in the global commons (i.e. public goods like oceans, atmosphere) become universally felt → global warmingOverfishing - Food and Agriculture Organization (FAO)% - many stocks depleted by as much as 90% globally Deforestation, water, air, Ethics Limiting government intervention Market-oriented policies (“Washington Consensus”) International / supranational political pressures WTO agreements, WTO as “Trade Police” Bilateral, regional agreements Sometimes: business (esp. MNCs) The GATT – General Agreement on Tariffs & Trade To liberalise trade and remove trade barriers, raise production, increase standards of living Ensure multi-laterality – non-discrimination and most favoured nation statusReduced tariffs and increased trade volume Doha Round“collapses” acrimoniously in 2008 → Stalling by US, EU, India & China chiefly over agriculture Dec 2015 WTO’s 10th Ministerial Conference in Nairobi effectively declared the death of Doha Consensus on looking at banning agricultural subsidies and smaller trade reform packages In the meantime, increased use of bilateral/regional agreementsEmergence of bilateralism / multilateralism Frustration with progress towards free trade under WTO negotiations Since Doha was launched in 2001 over 100 deals have come into forceE.g. In July 2008, after yet another collapse of Doha Round talks,
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