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C Money makes the world go around

Economy and trade make up the public face of globalisation. In newspapers and magazines, on television and radio, we are constantly reminded of the global nature of world trade and the push for progress. Behind a bewildering number of acronyms GATT, WTO, ASEAN, APEC, OECD trade is being organised internationally to an extent never seen before. Increasing integration is being driven by the reduction of many, but not all, barriers to trade (reduction of tariffs and liberalisation of capital and nancial markets) technological progress and the economic growth of countries opening up their markets.

The global marketplace

Economic integration leads to bigger marketplaces. Virtually all countries that trade more grow faster. Their economic policies, availability of natural resources, exibility of the labour market, efciency of infrastructure and levels of corruption inuence the level of economic growth and the standard of living of the population. Countries export the goods and services they are better at producing and import what they are not as good at producing. While countries can shop on an open market and buy goods at cheaper prices, they also have to sell in that same market. This means they face competition from other countries selling the same goods perhaps more cheaply and of better quality. Labour costs are high in many developed countries like Australia and countries in Western Europe and North America. In many less-developed countries, such as countries in Asia and Central America, labour costs are low. It can make economic sense for a company from a country with high labour costs to move its manufacturing operations to a country with low labour costs. Theoretically, everyone gains from this development. The company can keep its costs down and remain competitive in the marketplace; the companys country of origin benets, via taxes, through a higher level of sales; the companys new country of manufacture benets through a rise in jobs and income; and consumers benet through lower-priced goods. But there is a personal side to such changes and it has been felt in Australia. When companies move their manufacturing operations away from Australia, Australian jobs are lost this occurred in April 2004, when Electrolux moved production to Asia at a cost of about 300 jobs in South Australia and New South Wales. If people are prepared to move or have other skills, they are often able to nd other employment. Sometimes companies and governments are able to protect jobs or offer training for alternative jobs.

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Free trade or fair trade?

In theory, free trade means there are no restrictions on trade between nations and they should be able to compete fairly against each other on the open market. The reality is that many nations have a range of barriers to protect their own producers. Opponents of global trade claim large international companies take advantage of the lower wages they can pay workers in poorer countries. Although workers may be offered higher wages than they earned previously, they often have to work long, hard hours, move away from their families and put up with poor working conditions. Income produced by the companys investment may not be used to improve conditions in the country as a whole, but may nd its way into the pockets of a few. Recently, closer scrutiny by consumer groups of the ways international companies treat their workers, coupled with reports published in the media and on the Internet, has inuenced the development of such things as codes of conduct to protect workers. As a means of countering some of the anomalies caused by the globalisation of trade, the Fair Trade movement has developed. The Fairtrade Labelling Organizations (FLO) set standards for world certication. Certication requires the producer to comply with strict standards of production, including such things as no child slavery and healthy working conditions. In return, certied purchasers pay a higher, stable price for the product. Major products covered by Fair Trade include coffee, cocoa, tea, sugar and sporting goods. Despite the moves to free up world trade, many countries have found ways to protect their products from open competition. They might enact harsh quarantine laws that could disadvantage goods from certain destinations, impose quotas upon imports or pay subsidies to producers in their own country to enable them to compete with higher priced imported goods. This last method is most commonly seen now in the farming sector. Trade blocs, where countries agree to group together and allow their importers and exporters to buy and sell from each other in preference to trading outside the group, can also undermine the idea of free trade. Such a bloc was discussed at the October 2003 meeting of the Association of South East Asian Nations (ASEAN) countries. An ASEAN trade bloc would disadvantage Australia because access to important Asian markets would be more difcult to achieve because preference would go to their fellow ASEAN partners.

The World Trade Organization

The World Trade Organization (WTO) was set up in 1995 and acts as a forum for international trade negotiations. It administers trade agreements, settles disputes, assists developing nations to participate in worldwide trade, and reviews countries trade policies. As a result, it can assist trade to function smoothly and fairly, minimising the unpredictability of markets that are naturally volatile. Decisions of the WTO are arrived at by consensus, and agreements are ratied by the parliaments of all member countries. The WTO aims for a system of trade which is non-discriminatory (products compete fairly on the market, no matter where they originate), transparent (information about policies, dealings and rules is clear and readily available), and straightforward (a single set of rules applies to all members). Opponents of the WTO accuse it of putting commercial interests ahead of all others and ignoring human rights, environmental protection, social justice, local culture and national sovereignty in order to facilitate the expansion and smooth running of global corporate activity. They see the WTOs strong defence of patents, copyrights and trademarks as costing lives such as the case where South Africa was threatened with WTO sanctions if it passed laws effectively allowing the promotion of the use of less expensive generic drugs to treat AIDS patients instead of using the expensive proprietary brands. After lobbying by several groups the WTO agreed to allow the importation of generic drugs.

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Money makes the world go around

The rise of transnational corporations
Perhaps the most obvious signs of the global economy in our everyday lives are the products of the transnational corporations. Transnational corporations (TNCs) are huge companies that are not bound by national frontiers. Many of them are familiar to us via their brands and logos Microsoft, Toyota, Shell, McDonalds. TNCs have become so large that some of them have economies that are larger than the economies of many countries. By distributing their business around the world, TNCs are able to take advantage of such things as cheap labour, investment opportunities, production expertise, available raw materials and proximity to markets. A TNCs operations in different countries can concentrate on different parts of the production process depending on their expertise, efciency or economy. This results in cheaper products, a greater availability of jobs and more foreign investment. It can also mean exploitation of workers, increased bargaining power with governments and environmental damage.

Australia and the global economy

The increased integration of worldwide trade has beneted Australia. Export income has increased through the opening up of new overseas markets in which Australia can sell goods and services. These materials can be either items that are manufactured for sale or resources which we cannot consume ourselves. The money gained by these exports helps improve the standard of living in Australia through improved ability to buy imported items and resources that we cannot produce ourselves. Australias economy has felt the impact of the growing global economy. Since the 1980s, successive Australian governments have moved towards adopting free trade policies and removing protection for Australian industries, making imports cheaper and Australian industries more efcient and competitive. Some services that used to be provided by the state have been privatised (e.g. energy, airports), increased competition has been introduced into areas that were previously monopolies (e.g. telecommunications) and in other areas the number of providers has been restricted (e.g. banking). All such moves have been carefully monitored by governments keen to make industries internationally competitive through effective rather than rigid market regulation. Control has also been relaxed on the value of the Australian dollar; since its oat in 1983, it has been free to nd its own level on the international market. Privatisation and deregulation have led to changes in the work people do some jobs are lost or shifted overseas as industries cut costs in order to remain competitive while other jobs are created with changing technologies. The nature of employment has changed too no longer can a person assume that a job is for life. Now we expect to change our jobs a number of times during our working lives, moving between different industries and sectors. The nature of the work has also changed; what is now required is workplace exibility with people often working part-time or on short-term contracts. Investment has moved from the traditional industries of manufacturing, agriculture and mining to sectors such as hi-tech industries and nance, although the traditional industries are still very important for Australias economy.

Investing in the future

The Australian Government has made major changes to its taxation system, reformed labour and capital markets and introduced privatisation into the transport and communication sectors. Adoption of new technologies and investment in education has led to high growth and a more adaptable and highly skilled workforce in Australia. There has been a rapid increase in foreign investment to develop its resources and industry. The economy is growing and interest rates are low.

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While globalisation offers great opportunities, its benets are not evenly shared. Many rich countries have committed themselves to ensuring that globalisation becomes a positive force for all the worlds people. The Millennium Development Goals address poverty eradication, education, empowerment of women, child mortality, improving maternal health, the combating of HIV/AIDS and malaria, environmental sustainability and developing a partnership for development. Australia is working to maximise the benets and minimise the challenges of the changing world economy, and to maximise trade to developing countries in its region through trade assistance and its overseas aid program. Australia provides tariff and quota free access for all goods produced in the 49 Least Developed Countries. This is supported by the overseas aid program which focuses on strengthening the capacity of the governments to facilitate open trading systems, encourage investments and economic reform and improve their ability to integrate in the global economy through training of personnel.

Focus activities
1 Which of the following statements reect your personal aspirations and feelings. I always aim to buy the highest quality for the lowest cost. I like to keep up with the latest trends the right brands of clothes, music, electronic gear etc. I think richer, more developed countries have an obligation to help poorer, less developed countries. I feel Australia is doing as much as is reasonable to help support developing countries. I dont think it matters what they pay workers in developing countries if the alternative for them is unemployment. I think it is important to stamp out poverty and unemployment in Australia before we attempt to do the same overseas. I am not concerned about the effects of globalisation on the worlds economies because I cant do anything to change things. When I nish my education I want to have a job that I can stay in as long as I want to and earn a great deal of money. I make an honest effort to be a responsible consumer by buying goods from manufacturers with reputations for treating their workers well. I am interested in learning how I could change my habits to benet the situations of people in developing countries. I am comfortable as I am and dont feel I should make any changes to benet anyone else. 2 Discuss your choices of statements with a partner and write a sentence to summarise the sort of person that appears to be illustrated by your partners list of statements. Can you recognise this person as yourself? What does this description tell you about your attitudes? Discuss your ndings with others in your class. 3 Are there any statements which you would have liked to have answered Yes, but ... or No, but ...? Rewrite those statements so you could agree with them.

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C1 Ofcial sandwich of the intifada?
Article
Undiplomatic Dispatch: Touting Big Macs as Palestinian aid is simply a symptom of globalizing a divided world, says TIME.coms Tony Karon. Globalizations most optimistic boosters are fond of such sunny homilies as no two countries that have McDonalds have ever fought a war. Nice advertising slogan, but its patent nonsense. At the start of last years air war over Kosovo, there were seven McDonalds outlets in Belgrade. And while their artillery and air forces were exchanging re over Kashmir last year, Indians and Pakistanis were still munching on Macs lamburgers in the Indian case, since the chain has eschewed beef there out of respect for Hindu dietary customs. And only weeks before the latest intifada began, the Palestinian Authority was trying to interest Mickey Ds in setting up shop in a series of malls planned for such latter-day hotspots as Kalkilya, Tulkarm, Bethlehem and Ramallah. Far from having them sing in perfect harmony, buying the world a Coke has simply ensured that youre more likely to nd the combatants on both sides of any regional conict today drinking the same soda when in need of a pause that refreshes. And the implications for marketers, of course, can present nightmares for the head ofce. A new promotion by McDonalds in Saudi Arabia, for example, may throw its management into a quiet apoplexy: The BBC reports that Saudi McDonalds franchise holders have announced that during the month of Ramadan, theyll donate 26 cents out of the price of each burger to Palestinian childrens hospitals. While theres nothing controversial about supporting childrens hospitals per se, the move came as a direct response to mounting calls throughout the Arab world for boycotts of American goods to protest US support for Israel indeed, Saudi Arabia has offered treatment in its own hospitals for Palestinian youths wounded in clashes with Israeli troops. McDonalds ofcials would be forgiven for feeling a little uneasy, in light of Burger Kings experience in the region last year: The company was forced under threat of a boycott throughout the Islamic world to withdraw its Whoppers from a food court in an Israeli settlement in the West Bank, but then found itself denounced by pro-Israel groups. But such are the vagaries of globalization. Fast-food franchises are the Marines of globalization, always establishing the rst beachhead in previously closed economies. And that means theyre also accustomed to taking a lot of re. A crowd of Cairo students looking to vent its rage against US support for Israel wont get within a mile of Washingtons heavily fortied embassy, but it wont have much trouble nding an American fast-food outlet as KFC discovered to its detriment last month. And with some 39 McDonalds outlets now operating in Egypt, its hardly surprising that Middle Eastern franchise owners are developing seemingly unorthodox marketing tactics. American fast-food chains have become the lightning rod for anti-US rage worldwide over the past decade. From Bombay to Rome, London to Mexico City, the wide windows of the fast food franchises have become something of a traditional target for crowds protesting everything from the bombing of Serbia or the entry of US corporations into Indias catering market to globalization in general. US embassies may be impregnable, but the wide windows of McDonalds and KFC are a tempting forest of windmills for Nike-clad Quixotes everywhere in the world who want to tilt at symbols of American inuence. Being in the ring line, of course, makes the fast-food chains do their best to t in with the local culture, adapting the menu and the marketing to reect local tastes and concerns. Hence the Indian lamburger or the fact that beer is served in McDonalds in Germany and France. The object of the globalizing corporation is to indigenize itself as quickly as possible. McDonalds may have been forbidden fruit when it rst rolled into post-communist Moscow in 1991, but if all goes according to plan, the next generation will know it simply as a local burger joint where the staff, for some unknown reason, smile more than is the norm in Russia. To indigenize themselves abroad, of course, fast-food chains also face pressure to march in step with the passions of the natives even when that involves biting the hand that reared it. Last year, ads published by McDonalds France used Ugly American caricatures to plant the Golden Arches rmly on the European side of the conict with the US over beef imports. What I dont like about McDonalds France, says an overweight US cowboy in one ad, is that it doesnt buy American beef. The ad species that French McDonalds uses only French beef, to guarantee maximum hygienic conditions Europe is citing health concerns in its bid to ban the imports of hormone-treated American beef. The idea of an American chain restaurant trying to position itself as the ofcial sandwich of an anti-US trade crusade may seem somewhat treasonable, but the logic of globalization suggests that within a generation, corporations and products may lose their national identity. Nobody in Europe thinks of Fords as American cars, quite simply because theyve been made in local plants, according to designs tailored for European markets, for more than half a century. And if all goes according to plan, 10 or 20 years from now an antiAmerican mob may charge right by a McDonalds without as much as lifting a stone. Because like the Ford logo for the protesters of today, the next generation may not know the origins of the Golden Arches. That also means, of course, that Americans abroad lured inside by the familiar iconography may nd the menu, and the attitude, rather foreign.

Source: Time, Wednesday, November 29, 2000. Time Inc. All rights reserved. Reprinted from Time Magazine with permission.

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Globalise me! A students guide to globalisation

Questions
1 Tony Karon gives us some rather ironic insights into transnational marketing ploys in this article. Make a list of the techniques mentioned here that, given the circumstances, seem a little strange. 2 Karon asserts that American fast-food chains have become the lightning rod for anti-US rage. Imagine a situation in a developing country where an angry crowd of demonstrators approaches an American fast-food outlet, intent on destroying it. Write the dialogue which could occur between the leader of the demonstrators and the manager of the fast-food outlet. Ensure you make clear points for each of the characters. At the end of your dialogue, will the fast-food outlet be destroyed or not? Compare your dialogue with others in your class to see if you have omitted any useful arguments on either side. 3 This article talks about the need for transnational corporations or TNCs to indigenize themselves. Since the article was published, the gure of Asterix has replaced Ronald McDonald as a representative of McDonalds in France. Write a denition of the verb to indigenize. Explain how the example given in the article is an example of indigenizing. How does this t with the logic of globalization mentioned in the article? Can you think of an example of McDonalds indigenizing itself in Australia? Suggest further ways McDonalds or other overseas brands could indigenize themselves in this country.

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Money makes the world go around

C2 World poverty
Statistics and cartoon
There is now a lot of evidence to suggest that global poverty has declined. The percentage of the worlds population living on less than US$1 per day has fallen from 39.5 per cent in 1981 to 27.9 per cent in 1990 to 21.3 per cent in 2001.

World Poverty 18202001

1500

Millions of people living on less than equivalent of US$1 per day

1400 1300 1200 1100 1000 900 800 1820 1870 1910 1930 1950 1970 1980 1990 1993 1996 1999 2001

Source: Adapted from The World Bank World Development Indicators 2004.

Source: Cartoon by Nicholson from The Australian, http://www.nicholsoncartoons.com.au.

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Questions
1 The graph opposite shows a recent downward trend after an extended upward trend. What is it about the way the graph is structured, however, that makes the trends seem more extreme? 2 What factors would have inuenced the major changes indicated in the graph? 3 The percentage of the population living on less than $US1 per day is the standardised measure used to compare the level of poverty of countries around the world. Try and work out how much per day it costs you to live (include food, clothing, housing and other non-food essentials). You will need to calculate your share of family expenses. Research the currently accepted Australian poverty line and write a comparison between this gure and your daily costs and make an observation about what it is like to live in poverty. 4 In a small group, discuss how the graph and the additional information in the caption would be portrayed in a newspaper that supported globalisation and in one that opposed it. Collaborate to write a brief article for each newspaper, based on this graph. Include a version of the graph in each article as an illustration. 5 What is the cartoon illustrating which is not shown in the graph? Research the gures to determine whether this is an accurate view.

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C3 Fairtrade certication
Organisation description
Fairtrade Labelling was created in response to the request for trade rather than aid by coffee farmers in southern Mexico. The Fair Trade Association Australia and New Zealand is one of eighteen Fairtrade Labelling Organizations.
Developing Fairtrade Standards: In conjunction with its partners in FLO* and the Fairtrade Foundation, the FTAANZ will support the development of Fairtrade standards in order to introduce new Fairtrade products. Identifying Fairtrade Producers: The FTAANZ contributes to FLOs work in identifying producers who could benet from Fairtrade and by facilitating their access to fairtrade markets in Australia and New Zealand, particularly those producers in the Asia Pacic region. Monitoring of Licensees: The success of the Fairtrade Certication Label depends on consumer condence in the assurance it offers that third world producers receive a better deal. This can only be sustained by a thorough audit of the supply chain to ensure that Fairtrade standards are adhered to. In coordination with the Fairtrade Foundation, the FTAANZ monitors licensees to ensure appropriate use of the Fairtrade certied label in Australia and New Zealand. Raising Awareness: One of the main objectives of the FTAANZ is to raise consumer awareness of the fairtrade label and certied products. To this end, the FTAANZ: works with licensees and their clients (distributors, cafes, retailers) to ensure that sales staff are knowledgeable about the fairtrade certication system; provides producer proles of fairtrade certied producers whose products are being sold on the Australian and New Zealand market to licensees and their clients; develops promotional and educational materials including posters, leaets and other information for use by licensees and their clients. The FTAANZ will continue to work with the Fairtrade Foundation UK to approve and monitor all licensees and the use of the Fairtrade certication label in Australia and New Zealand until the end of 2004. After this time, the FTAANZ expects to have a separate legal entity operating to perform these functions locally. The FTAANZ will maintain an ongoing role in promoting fair trade generally, including products bearing the Fairtrade Label.
*Fairtrade Labelling Organizations Source: Fair Trade Association Australia and New Zealand (FTAANZ): http://www.fta.org.au/fta/. Courtesy of the Fair Trade Association Australia and New Zealand 2003.

Questions
1 The concept of fair trade rather than free trade is that instead of just dismantling trade barriers and inviting a free-for-all struggle for markets, markets offer suppliers a fair, guaranteed price. What are the main consequences of this for both the seller and the buyer? 2 World coffee prices have fallen as regulations have been lifted and output has increased faster than demand. Small coffee growers are being forced to live on smaller incomes and make hard decisions to save money. Research some of the efforts being made to help coffee growers. Discuss the value of these approaches and write a code of behaviour for your own coffee consumption. 3 In a group of eight develop a role-play in which a coffee grower argues for a better deal from the merchant who buys his coffee and sells it on to the caf trade. Set your role-play in a caf with the caf owner and a member of the coffee-drinking public joining in. Pairs take responsibility for one of the characters and decide what arguments they will make and what potential opposition arguments will be needed. Choose four members to act out the roles in front of the whole group. Afterwards, discuss the role-play. Identify the strong and weak arguments that have been used and decide which important points have been illustrated. 4 The number of Fairtrade customers is growing worldwide. Construct a storyboard for a one-minute TV commercial aimed at increasing the patronage of an Australian Fairtrade outlet.

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C4 The WTO
Organisation description
The World Trade Organization (WTO) is the only international organization dealing with the global rules of trade between nations. Its main function is to ensure that trade ows as smoothly, predictably and freely as possible. The result is assurance. Consumers and producers know that they can enjoy secure supplies and greater choice of the nished products, components, raw materials and services that they use. Producers and exporters know that foreign markets will remain open to them. The result is also a more prosperous, peaceful and accountable economic world. Virtually all decisions in the WTO are taken by consensus among all member countries and they are ratied by members parliaments. Trade friction is channelled into the WTOs dispute settlement process where the focus is on interpreting agreements and commitments, and how to ensure that countries trade policies conform with them. That way, the risk of disputes spilling over into political or military conict is reduced. By lowering trade barriers, the WTOs system also breaks down other barriers between peoples and nations. At the heart of the system known as the multilateral trading system are the WTOs agreements, negotiated and signed by a large majority of the worlds trading nations, and ratied in their parliaments. These agreements are the legal ground rules for international commerce. Essentially, they are contracts, guaranteeing member countries important trade rights. They also bind governments to keep their trade policies within agreed limits to everybodys benet. The agreements were negotiated and signed by governments. But their purpose is to help producers of goods and services, exporters, and importers conduct their business. The goal is to improve the welfare of the peoples of the member countries.
Source: WTO website, http://www.wto.org.

Questions
1 Briey describe what the WTO sees as its main function, and what method/s it employs to achieve this. 2 Briey explain what the WTO sees as its main goal. Is there any possible conict between this and what the organisation sees as its main function? 3 The WTO is an organisation that opponents of globalisation love to hate. One of the reasons for this is that the WTO is seen to work at a high level, dealing with the global rules of trade between nations. Many protesters see the rights of workers being ignored in such deals. Research what the WTO is doing regarding the rights of workers. Given the WTOs stated goal, do you think this is sufcient? What more could it do to improve the rights of workers? How might workers be more involved in decision making? Discuss these questions in a group and suggest a balanced way forward. As a whole group, review each suggestion and decide if it is a viable proposition.

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Money makes the world go around

C5 WTO and farm subsidies
Cartoon

Source: Cartoon by Nicholson from The Australian, http://www.nicholsoncartoons.com.au.

Questions
1 Express the message of the cartoon in a single, clear sentence. 2 Who is the cartoon suggesting that the WTO protects? What are the underlying assumptions suggested by the treatment of the protester? 3 Look carefully at the gures in the cartoon. In what way are they stereotypes? What are the dangers of using stereotypes? Why are you likely to nd many examples of stereotypes in cartoons commenting on current affairs? 4 Research the current situation regarding farm subsidies and create a new cartoon.

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Globalise me! A students guide to globalisation

C6 Global scrutiny
Code of conduct
If a company wishes to trade in a global market it must be prepared for global scrutiny. Increasingly, public pressure is forcing transnational corporations (TNCs) to adopt codes of conduct that demonstrate they are socially and environmentally responsible. The code of conduct printed here is drawn from the codes of conduct of a range of companies. Although these companies are involved in a variety of different activities there is a great degree of similarity in their policies and goals.

Sales and marketing ethics

It is our policy to sell products and services on their merits. False or misleading statements and innuendoes about competitors, their products or their services are improper. We will not knowingly create advertising that contains: false or misleading statements or exaggerations, visual or verbal; testimonials that do not reect the real opinion of the individual(s) involved; misleading price claims; claims that distort the true meaning of statements made by professional or scientic authority; statements, suggestions or pictures offensive to public decency or minority segments of the population.

Workers rights and responsibilities

The work environment must be free of harassment, discrimination and victimisation. We will maintain a healthy, safe work environment. Employees must alert their supervisor or manager to any situation which is, or may potentially be, a health or safety hazard. We will ensure our working hours per week, wages and overtime pay practices will comply with the standards set by law or, in the absence of a law, address humane, safe and productive working conditions. While permitting exibility in scheduling, we will identify prevailing local work hours and seek business partners who do not exceed them except for appropriately compensated overtime. While we favour partners who utilise less than 60-hour working weeks, we will not use contractors who, on a regularly scheduled basis, require in excess of a sixty-hour week. Employees should be allowed at least one day off in seven. Each employee will be provided with all legally mandated benets. These may include meals or meal subsidies; transportation or transportation subsidies; other cash allowances; health care; child care; emergency, pregnancy, or sick leave; religious, or bereavement leave; and contributions for social security and other insurance, including life, health and employees compensation.

Companys relationship with society

We will support long-term, sustainable relationships with communities in need. We will pay special attention to those minority groups, women and disadvantaged peoples who are socially and economically marginalised. Ideas and proposals for community involvement initiatives are invited from our staff, organisations local to our workstations and by key charitable organisations. The company has a charitable donations policy that is implemented by a charities committee.

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Money makes the world go around

Environmental responsibilities
We will use environmentally sustainable resources wherever technically and economically viable. We are committed to achieving the best possible environmental performance and, in order to achieve this standard and seek continuous improvement, we will include action plans and measurable environmental targets in our business plans and in personal incentive arrangements at all location levels.

Questions
1 Examine the statements in the code of conduct and outline the possible advantages and disadvantages for a company. Committing yourself to a written code of conduct could prove to be a double-edged sword and harm a company as much as it could help it. Discuss. 2 In a small group, write a code of conduct for a mythical TNC that produces plastic piping for farmers and assembling components made in a number of different countries. First you should decide what areas will be covered in your code of conduct, then write the specic points. Aim for a code with between 10 and 15 points. Remember that you are writing this code for a TNC, so it would have to apply globally. 3 The major criticisms aimed at codes of conduct are that they have loopholes and are not specic enough. Read carefully through the examples provided here are there any that contain what you would describe as a loophole or a lack of specicity? 4 Search the Internet for a TNC website that contains the companys code of conduct (food chains, clothing and sports equipment producers are a good place to begin). Read the code carefully then write a brief critique of it, commenting on its fairness, its degree of responsibility, the presence of loopholes and any vague wording.

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C7 Child labour
Photos

A ten-year-old boy, who has been aficted by polio, receives about four cents for each hand-stitched soccer ball he makes. Despite efforts by the Fdration Internationale de Football Association (FIFA) to outlaw child labour there are still an estimated 10,000 children employed by football makers in India. Source: APL.

A rally against child labour by the South Asian Coalition on Child Servitude (SACCS) included former child labourers. It aimed to raise awareness about the issues of child labour and gain commitments from politicians to eliminate the problem in the lead-up to the 2004 national elections. Source: APL.

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Money makes the world go around

Questions
1 Child labour is not a new phenomenon, but for families facing the massive burden of debt, it may be the only option for survival. It is a greater problem when the work is exploitative through poor working conditions. Increasing awareness of the extent of exploitative child labour and its impact on the health of children has led countries to change their laws and some products being certied to be free from child labour. What are your views on child labour and in what circumstances, if any, should it be allowed? 2 Comment on whether you think young children are being exploited when they are involved in political action such as street marches. 3 Visit the website of the Global March Against Child Labour (http://globalmarch.org/). Read about child labour and follow links to other sites. Also skim read the United Nations Declaration of the Rights of the Child (http://www.unicef.org/crc/crc.htm) and the Universal Declaration of Human Rights (http://www.un.org/Overview/rights.html) to nd out what the signatory countries to these United Nations documents have committed themselves to regarding child labour. Write an informative report entitled The State of Child Labour at the Beginning of the Twenty-rst Century. 4 Iqbal Masih became a celebrated activist against child labour and then a martyr. Research Iqbals achievements (http://childrensworld.org/engiqbal/index.asp) and those of other activists, such as Craig Kielburger (http://www.freethechildren.org). Use your research to suggest things young Australians could do to help reduce exploitative child labour. You could present your ndings as a poster for young Australians. 5 If you have a part-time job analyse it (or one of your friends part-time jobs) to answer the following questions. Are you paid the same wage as non-student workers? Have you been given clear guidelines of what is expected of you and how you should be treated by your employer? Does your employer meet obligations about working conditions? (How are your conditions protected? Is there an award covering your working conditions?) Why does your employer employ part-time workers like you? Do you feel you are fairly treated by your employer? 6 To discover how your daily life compares with that of a child labourer, visit the International Labor Organizations interactive site (http://www.us.ilo.org/teachin/ilokids/dayinthelife.cfm). Use this information to draw up a representative timetable on a poster to illustrate the huge differences between the two lives.

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Globalise me! A students guide to globalisation

C8 Branding a product
Logos
Logos are an integral part of marketing and advertising in todays world.

Sources: Courtesy of QANTAS; Nike and Swoosh Design logo are trademarks of Nike, Inc. and its afliates. Used by permission; Body Shop logo used in Australia with permission The Adidem Group; Holden Ltd; courtesy Channel 7; other logos courtesy of their companies.

Questions
1 Logos used by transnational corporations (TNCs) allow them to brand their products so they are instantly recognised throughout the world. Which of the above logos actually belong to TNCs? 2 Through discussion and observation, come up with a list of requirements for an effective logo. When you are satised with your ndings, design a logo for your school, club, team or town. Compare your result with others in the class. 3 TNCs often back up their logo with a slogan or jingle. Do any of the logos displayed here have slogans or jingles that go with them? Find some examples of both slogans and jingles and list what you think are their general characteristics. Compare your ndings with others and construct a denitive list. Using this list, compose both a slogan and a jingle to go with the logo you designed in question 2. 4 A very important characteristic of a logo or slogan is that it needs to be instantly recognisable. This means that any distortion or malicious use of them can be just as instantly capable of making a point against the company or business. For example, opponents of the inuence in sport of big business have produced a doctored photograph of Tiger Woods with Nikes swoosh as a smile, and there is a widely-publicised cartoon which shows Ronald McDonald shrewdly replacing a thin new moon with McDonalds golden M. There are even websites specialising in ridiculing logos. In small groups, discuss such distortions and collect examples. Perhaps you could attempt some examples of your own. 5 Do a logo audit of your own life and consider the following. What logos do you instantly recognise? Do you actively seek out goods with specic logos? Do you display specic logos, e.g. on T-shirts, car windows, school bags etc? Use your ndings to write a report about the importance of logos in the life of teenagers.

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C9 Brand it like Beckham
Article
The worlds best-known sports star follows the money. Heres a tale for our times. Last week Ali Abbas, the 13-yearold Iraqi boy who lost his arms during an air raid on Baghdad, continued his recuperation in a hospital in Kuwait, wearing a T-shirt emblazoned with a picture of his hero, an English soccer star who was about to start a promotional tour of Japan after having just been traded to a Spanish club in a deal vital to the fortunes of a German shoe company that merited an editorial in the New York Times and that was brokered by a sports agency owned by a company from San Antonio, Texas. Talk about globalization. David Beckham, the soccer player in question, is almost certainly the best-known sports star in the world. He doesnt make the most money in last weeks Sports Illustrated, soccer guru Grant Wahl reckoned Beckham, 28, earns close to $30 million a year, which is way less than the earnings of golfer Tiger Woods and Formula One racing driver Michael Schumacher but Beckhams agency, S17X, which is owned by Clear Channel, the radio and concert giant, hasnt done badly by the boy. It is Beckhams name thats on the title of one of the sleeper movie hits of the year, Beckhams face that sells everything from motor oil to cell phones to Japanese chocolates, and a likeness of Beckhams body to which monks in a Thai temple bow in veneration. In Britain, Beckham and his wife Victoria, the former Posh Spice of the Spice Girls, have replaced Princess Diana as the staple of celebrity culture, adored by young and old, men and women, straight and gay. Last week ace trend spotter Marian Salzman of the advertising agency Euro RCSG Worldwide, identied Beckham who likes to say how comfortable he is with his feminine side and who has been known to wear a sarong as the epitome of metrosexuality, which, since you ask, is the characteristic of heterosexual men who spend time and money on their appearance and enjoy shopping. Hes a pretty good soccer player too. But it isnt just for his skills that Real Madrid paid Manchester United, the club for which Beckham played since he was 14, a sum of $41 million for his services. Europes leading soccer clubs are becoming true global brands. Measured by its value on the open market, United is the most successful sports franchise in the world; Rupert Murdoch tried and failed to buy the club for $1 billion in 1998. With a worldwide fan base in August, its scheduled to play exhibition games before sold-out crowds in the US and enormous brand recognition in soccer-mad Asia, United has leveraged its stars to sell merchandise from Berlin to Bangkok. But in strict sporting terms, United is a lesser club than Real. Since the European club championship was inaugurated in 1956, United has won just twice. Real has lifted the trophy a record nine times. With Beckham on board, Real hopes to be able to market itself all over the world. (Reals website already conveniently has English and Japanese versions.) Theres more to this story than global branding. Just like the NBA, in whose games players from 34 nations appeared last season, European soccer leagues now recruit their stars internationally. And the fact that they do sheds more light on European economics and society than you will ever get from reading the new draft of a constitution for the European Union. Until quite recently, soccer in Europe was organized mainly on national lines. There were strict limits to the number of non-nationals a club could eld in a game. In 1995 a decision of the European Court of Justice invalidated those protectionist rules, and since then, the best clubs have snapped up talent from all over the world. At Real, Beckham will play alongside established stars from England, Portugal, France, Brazil and the Congo. The managers of two of Englands leading soccer clubs, Liverpool and Arsenal, in London, are both French. Just as Dallas Mavericks fans cheer for Dirk Nowitzki (German) and Steve Nash (Canadian), so Madrilenos and Mancunians dont give a hoot about the nationality of a star, so long as he is playing for Real or United. Thats indicative of a larger trend. In social matters, Europeans every day are becoming more European and less hidebound by national traditions they worship the same sports stars, they drink the same wines, they dance to the same electronic beats, they vacation on the same beaches. Things go wrong only when attempts are made to craft European institutions and a European identity from the top down; a recent poll in Spain found that only 1% of respondents had any idea what the convention on a European constitution was meant to be doing. Somewhere, theres a lesson in that for Europes leaders. Meanwhile, a note to Reals marketing department: Ali Abbas needs a new shirt.

Source: Time, 23 June, 2003. Time Inc. All rights reserved. Reprinted from Time Magazine with permission.

Questions
1 Who is the likely audience for this article, and how can you tell? You might begin by considering such things as its origin, vocabulary choice, tone and sentence structure. 2 At the conclusion of the article, the writer hints at a lesson for European leaders. In a small group, discuss what this lesson might be, evaluate it in terms of its impact, then consider if a similar lesson might apply to Australian leaders.

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Globalise me! A students guide to globalisation

C10 Globalisation: global opportunities and global responsibilities

Speech
Today, I want to highlight the benets globalisation brings and how the Government is ensuring Australians and our regional neighbours can capture these gains.

But rst, what do we mean by globalisation?

In his recent book, Globalization and its Discontents Joseph Stiglitz denes globalisation as ... the closer integration of the countries and peoples of the world ... brought about by the enormous reduction of costs of transportation and communication and the breaking down of articial barriers to the ows of goods, services, capital, knowledge and (to a lesser extent) people across borders. More simply, The Economist magazine says globalisation is ... what happens when technology allows people to pursue their own goals and they are given the liberty to do so. Seen in this way, globalisation is just an extension of the personal freedoms and free markets we enjoy in our own economy to the whole world. By extending our freedom to trade, invest, travel and work beyond national borders, we can multiply, many times, benets we gain from free local markets, transactions and movements. Articial barriers to trade, investment and people movements are relatively new in human history. The world has been much more globalised in previous centuries than in the recent past. For example, in 1913, global exports reached almost 8 per cent of world GDP. But with the trade barriers erected during the Great Depression, total exports shrank to under 5 per cent of world GDP by 1950. After World War II, governments realised the folly of these policies and how they had contributed to the War. Subsequently, a core group of governments established the Bretton Woods institutions. Through the General Agreement on Tariffs and Trade, forerunner of the World Trade Organization, and the International Monetary Fund, governments agreed to bring down trade and nancial barriers between countries and build a fairer and more rules-based international trading and investment environment. By 2000, lower trade barriers and rapid falls in transport and communication costs pushed world exports to 14 per cent of world GDP.

How has Australia fared in a globalised world?

Australia was always more open to international trade than most countries. Back in 1913, Australias exports were 13 per cent of GDP when the world average was only 8 per cent. However, inward looking, protectionist policies caused our ratio of exports to GDP to slip behind other countries in the 1960s and 1970s. But in abandoning protectionist policies and introducing a range of other economic reforms, Australian governments have put Australia on the way back to the top. The Government has overhauled comprehensively Australias taxation system, reformed labour and capital markets and introduced privatisation into the transport and telecommunications sectors.

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Money makes the world go around

By 2002, Australia boasted the 4th highest real GDP per person among the worlds major industrialised economies. And in 2001, Australia had the 4th highest Human Development ranking in the world. From 1985 to 2002, freer trade and investment and other economic reforms helped raise Australians real income per person by over 55 per cent from $23,000 to $36,000. So Australia is a prime example of a country that has gained from globalisation.

Australias role in spreading the gains from globalisation

So what can Australia do to help spread the gains from globalisation? Clearly, the rst step to ensuring a country and its population gains from globalisation is through strong economic and legal institutions, improved market efciency and upgraded infrastructure, education and health delivery. Democratic and accountable Government is critical. The strength of Australias own institutions means we are well placed to help others improve their institutions and their approaches to key policies. The Government has increasingly focused its development assistance expenditure towards governance programs in ve key areas: improved economic and nancial management; strengthened law and justice; increased public sector effectiveness; development of civil society; and strengthened democratic systems. Indeed, 21 per cent or $370 million of our development assistance expenditure is directed towards governance programs. With stronger institutions, countries are better placed to introduce the policies and reform vital to securing the opportunities of globalisation. One of the main policies developed, and developing countries can introduce to spread the gains from globalisation, is to reduce their trade barriers.
Source: Globalisation: Global opportunities and global responsibilities, Speech by The Hon Alexander Downer, MP, Minister for Foreign Affairs, at the launch of the Monash Institute for the Study of Global Movements, 24 July 2003. Copyright Commonwealth of Australia, reproduced by permission.

Questions
1 Write a brief (fewer than 100 words) paraphrase of this speech extract, making sure you clearly express the intentions and main points of the original. 2 This is an extract from a political speech. But even without knowing this fact, there are clues in the language as to its origin. In a small group, analyse the language and content of this extract and compile a list of features which characterise it as a political speech. You might like to consider such things as vocabulary, sentence length and structure, content and use of pronouns. 3 The Minister used the terms globaphile and globaphobe in a 1997 speech (Globalisation or Globaphobia: Does Australia have a choice?). What do you think he meant by these terms? Why do you think these catchy terms are not widely used? What terms are used to convey ideas for and against globalisation?

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Globalise me! A students guide to globalisation

Chapter questions and activities

1 Make a list of the advantages and disadvantages Australians could expect to experience as a result of increased globalisation of the economy. Use your list as the basis for writing a well-reasoned speech or convincing essay supporting or attacking such an increase. 2 Australia is denitely a developed nation. What does development mean in such a context and is it a good thing? What is meant by the term standard of living? How is a persons standard of living measured? How can you raise a persons standard of living? What moral responsibilities should we feel towards developing nations, and what scope is there for individual Australians to act on these responsibilities? 3 Unemployment is an important social consequence of the globalisation of trade. Draw a diagram or comic strip to show how unemployment can occur in a developed country like Australia when a company moves its business offshore. Show the reasons for making such decisions and the consequences of them, indicating both positive and negative consequences. 4 Debate the topic: Transnational corporations are all about prot at the expense of social responsibility. 5 Write a short paragraph describing the difference between free trade and fair trade, then, in a second paragraph outline how free trade can also be fair trade. 6 Can you identify any other specic social groups that might be advantaged by a countrys efforts to become involved in the global economy?

Other resources for further research

Websites
AusAID http://www.ausaid.gov.au/publications/pdf/globalisation_report.pdf Globalisation and Poverty: Turning the Corner. http://www.ausaid.gov.au/research/pdf/globalisation2.pdf Globalisation, trade and development, What is left for aid to do? Australian Department of Foreign Affairs and Trade http://www.dfat.gov.au/. Clean Clothes Campaign http://www.cleanclothes.org/ improving working conditions in the garment and sportswear industry worldwide. CorpWatch http://www.corpwatch.org/ news and analysis about corporate activities and inuence. International Fair Trade Association http://www.ifat.org/ a global federation promoting fair trade, social justice, and the sustainable livelihoods of third world farmers, artisans and craft producers. Millennium Development Goals http://www.un.org/millenniumgoals/ outlines the Millenium Development Goals and current progress in attaining them. World Bank http://www.worldbank.org/ loans, advice, and resources to developing countries. http://www.wto.org/ deals with the rules of trade between nations. World Trade Organization

Print
Ellwood, Wayne 2001, No nonsense guide to Globalization, Verso. Moore, Mike 2003, A world without walls: Freedom, development, free trade and global governance, Cambridge University Press. Sheil, Christopher (ed) 2003, Globalisation: Australian Impacts, UNSW Press. Simpson, Kate, Ensor, James and Lowe, Sarah 2001, The globalisation challenge: Australias role in a rapidly changing world, Oxfam Community Aid Abroad. Suter, Keith 2000, In Defence of Globalisation, UNSW Press.

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Money makes the world go around

Video
Rip Curl A Case Study (video), 2001, Video Education Australasia, (39 minutes). In this case study, we see how globalisation forced Rip Curl to manufacture overseas; was pressured to go public in order to increase nance for expansion; and addressed rapid change and cultural differences. Globalisation and Free Trade, at What Price?, 2004, Video Education Australasia. This program examines the organisation of international trade between nations, and how globalisation and free trade has transformed the operation of economies around the world. Impacts of Globalisation, 2004, Classroom Video (22 minutes). This video investigates economic growth and development and contrasts in levels of development in the global economy as outlined by the United Nations Human Development Report, and reasons for the differences. The Global Economy, 2003, Classroom Video (20 minutes). Case studies about how globalisation affects the daily decisions of a farmer; trade and nancial ows, free trade and protection; trading blocs and agreements; the EU and World Bank.

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Globalise me! A students guide to globalisation