1.0 GLOBAL ECONOMIC AND PRICE FIXATION

Objetive of this unit:

Students will analyze the Global situation for the prices fixation in International Commerce with the purpose of an evaluation.

CONTENT

A fews things you probably need to know about globalisation:

The term:

Globalization or (globalisation) is the process by which the people of the world are unified into a single society and function together. Globalization is often used to refer to economic globalization: the integration of national economies into the international economy through trade, foreign direct investment, capital flows, migration, and the spread of technology. This process is usually recognized as being driven by a combination of economic, technological, sociocultural, political and biological factors. The term can also refer to the transnational dissemination of ideas, languages, or popular culture.

Globalization, since World War II, is largely the result of planning by politicians to break down borders hampering trade to increase prosperity and interdependence thereby decreasing the chance of future war. Their work led to the Bretton Woods conference, an agreement by the world's leading politicians to lay down the framework for international commerce and finance, and the founding of several international institutions intended to oversee the processes of globalization.

These institutions include the International Bank for Reconstruction and Development (the World Bank), and the International Monetary Fund. Globalization has been facilitated by advances in technology which have reduced the costs of trade, and trade negotiation rounds, originally under the auspices of the General Agreement on Tariffs and Trade (GATT), which led to a series of agreements to remove restrictions on free trade.

Since World War II, barriers to international trade have been considerably lowered through international agreements - GATT. Particular initiatives carried out as a result of GATT and the World Trade Organization (WTO), for which GATT is the foundation, have included:

• Promotion of free trade:
  • elimination of tariffs; creation of free trade zones with small or no tariffs
  • Reduced transportation costs, especially resulting from development of containerization for ocean shipping.
  • Reduction or elimination of capital controls
  • Reduction, elimination, or harmonization of subsidies for local businesses
  • Creation of subsidies for global corporations
  • Harmonization of intellectual property laws across the majority of states, with more restrictions
  • Supranational recognition of intellectual property restrictions (e.g. patents granted by China would be recognized in the United States)

Cultural globalization, driven by communication technology and the worldwide marketing of Western cultural industries, was understood at first as a process of homogenization, as the global domination of American culture at the expense of traditional diversity. However, a contrasting trend soon became evident in the emergence of movements protesting against globalization and giving new momentum to the defense of local uniqueness, individuality, and identity, but largely without success.

The Uruguay Round (1986 to 1994) led to a treaty to create the WTO to mediate trade disputes and set up a uniform platform of trading. Other bilateral and multilateral trade agreements, including sections of Europe's Maastricht Treaty and the North American Free Trade Agreement (NAFTA) have also been signed in pursuit of the goal of reducing tariffs and barriers to trade.

To know more about this topic:

Source: Wikipedia

DID YOU KNOW? ACTIVITY

Instructions:

Watch the following video and then reflect about today's situation for your daily life. Discuss with your group and make a final statement.

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READ ACTIVITY

Instructions:

Read the following link at Wikipedia and then discuss with a group of four the following topics as follows:

1. What is globalisation and when did it started?
2. Who are the players?
3. Why is there global inequality, and is is getting worse?
4. What is the role of the Internet and communications technology in globalisation?
5. Is globalisation shifting power from nations states to undemocratic organisations?
6. How does globalisation affect culture? Is it “Americanisation”?
7. What are the environmental impacts of globalisation?
8. Is globalisation resulting in industries in developed countries being undermined by industries in developing countries with inferior labour standards?
9. Is ther any alternative to globalisation?
10. What does globalisation mean to a country like Mexico?

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PREPARE FOR YOUR FUTURE NOW!!!!

Watch the following video and discuss with your classmates about the challenges in today's world when is all about getting a job abroad:



Question

PRICE FIXATION

The need to adapt to costumer requirements simultaneous to the financial drive to lower costs through standardization was nowhere more evident than in relation to the globalization program many consumer –marketing firms started self – consciously to undertake during this time. “Going Global” meant encountering a greater maximum of variation in consumer preferences, since cultural and other “environmental” diversities grow in proportion with the enlargament of the marketing catchment area.

Adaptation and sndardization made inevitable that costing and products pricing were affected in order to meet consumer expectations and at the same time could be adapted to international market circumstances and global competitiveness.