Unit 6: Political Outcomes

Loss of Sovereignty

Diminishing Effectiveness of Political Borders

As trade, travel and communication have become increasingly globalised, the importance of national borders has diminished and in many cases the political and economic power of many nations has decreased.  Trade blocs such as the European Union (EU), North American Free Trade Association (NAFTA) and Association of Southeast Asian Nations (ASEAN) have purposefully relaxed border controls within the blocs to promote faster and freer trade and more mobility of labour.  This has brought economic benefits to the countries involved.

Whilst national borders have become less important in many cases, it does not necessarily mean they are not effective.  It has been a deliberate choice to relax them but to increase the effectiveness of the borders that surround the trading blocs.  In this sense they are effective, since they now allow freer trade & movement rather than restricting it.

CASE STUDY: The European Union

One of the main aims of the EU is to guarantee the free movement of goods, services, capital and people.  The establishment of a single market with monetary union has helped achieve this.  In order for the EU to work effectively and efficiently national governments have had to cede significant amounts of power and decision making to the European Parliament, European Commission and European Central Bank.  Many people have been concerned at the loss of sovereignty this is leading to:

Flow of goods

Goods can flow relatively unchecked throughout the EU.  The reduced paperwork and faster transport times have reduced costs for trade within the EU.  Coupled with this is the removal of tariffs on products travelling within the bloc.  Goods imported into the EU face import tariffs and strict controls, all this makes EU produced goods much more competitive than otherwise cheaper imports.

Flow of capital

The EU has experienced increased flows of capital within it and into it.  This is largely due to the adoption of a single currency (the euro) for most countries which has eliminated the costs of currency exchange as well as reducing paperwork and administration costs.  Capital can be moved around the EU by companies and wealthy individuals relatively easily.

The removal of trade tariffs within the bloc has also led to many major TNCs location factories within the EU to get around import taxes.  Examples are (Dell, Toyota, Honda, Nissan).

Another important factor in the flow of capital has been significant remittance payments from workers that have migrated to earn higher wages.  There have been significant numbers of Polish workers moving to the UK and sending money back to families in Poland.

Flow of labour

Labour is able to flow easily between countries in the EU now, with border controls effectively removed on internal borders.  This has made labour much more geographically mobile, allowing workers to move where there is demand for their skills.  This again helps reduce costs for firms through a more consistent supply of labour.

Rise of the TNCs

Globalisation has also allowed the emergence of very influential and economically powerful TNCs.  With movement of labour, capital, goods and services much easier it has opened up the whole world as potential employees and customers to a firm.

Companies that have been able to benefit from cheaper costs  and capture this larger market (Coca Cola, Microsoft, Apple, IBM, Wal-mart, Exxon-Mobil etc) have seen revenue and profits vastly increase.  Many TNCs now have more money passing through them than a significant proportion of the worlds individual countries.  In this sense TNCs are increasingly wielding more financial power than smaller nations.

Another aspect of this is the ease with which firms can relocate.  This means that TNCs can benefit countries by locating in them and bringing jobs, training, capital and technology.  On the other hand they can seriously disrupt a countries economy by closing their operations and moving to a new country.  This allows them to influence governments and in many cases governments actively try to attract TNCs through subsidies and grants.

Gene Piracy & Patenting by TNCs

“Large transnational corporations like Monsanto, DuPont and others have been investing into biotechnology in such a way that patents have been taken out on indigenous plants which have been used for generations by the local people, without their knowledge or consent. The people then find that the only way to use their age-old knowledge is be to buy them back from the big corporations. In Brazil, which has some of the richest biodiversity in the world, large multinational corporations have already patented more than half the known plant species”

Source: http://www.globalissues.org/article/191/food-patents-stealing-indigenous-knowledge

Case Study: RiceTec, USA

“In Texas, a company called RiceTec took out the patents on Basmati rice (which grows in the Indian and Pakistan regions) and have created a genetically modified Basmati rice, while selling it as normal Basmati — and it was not against the law, either. In fact, four of the patents were withdrawn in June 2000, when the Indian government formally challenged the patent….Eventually though, 15 of the 20 patents were also thrown out by the US Patent and Trademark Office (USPTO) due to lack of uniqueness and novelty. However, towards the middle of August 2001, three patents were awarded to RiceTec — to variants called Texmati, Jasmati and Kasmati, all cross breeds of Basmati and American long grain rice, while RiceTec was also given permission to claim that its brands are superior to basmati”.

Source: http://www.globalissues.org/article/191/food-patents-stealing-indigenous-knowledge

Case Study: Wal-mart Vs. Nation States

2010 Wal-mart revenue:$421 billion.

2010 Ireland GDP:$206 billion

Iraq GDP:$81 billion

Bolivias GDP$19.8 billion

Responses

The globalisation process has experienced growing opposition from many different groups and people.  Whilst it has brought economic gain to many and raised standards of living in places there are many negative impacts that it has.  Some of the main themes of opposition are:

The power that TNCs wield (financial, political influence, environmental damage).

Unfair trade agreements that penalise less developed countries.

Poor working conditions (hours, safety, pay) & child labour.

The capitalist system.

Case Study: Rise of Nationalism in the EU

One aspect of the response to globalisation is a resurgence in nationalism, often in reaction to the dilution of cultural traits and the ceding of political power to higher authorities such as the European Parliament. It is sometimes referred to as neo-nationalism.

Whilst the EUs core aims include promoting better relationships between member countries and free movement of people, goods, services and capital, the disparities between countries are creating a neo-nationalist attitude in some cases.

The United Kingdom is going through change as Wales & Scotland seek greater independence to make their own political decisions and have national representatives in the European Union.

Populations in countries with higher GDP/capita are starting to voice opinion about high levels of immigration and unemployment as workers from poorer regions arrive looking for higher wages.

The recent economics crisis has sparked many debates about the inability of nation states using the Euro to set their own fiscal and monetary policy to boost economic growth.  In the hardest hit countries the lack of national control over interest rates and the money supply coupled with increasing taxes is stirring feelings of increased nationalism.  On the other hand the stronger countries are experiencing discontent with the perceived continued financial support for the poorer countries at the expense of their own growth.

A continued rise in neo-nationalism threatens to break apart the European Union as it exists today.

Anti-globalisation Movements

There are many anti-globalisation movements that try to get their message across in different ways.  Most of them operate through spreading information and staging protests or demonstrations in high profile places or at high profile events.  Examples are:

Occupy Wall Street

A movement that has staged peaceful protests that spread to many major cities around the world to protest against the capitalist system that they believe caused the ongoing 2008 economic crisis.

“Occupy Wall Street is leaderless resistance movement with people of many colors, genders and political persuasions. The one thing we all have in common is that We Are The 99% that will no longer tolerate the greed and corruption of the 1%. We are using the revolutionary Arab Spring tactic to achieve our ends and encourage the use of nonviolence to maximize the safety of all participant “ Source: http://occupywallst.org/

People Global Action (PGA)

This is a network that attempts to bring together many of the separate anti-globalisation movements.  It is a network that attempts to organise action and spread ideas/information.

Davos Protests:  The World Economic Forum needed 500 police to safeguard its proceeding as protesters outside tried to disrupt the meeting.

G8 & G20 summit protests:  Meetings of the leaders of these countries are often high profile and have attracted increasing levels of protest.  40 000 police were mobilized by Japan for the Hokkaido G8 summit in 2008 as thousands of protesters from around the world made there way to the city.

Ironically of the key methods for these anti-gobalisation movements to operate is through the globalisation of communication.  Social networking sites, internet forums and online publications allow writers and activists to communicate and spread their message to millions of people and easily coordinate protests & campaigns.

Case Study: Immigration control in the USA

The United States is a country who’s history is strongly linked with immigration.  This tradition of immigration has led to highly multi-cultural urban areas, has boosted the economy through increased supplies of cheap labour and infused cultural traits such as music and food.

In recent decades there has been a sustained effort to increase migration control at the borders.  It applies to both legal and illegal migration.

Southern Land Border

The land border with Mexico is notorious for illegal immigration.   Hundreds of thousands of illegal migrants cross into the  Southern US each year, risking their lives in the process.  The US actively polices the border and has built a high tech, double layered fence along parts of it to reduce the crossings.  The cost of trying to control this border is billions of dollars a year.

Illegal migration across this border has significantly dropped in some places so it is achieving some of its objective.  The sheer size of the border means that it almost impossible to total stop the migration & to do so would cost far too much money.

Port & Airports

The US has increased controls at these points as well.  Technology has allowed comprehensive databases of travellers to be compiled.  Biometric passports, finger printing & retina scanning each arrival and the need for pre-approved permission documents to even get on the plane to the US has reduced illegal migration through these routes.

As long as the US has comparatively high standards of living it will attract migrants.  Rather than stop migration the US is increasingly looking to allow skilled & educated migrants in, these will continue to help the economy.