Russian immigrants sell caviar at a kiosk in Brooklyn, New York. Standards Preview. World Trade Organization (WTO) protectionism bloc sustainability

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1 SECTION Standards-Based ion Standards-at-a-Glance History-Social Science Students analyze the integration of countries into the world economy, with a focus on financial relations and trade. Analysis Skills CS4 Students relate current events to the physical and human characteristics of places and regions. English-Language Arts Writing.4 Russian immigrants sell caviar at a kiosk in Brooklyn, New York. Globalization WITNESS HISTORY A Connected World AUDIO Few topics are as controversial as globalization. That is hardly surprising. It is the defining feature of our time. Bringing distant markets and people across the world together is a huge change that affects everyone, whether they are peasants in India, students in London, or bankers in New York. Mike Moore, director-general of the WTO, 000 Focus Question How is globalization affecting economies and societies around the world? Prepare to Read Build Background Knowledge Ask students to recall the goals of the European Union. Discuss the growth of the Asian Tigers and how this has affected the global economy. Then ask students to predict ways that nations of the world might draw closer together economically and politically. Set a Purpose WITNESS HISTORY Read the selection aloud or play the audio. AUDIO Witness History Audio CD, A Connected World Ask How does Mike Moore expect people to react to globalization? Why? (with varied emotions, because it is a complex and powerful issue that changes people s lives dramatically) Focus Point out the Section Focus Question and write it on the board. Tell students to refer to this question as they read. (Answer appears with Section Assessment answers.) Preview Have students preview the Section Standards and the list of Terms, People, and Places. Have students read this section using the Paragraph Shrinking strategy (TE, p. T0). As they read, have students fill in the Venn Diagram listing how globalization has affected both developing and developed nations. Reading and Note Taking Study Guide, p. 167 Developed Nations Depend on outsourcing Standards Preview H-SS Students analyze the integration of countries into the world economy and the information, technological, and communications revolutions (e.g., television, satellites, computers) Terms, People, and Places globalization interdependence outsourcing multinational corporation Vocabulary Builder Use the information below and the following resources to teach the high-use word from this section. Teaching Resources, Unit 4, p. 87; Teaching Resources, Skills Handbook, p. 3 High-Use Word asset, p. 637 World Trade Organization (WTO) protectionism bloc sustainability Reading Skill: Compare and Contrast As you read, use the Venn diagram to track how globalization has affected developed and developing nations. Developing Nations Globalization defines the world of the post-cold War. Globalization refers to the process by which national economies, politics, cultures, and societies become integrated with those of other nations around the world. Globalization began on a small scale 500 years ago, with the European Age of Exploration. By the 1990s, globalization was occurring at a dramatic, unprecedented pace. An Interdependent World One major effect of globalization is economic interdependence. Interdependence is the dependence of countries on each other for goods, resources, knowledge, and labor from other parts of the world. Improvements in transportation and communication, the spread of democratic systems, and the rise of free trade the buying and selling of goods by private individuals and corporations in a free market have made the world increasingly interdependent. The spread of goods and ideas has even led to the development of a global culture. All of these links, from economic to cultural, have created both challenges and opportunities. Doing the World s Work The world s rich and poor nations are linked. The nations of the developed world control much of the world s capital, trade, and technology. Yet they increasingly depend on largely low-paid workers in developing countries to produce manufactured goods cheaply. Companies in industrial nations also choose to outsource jobs. Outsourcing is the practice of sending work to the developing world in order to save money or increase efficiency. Many technological jobs have been outsourced to India, Russia, China, and the Philippines. Definition and Sample Sentence n. any property that has exchange value My aunt plans to buy a store, so she sold her house as an asset to pay for it. 636 The World Today

2 wh07_te_ch34_s0_ca_s.fm Page 637JulyFriday, wh07_se_ch34_s0_s.fm Page 637 Thursday, 1, 005October :48 PM14, 005 1:04 PM Multinational Corporations Grow Globalization has encouraged the rise of huge multinational corporations. These corporations have branches and assets in many countries and sell their goods and services throughout the world. Proponents of multinational corporations point out that they invest in the developing world, bring new technology to industries, provide jobs and technical assistance, and improve infrastructure. Critics feel that multinational corporations have too large an influence on the prices of goods, they take large profits out of developing countries, and they pay workers low wages, thus lowering their standard of living. Teach Vocabulary Builder asset (AS et) n. any property that has exchange value An Interdependent World H-SS Introduce: Key Term Ask students to find the key term interdependence (in blue) in the text and explain its meaning. Use the Idea Wave strategy (TE, p. T) and ask them to identify ways that nations can be interdependent. Write their answers on the board. Teach Link students lists to the section content, focusing on economic links such as the use of low-cost labor to produce goods for wealthy nations; the global reach of multinational corporations; financial ties among nations; and the need for energy resources. For each category, have students suggest one way that global interdependence has been positive and one way it has been negative, either for developing or developed nations. Quick Activity Display Color Transparency 117: Global Interdependence. Have students use the information on the chart to explain ways the nations of the world are interdependent. Color Transparencies, 117 Financial Crises Affect Everyone One aspect of economic interdependence is financial interdependence in the world s markets. This means that an economic crisis in a country or a region can have a global impact. An example of this is the Asian financial crisis of the late 1990s. In 1997, a financial crisis struck Thailand and quickly spread to other Asian countries from Singapore to South Korea. The Asian financial crisis worsened Russia s economic woes and contributed to a recession in Japan, Asia s economic powerhouse. The fallout continued to spread around the globe, as affected countries were unable to repay loans. Oil: A Volatile Natural Resource In an interdependent world, natural resources especially energy resources play a huge role. All nations, for example, need oil for transportation and for products ranging from plastics to fertilizers. Any change to the global oil supply can have a major impact on economies and lives around the world. For example, in 1973 OPEC limited oil exports and raised oil prices, sending economic shock waves around the world. Since then, whenever oil prices have risen sharply, people have faced economic uncertainties. Although people have invested in developing alternative fuels or conserving energy, the world has remained largely dependent on oil. For: Audio guided tour Web Code: mzp-341 World Oil Resources and Consumption CANADA UNITED STATES 0.0 MEXICO Pacific Atlantic IRAQ LIBYA 30.0 NIGERIA 3.0 E S Robinson Projection mi 0 JAPAN CHINA SOUTH KOREA. Pacific Map Skills World oil resources are Indian distributed and consumed unequally. N W IRAN KUWAIT INDIA 98.9 U.A.E.. SAUDI ARABIA VENEZUELA 53.1 Major oil reserves Major oil consumers Major oil reserves and consumers Total reserves (billions of barrels) Total consumption (millions of barrels).6 RUSSIA 5.6 FRANCE BRAZIL GERMANY km 1. Locate (a) China (b) Saudi Arabia (c) Iraq (d) Iran. Identify Which nations contain major oil reserves and are also major oil consumers? 3. Predict Given what you have read about the developing world, which nations are likely to become major oil consumers in the future? Have students access Web Code mzp341 to take the Geography Interactive Audio Guided Tour and then answer the map skills questions in the text. As students fill in their Venn Diagrams, circulate to make sure they list effects of globalization on developing and developed nations. For a completed version of the Venn Diagram, see Note Taking Transparencies, 17 Check answers to Map Skills questions. Solutions for All Learners L1 Special Needs L Less Proficient Readers Have students work in pairs to explain how interdependence (defined on the previous page) is illustrated by the map titled World Oil Resources and Consumption. Ask them how nations that are oil consumers and nations with oil reserves are interdependent. Have them discuss the advantages and disadvantages of interdependence as it relates to oil. L English Language Learners Use the following resources to help students acquire basic skills. Adapted Reading and Note Taking Study Guide Adapted Note Taking Study Guide, p. 167 Adapted Section Summary, p. 168 Answers Map Skills 1. Review locations with students.. Russia and China 3. Answers may include any nations in Africa, South America, or Asia that are moving ahead in development. Chapter 14 Section 637

3 Global Trade Organizations and Treaties H-SS Introduce Ask students to recall how the EU strives to foster and build on interdependence among member nations. Have students predict ways that other regional and international organizations might respond to global interdependence. What goals might they have? What problems might they face? Teach Using the Numbered Heads strategy (TE, p. T3), have students list each global organization or treaty on the board. For each, have students describe the organization or treaty and explain its impact on globalization. Discuss the goals of each, as well as any problems that have resulted. Ask students how their reading confirmed or revised their predictions about goals and problems. Quick Activity Display Color Transparency 118: Man/Life/Problem Solving, by Joel Nakamura. Ask students what the painting s main idea is and how it relates to the controversial issue of globalization. Color Transparencies, 118 Have students examine the Infographic Coffee: From Shrub to Cup. Ask them to create a simple flowchart showing how coffee is produced. For each step on the chart, have them fill in whether the step mainly affects the developing world or the developed world. Circulate to confirm that students are creating accurate flowcharts. Then discuss how coffee production illustrates both the advantages and disadvantages of globalization. (For example, consumers in the wealthy, developed world are able to enjoy coffee that is grown far away. However, farmers in the developing world receive a very small share of the price paid by the consumer.) INFOGRAPHIC Coffee is the most popular drink in the world today, other than water. Each year, people consume over 500 billion cups of coffee. Coffee is believed to have originated in the Kaffa region of Ethiopia, which gave the drink its name. Demand for coffee slowly spread from Africa to the Middle East and then to Europe. Eventually it reached Asia and the Americas. Coffee has had a tremendous cultural impact, shaping diets and social customs. Coffee has also dramatically influenced the global economy. After crude oil, it is the world s most actively traded commodity. Link to Economics The Far-Reaching Effects of Debt In the 1980s, bank interest rates rose while the world economy slowed. Developing nations that had borrowed capital to modernize were hard hit. As demand for their goods fell, poor nations could not repay their debts or even the interest on their loans. Their economies stalled as they spent their income from exports on payments to foreign creditors. The debt crisis hurt rich nations, too, as banks were stuck with billions of dollars of bad debts. To ease the crisis, lenders lowered interest rates, gave some nations more time to repay loans, or even canceled debts. In return, they required debtor nations to adopt reforms such as privatizing state-run industries. They argued that more efficient private enterprises would bring prosperity in the long run. Standards Check What effect can a reduction in oil production in one country have on other countries around the world? H-SS Global Trade Organizations and Treaties Many international organizations and treaties link people and nations around the world. They have various goals, including encouraging development, settling economic issues, and promoting free trade. Free trade is a key part of global trade today. International Organizations Expand The United Nations is an international organization whose responsibilities, along with its membership, have expanded greatly since The UN has acted in a peacekeeping role from Cambodia to Congo to the Balkans. In addition, it deals with political, social, economic, and cultural issues. Other international organizations deal specifically with economic issues. The World Bank, for example, offers loans and advice to developing nations. The International Monetary Fund (IMF) was established after World War II. Top Ten Coffee Producers, 003 Brazil Colombia Vietnam Indonesia India Mexico Guatemala Uganda Ethiopia Peru Represents 1 million bags of coffee SOURCE: U.S. Department of Agriculture Answer A reduction in oil production can lead to higher energy prices around the world, and therefore to higher manufacturing and transportation costs worldwide. 638 The World Today Outsourcing Improved communications technologies and the removal of barriers to trade have made it easier for companies in the developed world to move jobs to developing countries, where the pay is lower. This process, known as outsourcing or offshoring, allows companies to cut labor costs. During the 1980s and 1990s, outsourcing mainly affected manufacturing jobs, but, since 000, more service jobs have moved to developing countries. Critics of outsourcing say that these moves threaten the strength of the United States economy, which depends on such jobs. Advocates respond that outsourcing helps the American economy, by allowing companies to sell products and services to consumers at lower prices and by improving companies profits.

4 Its goal is to promote international monetary cooperation and encourage global economic growth. It also monitors economic development and provides advice to developing nations. Other organizations are called nongovernmental organizations (NGOs). NGOs, which are usually not affiliated with governments, perform a variety of functions including monitoring human rights, disaster relief, and economic development. Treaties Guide Global Trade The General Agreement on Tariffs and Trade (GATT) was signed in 1947 to expand world trade and reduce tariffs. In 1995, more than 100 nations joined to form the World Trade Organization (WTO) to strengthen GATT. Its goal was to set up global rules to ensure that trade flows as smoothly and freely as possible. One of the WTO s basic policies is its opposition to protectionism, or the use of tariffs and other restrictions that protect a country s home industries against competition. The Group of Eight (G-8) is an international organization of industrialized nations that meets yearly to discuss a wide range of economic and other issues. The G-8 consists of Great Britain, Canada, France, Germany, Italy, Japan, the United States, and Russia. Regional Trade Blocs Promote Trade Many nations have formed regional blocs, or groups, to promote trade and meet common needs. Among the largest is the EU. NAFTA (North American Free Trade Association) is a regional trade bloc that went into effect in 1994 to facilitate trade among the United States, Canada, and Mexico. APEC (Asia-Pacific Economic Cooperation) promotes trade among Pacific Rim nations. OPEC, representing oil-producing countries, regulates the production of oil to stabilize the market. Organizations like these work to lower trade barriers among countries in their regions and promote the free exchange of goods and services. Some deal with both economic and political issues. Standards Check Why was the IMF established? H-SS Growing Coffee A worker in Thailand picks raw coffee beans from a shrub. Less than 10 percent of the money made from coffee actually goes to the grower. The Fair Trade Movement The fair trade movement seeks to ensure that coffee growers receive fair prices for their crops and have decent living and working conditions. Coffee that has met these conditions is stamped with the fair trade logo. Drinking Coffee By the time coffee beans are turned into cups of coffee in the developed world, they have passed through the hands of many middlemen and have been re-sold a number of times. The coffee crop that a small farmer earned $8,000 for growing is worth nearly a million dollars to the people who sell it. Thinking Critically 1. Chart Skills What regions are the top 5 coffee producers located in?. Draw Inferences Why does a crop of coffee become more expensive each time it is sold by middlemen? H-SS Costs and Benefits of Global Trade H-SS Introduce Direct students to the photograph on the next page. Ask students to describe what it shows. (masked protestors speaking out against the WTO and globalization) Based on what students have read about global organizations and treaties, ask them to explain why people might oppose the WTO. What costs might they view as not worth the benefits? Teach Create two columns on the board, labeled Costs and Benefits. Have students list the costs or benefits of globalization in the appropriate column. Discuss how, if at all, each item differs for developed and developing nations. Have students work in groups to debate the costs and benefits of global trade. Large groups can begin by drafting a debatable statement, such as The benefits of global trade outweigh the costs. These groups can then divide in half to prepare and deliver arguments for or against the statement. Urge groups to use the chart created by the Teach activity as an aid to their preparation. As students prepare for their debates, make sure they have created a truly debatable statement. Check Reading and Note Taking Study Guide entries to confirm that students have accurately listed impacts of globalization on developing and developed nations. Answers to promote international monetary cooperation and encourage global economic growth Thinking Critically 1. Latin America and Asia. In order to make a profit, each middleman increases the sale price of the coffee. Chapter 14 Section 639

5 Assess and Reteach Assess Progress Have students complete the Section Assessment. Administer the Section Quiz. Teaching Resources, Unit 4, p. 83 To further assess student understanding, use Progress Monitoring Transparencies, 79 Reteach If students need more instruction, have them read the section summary. Reading and Note Taking Study Guide, p. 168 Extend Adapted Reading and L1 Note Taking Study Guide, p. 168 Spanish Reading and Note Taking Study Guide, p. 168 L4 Have students write an exchange of letters between family members or friends living in developing and developed nations. Each letter should address an aspect of globalization, such as energy needs or outsourcing, describe how the situation is affecting the writer s life, and express a view for or against globalization. Answer Global trade brings variety of goods to consumers, at generally low prices. It improves technology and communications. Sometimes it raises people s standard of living and provides better services. Standard H-SS E-LA W.4 Assessment, 3, 4, 5 Quick Write L L Anti-Globalization in Action 1999, an anti-globalization demonstration led to rioting when thousands of protesters disrupted WTO meetings in Seattle, Washington. Terms, People, and Places 1. What do each of the key terms listed at the beginning of the section have in common? Explain.. Reading Skill: Compare and Contrast Use your completed Venn diagram to answer the Focus Question: How is globalization affecting economies and societies around the world? Costs and Benefits of Global Trade With advanced communications and increased economic ties, globalization is expected only to increase in the years ahead. Yet people still debate the effect of globalization on people around the world. Benefits of Trade Global trade has many benefits. Most obviously, it brings consumers great variety in the types of goods and services that are available to them. And because many people compete to provide those goods and services, it ensures that prices are generally kept low. Globalization exposes people to new ideas, technology, and communications. Global trade also encourages growth in technology and communications, benefitting people s daily lives. Success in trade earns money that can be used to improve infrastructure, raise standards of living, and provide better services. Nations involved in free trade have often become more democratic. And most economists believe that trade works best when nations have an informed citizenry that is free to participate in economic processes. The Anti-Globalization Movement A vocal movement opposes globalization. Generally, anti-globalizers focus attention on poverty. Many claim that rich countries exploit poor countries by raising their debt and lowering their standard of living. They also argue that nations that try to meet the demands of international trade are put at risk by specialization or focusing their economies on one or two high-value commodities. The anti-globalization movement often targets the World Bank and the IMF. Both of these organizations work to ease economic problems, but critics oppose the tough changes they often require nations to make. Anti-globalizers also often target the United States, which as the world s superpower is seen as the force behind policies they oppose. Some people believe that globalization hurts indigenous peoples by taking their lands and disrupting their culture. Others say its emphasis on profits encourages too-rapid development, dangering sustainability. Sustainability is the ability to meet the needs of the present for food, resources, shelter, and so on without harming future generations. Standards Check What benefits do global trade have on people s everyday life? H-SS Comprehension and Critical Thinking 3. Make Comparisons Which countries benefit more from economic interdependence developed or developing countries? Explain. 4. Draw Inferences Many Americans opposed the passage of NAFTA in Given what you have read in this section, what do you think their objections were? 5. Demonstrate Reasoned Judgment Do you think that increased globalization is inevitable? Explain. Standards Monitoring Online For: Self-quiz with vocabulary practice Web Code: mza-341 Writing About History Quick Write: Generate Arguments One of the most effective ways to persuade is to address both sides of the topic you are covering. Create a chart to record facts about globalization. In one column, record the facts that support your position on globalization. In the second column, note arguments that could be used to attack your position. Section Assessment 1. Sample: international trade or its impact; answers should show an understanding of globalization.. Globalization is making economies and societies more connected. It has both positive and negative impacts, which may vary from region to region. 3. Developed nations benefit from low-cost workers and imports. However, they are 640 The World Today vulnerable to problems that arise in developing nations, such as excessive debt. Developing nations benefit from improvements in communication and technology, but they may suffer from exploitation of their labor and resources. 4. Sample: They objected to the use of lowcost labor in Mexico at the expense of American workers. 5. Samples: Yes, because technology has created ties among nations. No, because people can always reimpose barriers. Writing About History Charts should reflect a clear position on globalization. Each fact listed should logically support the writer s position. Each argument against the position should be supportable with facts. For additional assessment, have students access Standards Monitoring Online at Web Code mza-341.