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Cooperation and tensions in globalization accross borders. The USA

Table of content

• Cooperation and tensions in globalization accross borders. The USA
  • Why borders ?
  • Globalization
  • Cooperation, Tension, Barriers
  • Global scale, flows of goods
  • Supply chain issues leading to more flexible less complex regional production networks
    • Barriers to trade
    • Global MNOs and International Cooperation
    • Impact of USMCA changes for NAFTA
    • Flows of people
  • Regional flows in North America
    • Maquiladora development in Mexico
    • Issues with illegal flows
    • Global cooperation tensions and barriers, power of the USA

Why borders ?

• They define the area of a state
• Impose regulations
• Regulate flows
• They issue of the borders is sovereignty
  • They want to control flows of people, goods, capital
• They are a source of tension
• Defence
• Preserving culture
• How open should borders be ?
  • We want to trade with other countries

Globalization

• Increasing flows in the golden period of globalization (1980 - 2008)
• BUT TENSIONS
• Economic cost
• Issues with illegal migration
• Political cost/tensions
• Environmental cost

Cooperation, Tension, Barriers

Global cooperation

• International organisations
  • Ex : UN, WTO, IMF, World Bank
• Signatories to international treaties
• International AID
• Trading blocs
  • Ex : EU, NAFTA

Keywords :

• Cooperation
• Participation in international organisations
• Signatories to international treaties
• International AID
• Trading blocs
• Immigration
• Military alliances, sharing of security information
• SDG 17 : Sharing of technology
• Diffusion of wealth from core to periphery
• Internet access

Global scale, flows of goods

• Cooperation
• WTO promoting free trade
  • Free trade
  • Trying to get rid of tariffs
• Trading blocks (USMCA)
• Free trade agreements
• TNCs and Global Supply Networds

• Offshoring, outsourcing, acquisitions and joint ventures

• Tension
• Protectionism
• Tariffs for imports, subsidies for home production
• Trade wars
• Quotas
• Sanctions
• Reshoring by TNCs
  • Bringing back production to the home country
  • Ex : Apple
• Nationalisation of companies
• Regional impact on jobs

Supply chain issues leading to more flexible less complex regional production networks

• Disruptions
• 2008 Financial crisis
• US China Trade war
• Covid-19
• Pandemic travel restrictions
• Climate change carbon targets
• Political disruptions (Maritime choke points, Suez canal, Panama canal, Strait of Hormuz)

Barriers to trade

1. To protect domestic jobs
2. To improve a trade deficit
3. To protect “infant industries”
4. Protection from “dumping”
5. To earn more revenues

Global MNOs and International Cooperation

• WTO (Goods)
• IMF (Capital)
• NATO (Defence)
• COP Agreements (Environment)
• USMCA (Economic)
  • Came out of NAFTA
  • US, Mexico, Canada
  • Free trade agreement
  • 1994
  • 2018 : Trump renegotiated it
• EU (Political and economic union)

Impact of USMCA changes for NAFTA

• Supporting Mexican workers’ employment rights with greater sue of collective bargaining to increase Mexican wages
• By 2023, around 40-45% of car parts must be made by workers earning at least $16 per hour
• 75% of car parts must be made in North America
• 70% of steel and aluminium must be sourced from North America

Regional Borders

• Goods
  • Trade increasing within N America due to simpler more flexible supply networks to reduce risk. Also USMCA and free trade contrasted with US China trade war
• People
  • Need to control flow of people, Political, key election issue
  • USMCA and NAFTA
• Information
  • Technology such as biometric passports, fingerprinting, face recognition technology, drones for surveillance
• Capital
  • Issues with money laundering, tax evasion, corruption
  • Remittances from Mexican workers in USA to Mexico

Capital flows, Remittances

• A lot of money is sent back to Mexico
• 2019 : $36 billion
• 2020 : $40 billion

Flows of people

Cooperation

• International Migration
• Waevs of immigration throughout US History Push/pull factors
• Low income jobs filled
• Changing ethnic demographics
• Regional migration (Periphery to core)
• Regional and city variations
• Diasporas
• Cultural hybridity (37% NY workers are foreigners)

Tensions

• Digital divide between urban and rural areas
• Differences in regional connection speeds
• Tensions between countries over data protection

Regional flows in North America

• Cooperation
  • USMCA
  • NAFTA
• Tensions
  • US China trade war

Flows at the borders

• The flows of people at the mexican border is higher than the canadian border
• The flows of goods at the canadian border is higher than the mexican border

Maquiladora development in Mexico

• Factories that are foreign owned byt employ local labour
• Many US companies have low cost assembly plants in Mexico
• Since 1989, more than 1 million jobs have been created

Case example Fender

• Offshoring from US to Mexico began in 1980
• Accelerated after 1994 and NAFTA
• As US could import materials tarrif free
• Low cost assembly lines, low wages
• Could compete with Asian imports

Local flows of goods from Mexico to USA

• 80% of Mexican exports go to USA
• 50% of Mexican imports come from USA
• 2019 : $614 billion of trade

Issues with illegal flows

Illegal migration

• The flow of illegal border crosser goes in both directions
  • Since around the time Donald Trump was elected, the number of illegal border crossers has been increasing

Global cooperation tensions and barriers, power of the USA

Political persuasion

• Participation in global organisations, WHO
• Cooperation on Green energy and climate change
• Capital flows, international AID, FDI, and remittances
• The SDGs and global partnerships
• Global brands and globalization
• Language, media, education

Hard Power

• Military power, NATO
• Sanctions
• Tariffs