Globalization: functioning and actors

Subject: Globalization: functioning and actors
Although the term "globalization" is recent, the phenomenon is not. Indeed, we are currently within
what could be called "third globalization", although historians still argue about the actual number of
globalizations that have marked our era.Globalization in crude way is the establishment of an inter-
connectivity with different nations, markets and the society as a whole1. Globalization although is a
market oriented term but it has its deep roots embedded in to the politics.Global trade and
commerce is not a new subject that raises concerns among the world leaders, because it all started
with the advent of the silk road, the spice trade that connected the Asian nations with the European
market. It has its origins in the period marked by the "triumph" of liberalism and the financial
markets, which corresponds to the 1990s. By globalization, we mean interdependent economies that
are characterized by progressive growth of global territories and businesses. But what is the mode
of operation of this phenomenon, and what are its main actors?As a first step, we will be interested
in the aspects and the process of this globalization, and then we will be interested in the main actors
that make this globalization work.
Globalization has many faces and can be seen in various waysforms.Appreciated by some, and
denounced by others, it is not everywhere welcome in the same way. It is characterized by an
interdependence of economies and a globalization of trade, which corresponds to a global
acceleration of trade in goods and services, mainly raw materials, food production, capital and
services.After the end of the second world war, political heads of 15 countries in December 1945
begun a talk which was based on the formulation of a custom tariff that will give a boost to the
world trade.This later resulted in the formation of General Agreement on Tariff and Trade2.After
the setup of GATT,aglobalizationof trade resulted in the gradual lifting of trade barriers under the
GATT (General Agreement on Tariffs and Trade), then the WTO (the World Trade Organization)
1Hirst P, Thompson G, Bromley S. Globalization in question. John Wiley & Sons; 2015 Jan 28.
2Matsushita M, Schoenbaum TJ, Mavroidis PC, Hahn M. The World Trade Organization: law, practice, and policy.
Oxford University Press; 2015.

since 1995, as well as by the considerable development of the means of transport and
communication these last decades.
Between 1975 and 1995, these exchanges have increased five-fold, making the 1990s a new era of
globalization, which will be more marked by capital exchanges, particularly with the stock
exchanges. Triad (London, Tokyo, and New York essentially), services through transnational
corporations (TNCs) such as fast-food chains like Mcdonald's for example or KFC, or even
information exchange using globalized products such as laptops and mobile phones that
significantly facilitate global communication, including accelerated by the invention of the Internet
in the 1990s.
Technical progress in transport also comestoadd a certain dynamic to this globalization. Indeed, the
containerization of the multimodal platforms, process allowed thanks to the impulse of the
American entrepreneur Malcom McLean and consisting of generalized the use of the container in
the transport of goods, the hubs (porturaires and air) that is to say to say zones (international ports)
of concentration and bursting of containers at the level of a country or even of a continent, as well
as the rise of telecommunications (NTIC) come to accelerate this process.
Since it is based on the Western model, it works as follows:
transnational firms, seeking to increase their productivity, will try to reduce their production costs.
For this, these firms will then relocate to southern countries, where labor is considerably cheaper, to
have their products manufactured while increasing the working time of employees, who are also
paid at more than miserable wages, which will have the effect of increasing the productivity of the
company, the goal. However, although the manufacturing is done abroad, the design of the product
is always done in the countries of the North, where the headquarters of the company is located.
Thus, what is called the "Research & Development" of the product is done in the countries of the
North, while the countries of the South they serve rather "workshop" to firms: this is what we call

the International Division of Productive Processes (IPPD). The marketing of the product, it is done
on both sides of the world, although it is the northern countries that benefit the most because they
are the majority with nearly 80% of the exchanges that are between them.
On the other hand, the North / South divide is all the more marked since the small producers of the
North accuse the countries of the South of resorting to what we call the "Dumping", which are
commercial practices contrary to the spirit of competition. In fact, weakened by the countries of the
North, the countries of the South would use this method in various forms: ecological, by imposing
on foreign companies only very few restrictive ecological standards, fiscal with few imposed taxes,
as in Africa of the South, for example, where corporation tax is imposed only on companies whose
head office is in the country and therefore considered as resident and therefore taxable, but also
social with countries that do not impose a minimum wage ( minimum wage) and thus presenting a
cheap labor and few or no restrictions on standards and working hours, as in China for example.
This mode of operation also leads to a multiplicity of flows of all kinds. First, it is about
trade flows: between 1980 and 2010, the value of trade was multiplied by 4, thanks in particular to
the liberalization of trade in 1980, which includes all measures taken to facilitate the development
as well as the strengthening of international exchanges. In terms of percentages, nearly 70% of the
products marketed are manufactured, 20% of them are energy and mining products, while only 10%
of them are agricultural. These flows are essentially organized around the Triad (East Asia, Western
Europe and North America) and emerging countries.These countries are considered as rich and
developed, and thus their political intervention into the underdeveloped nations often play a major
role in shaping the domestic politics of an underdeveloped country3.
Other types of flows: intangible flows. Between 1990 and 2010, capital flows, essentially, foreign
direct investment (FDI) between major stock exchanges has increased fivefold, while information
3Syed SB, Dadwal V, Rutter P, Storr J, Hightower JD, Gooden R, Carlet J, Nejad SB, Kelley ET, Donaldson L, Pittet D.
Developed-developing country partnerships: benefits to developed countries?. Globalization and Health. 2012 Jun
18;8(1):17.