Economic InterdependenceWHII.16c

Main Ideas The countries of the world are increasingly dependent on each other for raw materials,

markets, and financial resources, although there is still a gap in wealth between developed and developing nations.

Textbook Referencep. 634-647, 675-678, 687-689

InterdependenceDirections

Fill out the Frayer model vocabulary diagram below, placing the word “interdependence” in the ellipse in the center.

Globalization

Going hand-in-hand with the idea of interdependence is the concept of globalization. This means that business and communication networks are becoming integrated on a world-wide basis. Although modern technology is increasing the rate of international integration, global trade is not a new phenomenon. Trade networks like the __________ Route connected Europe, the Middle East and Asia more than 1,000 years ago, and the _______________ Exchange during the European Age of Discovery helped connect the “Old World” of the _____________ hemisphere to the “New World” of the ______________ hemisphere.

Explain how this concept contributes to the phenomenon of “globalization.”

Rapid Communication

Explain how this concept contributes to the phenomenon of “globalization.”

Computer Networks

Explain how this concept contributes to the phenomenon of “globalization.”

Rapid Transportation

Multinational Corporations

A multinational corporation is a business that operates in many different countries. For example, a company may draw its natural resources from one country, manufacture its products in a second country, and sell its products in a third country.

DirectionsThe graphic below shows some of the most powerful multinational corporations that produce consumer products. Look at the graphic and circle the logos of at least 10 products you use on a weekly basis.

Many multinational corporations have “subsidiary” companies, or smaller divisions of the parent company that produce a specific type of product. Visually trace the line from the products you circled to the parent company which makes those products. Which parent company do you rely on the most on a weekly basis?

Apple, Inc.

Apple, Inc. is an example of a multinational corporation known for developing consumer electronics like the _________ (music player), the _______ (mobile phone), the _______ (handheld tablet) and laptop _______________s.

Apple’s corporate headquarters is in Cupertino, California in the ______________ _____________. The Apple Campus is located in the middle of Silicon Valley, where many corporations conduct high-tech _______________ and ______________ (coming up with new ideas).

Apple’s headquarters for its European markets is in Cork, _____________. From here, it also markets its products to Africa and the Middle East.

Many of the raw materials needed to produce Apple’s electronics – silicon, copper, gold, etc. – come from mines in ______________.

One of Apple’s largest manufacturing operations is the Foxconn complex in Shenzhen, _____________, which employs over 300,000 workers who piece together Apple products on an ________________ line.

Financing for Apple’s operations comes from the purchase of stocks by its shareholders, but it also comes by way of loans from banks, such as those in Geneva, __________________.

Apple sells its products to consumers through online marketplaces such as _________________.com and through “____________ and mortar” retail stores like the Apple Store.

Apple “outsources” its tech support services to developing countries where labor costs are cheaper but which also have large English-speaking populations, such as ______________.

Regional IntegrationGlobalization, multinational corporations, and economic interdependence are eroding traditional international boundaries. As more and more ideas, people and products cross over, international borders have become more porous.

As a result, many international treaties have been signed that allow for regional integration. These agreements allow for free trade of goods from country to country without protective ______________s that hinder foreign competition. These treaties also establish international trade __________s to make rulings on disputes between member countries within the trade zone.

Map DirectionsShade the member states of each of the regionally-integrated trade organization according to the

key below.

Red

Organization of American States

(OAS)

Blue

European Union (EU)

Green

African Union (AU)

Orange

Association of Southeast Asian Nations (ASEAN)

International Trade Agreements

The N___________ A_______________ F_______ T___________ A____________________ (NAFTA), implemented in 1994, includes all three North American countries, _____________, the _____________ ____________ and ___________________.

The W___________ T_________ O________________ (WTO), implemented in 1995, seeks to establish worldwide free trade arrangements.

The U_______________ N________________ (UN), created in 1945 at the end of W________ W_____ II, seeks to promote international free trade in order to promote peaceful relations between nations.

The I__________________ M_____________ F______ (IMF) and the World Bank provide loans to developing countries to encourage economic growth.

Critiques of Free TradeWhile free trade and the international free market economies have allowed for the production of a wide variety of consumer goods at relatively cheap prices, some politicians, journalists, labor unions, and activists have criticized the problems created by this global economic network. For example…

Some labor unions in the developed world oppose free trade agreements because these agreements encourage corporations to relocate their operations to the developing world, where labor costs are lower. In order to protect their jobs from being “outsourced,” many labor unions in the developed world want their governments to institute high protective _______________, or taxes on imports.

One reason that labor costs are lower in developing countries is that these countries do not always have strong protections for _____________ rights and workers rights.

As such, labor movements in developing countries are often violently repressed and workers can be fired for demanding better wages, hours and working conditions.

Another reason production costs are lower in the developing world is the lack of ___________________ protections, allowing companies to extract natural resources without paying to offset the negative ecological impact of their actions. However, the “green” movement in the developing world has sought to counter issues like pollution by multinational corporations, with some success.

Critics of the IMF have complained that the conditions of IMF loans lock developing nations into deeper and deeper levels of ________ and force them to adopt economic policies that are detrimental to their poorest citizens.

Political CartoonsDirections

Explain in your own words the meaning of the political cartoons below.

Your Multinational CorporationYou have just been provided with a $1 billion loan and chosen to serve as the CEO of a new

multinational corporation. You can make any product or service you wish. Design your multinational corporation below.

Name of your multinational corporation:

________________________________________

Good or service you produce:

__________________________________________

Headquarters DescriptionWhat will your corporate headquarters be like?

Headquarters Location

Raw Materials NeededWhat natural resources will you need?

Source(s) of Raw Materials

Production Facilities DescriptionHow will you manufacture your products?

Production Facilities Location(s)

Labor PracticesHow will you treat your workers?

Retail Market DescriptionHow will you sell your products to consumers?

Retail Market Location(s)

Government LegislationWhat local and international laws will help

your company be profitable?