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In this chapter:

  • Globalisation is a term used to describe the removal of borders for the international expansion of markets
  • The process of globalisation is not new; European countries colonised continents several hundred years ago
  • The rate of globalisation has been increased by new international standards, improved technologies and the lifting of trade restrictions
  • Globalisation can be divided into four different components: participants, markets, rules and equipment
 

Introduction

It has not always been possible to wear American-branded clothing, eat foreign food at a local restaurant or see a movie made in England; all whilst living in Australia. It is the force of globalisation that has allowed such activities to become commonplace across the world.

What is globalisation?

Globalisation is a broad term which is often used to describe the way that the cultural, political, technological and economic domains of countries are rapidly expanding outside of their own nations and on to an international level. Advances in technology have meant that people, companies and nations are no longer restricted by national borders and geographical distance. The world is more closely connected and, as a result, it is often thought to be a 'smaller place'.

For much less than it has cost in the past, new communication technology has allowed people to instantly contact friends and family on the other side of the world through a variety of media, including text messages, telephones, facsimile machines, web cameras and instant messaging.

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Improvements in transport technology mean that people can now visit their loved ones anywhere in the world in less than 24 hours. Goods and services can also be transported more easily across borders. The combination of improvements in technology and the lifting of many restrictions on trade between countries have resulted in an increase in international trade.
 
The impact of globalisation in recent times in Australia can be seen through free trade agreements with Singapore, Thailand and the United States.

The process of globalisation

During the late 20th century, globalisation rapidly expanded to resemble the form which it is commonly known as today. Some suggest, however, that since the process of globalisation results in the world becoming increasingly integrated, then it must have existed since the beginning of man.

The process of globalisation is said to have existed at least several hundred years ago. Evidence to support this rests on the knowledge that, around that time, European countries began to expand and colonise the continents of Australia, Africa, North America and South America.

Towards the end of the 19th century, world trade and investment experienced rapid expansion. The world was further united when the Gregorian calendar was adopted. The International Date Line, Prime Meridian and world time zones were also established at that time. International standards were also devised in the areas of telegraphy and signalling.

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The period of economic depression (the 'Depression') between WWI and WWII slowed down progress towards globalisation when a number of countries introduced anti-free trade measures in an attempt to stimulate their own economies. It did not take long, however, for companies to become interested in expanding their business by operating in the markets of foreign nations. Developments in communication and transport, particularly that of air travel, soon made it possible for these companies to carry out their plans. The development of the internet continued to assist these companies, creating transnational corporations (businesses with a base in one country but conducting operations in a number of other countries) the way of the future.

The characteristics of globalisation

Globalisation can be divided into four different components: participants, markets, rules and equipment.

Trade negotiations were originally made solely between colonies or countries. In recent times, the World Trade Organisation (WTO) has enforced the rules and settled disputes over the global trading system. It oversees agreements which have international legal status and therefore has a degree of power over national governments. Large transnational companies also have an increasing amount of power as their financial capacity exceeds that of some nations.

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Globalisation has changed the market by providing more freedom to trade between countries. It has also resulted in an expansion of the market, with countries being able to trade with any nation at any time. National markets are being replaced by international ones, as companies continue to develop on a worldwide scale.
 
New rules and laws have been introduced to accommodate a more unified world. Agreements made by multiple nations are called multilateral agreements. This means that national governments are required to not only uphold their own national policies but also those of the multilateral agreement. There has also been an increase in the number of standards such as copyright laws, which have been made universal. The establishment of the International Criminal Court and International Court of Justice also reflects the changing needs of a more global society.
 
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Globalisation is characterised by the new equipment which has assisted it in becoming such a major force in recent times. Mobile phones, facsimile machines and the internet are examples of new technologies which have allowed companies to expand and connect with others around the world.

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1. What does WTO stand for?

Wide Technology Opposition

World Travel Order

Wire Transfer Operation

World Trade Organisation

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