Global Economy and Market Integration Explained | The Contemporary World (Lecture Series)
Summary
TLDRThis video script delves into the concept of the global economy, emphasizing the exchange of goods, services, and financial capital across nations. It explains market integration as the amalgamation of national economies into larger regions, exemplified by the European Union and ASEAN. The script also covers free trade, tariffs, embargoes, and economic sanctions, illustrating their impact on international trade. Highlighting various international agreements like USMCA, ASEAN Free Trade Area, and Mercosur, the video underscores the significance of these organizations in fostering economic cooperation and prosperity.
Takeaways
- đ The global economy is defined as the international exchange of goods and services in monetary terms, involving economic interactions between nations including trade, investments, labor migration, and financial capital flows.
- đ Market integration is the process of combining national economies to form a larger economic region, aiming to improve economies and facilitate better trade agreements among countries.
- đ Examples of market integration include the European Union and the Association of Southeast Asian Nations, which have their own reasons for joining such as improving GDP and fostering economic development.
- đ Free trade is an agreement between countries allowing the import and export of products without restrictions like tariffs, quotas, embargoes, and sanctions.
- đŒ A tariff is a tax or duty paid on imported goods, such as the example of the Philippines charging 53 pesos per liter of wine imported from another country.
- đ« An embargo is a government-imposed ban on exporting to a certain country, like the Philippines banning poultry products from Brazil due to health concerns.
- đ« Economic sanctions are penalties, such as trade restrictions, imposed by one or more countries on a targeted country for various reasons, differing on a case-by-case basis.
- đ The USMCA (United States-Mexico-Canada Agreement) is an example of a free trade agreement that facilitates tariff-free trade and promotes cooperation among member countries.
- đ The ASEAN Free Trade Area aims to eliminate trade barriers and create a single market, with 99% of goods traded tariff-free among its member states.
- đ€ MERCOSUR, or the Southern Common Market, promotes the free flow of goods, services, and people among its member states, fostering economic cooperation.
- đł COMESA (Common Market for Eastern and Southern Africa) focuses on economic prosperity and integration through trade and the development of natural resources for mutual benefit.
Q & A
What is the global economy?
-The global economy refers to the international exchange of goods and services, expressed in monetary units. It involves economic interactions between different communities of a nation, including the exchange of owned items, sales, purchases, investments from multinational corporations, labor migration, and the flow of financial capital.
What is market integration?
-Market integration is a process that attempts to combine national economies to create a larger economic region. It is about bringing different countries together into one economy, such as in the case of the European Union or the Association of Southeast Asian Nations.
Why do countries participate in international organizations like the EU or ASEAN?
-Countries join such organizations for various reasons, including improving their GDP, economic development, better trade agreements, and fostering relationships with other countries for economic transactions.
What is free trade and what are its benefits?
-Free trade is an agreement between countries that allows them to trade, import, and export products without restrictions such as tariffs, non-tariff barriers, quotas, embargoes, and sanctions. It facilitates the selling of products between countries without additional costs like tariffs.
Can you explain what a tariff is?
-A tariff is a tax or duty that must be paid when a country exports or imports a product into another country. For example, if a wine company exports to the Philippines, the Philippine government collects a tax per liter of wine.
What is an embargo and how does it work?
-An embargo is a government-imposed prevention of export to a certain country or an import ban to a specific place or state. It is used as a response to certain situations, such as health scares or political disputes, to stop the entry of specific products.
What are economic sanctions and how do they differ from other trade restrictions?
-Economic sanctions are commercial or financial penalties applied by one or more countries against a targeted country, group, or individuals. They are different from other trade restrictions as they are a form of punishment or pressure, often used for political reasons, and can include a wide range of penalties.
What is the United States-Mexico-Canada Agreement (USMCA) and its significance?
-The USMCA, formerly known as NAFTA, is a trade agreement between the United States, Mexico, and Canada that facilitates the export of agricultural products without tariffs and promotes new access for Canadian companies to American markets, benefiting the auto manufacturing industry in Mexico.
What is the purpose of the ASEAN Free Trade Agreement?
-The ASEAN Free Trade Agreement was established in 1992 with the aim to eliminate trade barriers, such as tariffs, and to create a single market, promoting cooperation among its member states.
What are some other examples of free trade areas or agreements mentioned in the script?
-Other examples include the Southern Common Market (Mercosur), which promotes the free flow of goods, services, and people among its member states, and the Common Market for Eastern and Southern Africa (COMESA), which aims for economic prosperity and integration through trade and development of natural resources.
What is the significance of partnership agreements like the European Union?
-Partnership agreements like the European Union aim to foster economic, political, and social cooperation among member states. They can also include provisions for the free movement of people, goods, services, and capital, although recent events like Brexit have shown that membership can change.
Outlines
đ Introduction to the Global Economy
The script begins with an introduction to the global economy, urging viewers to take notes on the concepts discussed. It defines the global economy as the international exchange of goods and services in monetary terms, encompassing economic interactions between nations, including trade, investments, labor migration, and financial capital flows. The script emphasizes the interconnectedness of the world's economies, forming a single economic system.
đ Understanding Market Integration and Trade Barriers
This paragraph delves into the concept of market integration, using Robson's 1998 definition, which aims to combine national economies into a larger economic region, exemplified by the European Union and ASEAN. The paragraph explains the motivations behind market integration, such as improving GDP and fostering better trade agreements. It also introduces free trade, contrasting it with tariffs, quotas, embargoes, and sanctions, using specific examples from the Philippines to illustrate these trade barriers.
đ Trade Agreements and International Cooperation
The script discusses various international trade agreements and organizations that promote free trade, starting with the USMCA, which facilitates tariff-free trade among the U.S., Mexico, and Canada, benefiting their respective industries. It also mentions the ASEAN Free Trade Area, aimed at eliminating trade barriers and promoting regional cooperation. Other trade areas like Mercosur and COMESA are highlighted for their roles in promoting economic integration and prosperity within their regions.
đȘđș The European Union and Brexit
The final paragraph touches upon the European Union partnership and the significant event of Brexit, where the United Kingdom voted to leave the EU in 2016. This section also mentions the Trans-Pacific Partnership, but the script ends abruptly, leaving the discussion on these topics incomplete.
Mindmap
Keywords
đĄGlobal Economy
đĄMarket Integration
đĄInternational Organizations
đĄSanctions
đĄFree Trade
đĄTariffs
đĄEmbargoes
đĄEconomic Sanctions
đĄUSMCA
đĄASEAN Free Trade Agreement
đĄMERCOSUR
đĄCOMESA
Highlights
Introduction to the concept of the global economy and its significance.
The request for viewers to take notes during the video for better understanding.
Definition of the global economy as the international exchange of goods and services in monetary units.
Explanation of market integration as combining national economies to form a larger economic region.
The role of international organizations in fostering economic cooperation and development.
Importance of free trade in promoting economic transactions between countries without restrictions.
Clarification of tariffs as taxes paid on imported goods.
Description of embargoes as government-imposed bans on trade with specific countries.
Economic sanctions as penalties applied by one country against another for various reasons.
Examples of free trade areas like the European Union and ASEAN to illustrate market integration.
The United States-Mexico-Canada Agreement (USMCA) and its benefits for member countries.
The impact of free trade on the auto manufacturing industry in Mexico due to USMCA.
Introduction of the Association of Southeast Asian Nations Free Trade Agreement and its goals.
Mercosur as a free trade area promoting the free flow of goods, services, and people.
The Common Market for Eastern and Southern Africa (COMESA) and its focus on economic prosperity.
The European Union partnership and its role in fostering economic integration.
The Brexit event and its implications for the United Kingdom's relationship with the EU.
Trans-Pacific Partnership as another example of international economic cooperation.
Conclusion and invitation for viewers to join the next video session.
Transcripts
hi there awesome thank you for clicking
this video because in this video i'll be
discussing to you
what global economy is but before i get
excited i would like you to get a pen
and a piece of paper because i would
like you to jot down the
concepts that i'll be sharing in this
clip and i know you're ready so let's
begin
at the end of this lesson you shall be
able to
identify and define what global economy
is the significance of market
integration as well as international
organizations
besides that you are going to understand
the concept of sanction target etc so
to begin our lesson
let's try to define what global economy
is global economy refers to the
international exchange of
goods and services that is expressed in
monetary
units of money meaning global economy is
the economic interaction
between and among communities of a
nation
and this interaction involves the
exchange of the things that we own the
things that we sell or the things that
we buy besides that it also includes
investments from multinational
corporations
labor migration and the flow of
financial capital
so meaning global economy
describes a worldwide economy or
the economy of every country in this
globe making global economy as
one great economic system
so for us to understand the interaction
that happens between nations or
countries we have to understand the
concept of market integration but what
is market integration
if you're gonna check the internet or
browse google check youtube there are a
lot of videos or
articles describing or defining
explaining what global or market
integration
however in our subject we are going to
use the definition of robson 1998 who
states that market integration is a
state of affairs or a process which
attempts to combine national economies
to create or make a larger economic
region so what is the meaning of that
market integration is all about
combining or bringing about
national or different countries into one
economy one example for that is european
union and the association of southeast
asian
nation as to why these organizations or
these countries participate or
join or be part of this international
organization
they have their different agenda or
reasons perhaps to improve their gdp or
to improve their economy for the
development
of their countries
for better
trade for better
agreement or relationship with different
countries which are all related to
economic transactions between them and
to other countries one reason as to why
national economies or countries wants to
integrate their markets into a larger
economic region is to have free trade
but what is a free trade free trade it
is an agreement between countries of
which they can trade or import and
export their products without
restrictions
example of those restrictions is
um tariffs non-tariff barriers also
includes quotas embargoes
and sanctions
okay so meaning
if that country or two countries have
free trade or part of a free trade area
they can basically sell
their products to each other without
paying any tariff but what is a tariff
when we say tariff these are taxes or
duties that has to be paid when we try
or when a country tries to
export or bring in their product to a
country let's say in the philippines
in the philippines when
countries will going to sell or
export they're going to deliver
their wine in the philippines the
philippine government will collect 53
pesos per liter of this
um company or of that wine company okay
so if you say in mayba
or tax in every liter
that is an example of a tariff while for
embargo it is a government instituted
prevention of export to a certain
country
um it's
an import ban to a specific
place or state let's say in the
philippines in 2020 because of
a news stating that
chicken in brazil were actually infected
of the cuvee
19
disease and therefore one reaction to
that from the philippine government is
to stop
or to ban the entry of this poultry
product
or products from brazil similarly in
2021
um the philippines also banned the entry
of beef and cattle products again from
brazil because there was this mad com
disease
brazil however
secretary dar lifted this ban or embargo
because
companies or poultry as well as farms in
brazil were able to present
evidences showing uh
um um
beef and cattle in the philippines were
not infected with this mad con disease
okay so that is an example of what we
call embargo so you are going to ban the
entry of a specific
um product or economic action
another concept that is non-existent in
a free trade area is what we call
economic sanction economic sanction
is a commercial or financial penalties
applied by a country or group of
countries
against a targeted country or group or
individuals
and reason for imposing economic
sanction differ or varies it's like a
case case-to-case basis for example
um
that country restricts the
export of
products coming from a specific country
for example
now that we understood the effects and
significance of free trade
to the global economy and its
relationship to market integration
now let's try to see
some of the
organizations or agreements
or international cooperations around the
world which applies
free trade or has free trade agreement
number one on the list we have the usmca
or also known as the united states
mexico and canada agreement for example
the united states can export their
agricultural
products like dairy
vegetables or poultry products to canada
they don't have to pay any tariffs or
taxed
and in response to that the united
states
will provide
new access okay for canadian companies
or canadian individuals
to
um
dairy products peanuts and sugar
containing products and of course mexico
has benefits um to this agreement as
well india and canada and united states
merondin
advantage or benefit from this agreement
and one of which is that they can also
export their product to the united
states tax free because
okay and it also helped boom the
automatic um auto manufacturing industry
in mexico
or investment from this
partner compa a partner
countries
okay besides usmca there is also another
free trade area called association of
southeast asian
nations free trade agreement
let's find out
this specific agreement was created in
1992 with the aim to eliminate trade
barriers like tariff
okay
and to create a original
market and of course to promote
cooperation between
its
member
states okay so um according to this
agreement 99 of all goods are entirely
free eb
taripa
let's say
philippines will
import or let's say the other way around
on thailand
exports
or products
in addition to usmca and after there's
also what we call mercur or the southern
common market and this agreement is
comprised of these countries
the two other free trade areas mercosur
also promotes free flow of goods and
services as well as people to each
member states
nato and besides mercur there is also
what we call
common market of eastern and southern
africa
21 member states and the main purpose of
this komesa or agreement
is
all about economic prosperity and
integration
let's find out
this common market was established to
promote regional integration through
trade and development of natural
resources for the mutual benefit of each
members ibm
um this common market
help each is cooperate magdalen in the
development of their natural resources
in which
operations
in addition to free trade areas we also
have what we call partnership agreements
and one of which is the european union
partnership nato
[Music]
however in 2016
um britain where the united kingdom
exited or umales
european union
immigration sabinillah it was reported
that
united kingdom
apart from european union
trans-pacific partnership
[Music]
with my discussion on trade agreements
and partnership italian and
so there you have it awesome thanks for
watching
i hope to see you next time take care
bye
[Music]
foreign
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