Globalisation is a process of integration between the economies of most countries in the world that has developed especially since the end of World War II. The term globalisation refers to a set of phenomena, among which the most important are: increased international trade, the spread of multinational companies; financialisation of the economy. The phenomenon of globalisation is investing today's world, turning it into a gigantic market, where goods produced by industries of developed countries circulate everywhere and the mass media spread troughout the word the same patterns of behaviour and the same values.


The raw materials are bought and sold on the world market, as they are distributed all over the world the final products. The entire planet is now a kind of huge market, both in terms of the movement of goods that, once produced within a single state, can be exported to all over the world, both in terms of the international division of labor, which consists in a form of specialisation of production in the various countries. The international exchange is based on the fact that not all states have the same resources available: there are mineral-rich countries such as the USA, Australia and South Africa, while others have to import raw materials to provide to their industries, as is the case for Japan. In general, the underdeveloped countries export raw materials and import low-cost industrial products, while the industrialised countries of the northern hemisphere buy raw materials and export of goods manufactured in their industries: the gains are much higher for the richer countries that sell goods of higher added value, namely goods whose selling price is determined, rather than by the cost of raw materials, by skilled labor that was used to produce them.


World trade between Member States may be governed by two opposing principles: protectionism and free trade, or liberalism. Protectionism is a series of measures that the State take to limit imports of goods from other countries, in order to protect domestic production from foreign competition. The FTA is realised when there is no restriction on the importation and exportation of goods. Although the majority of Member support at the level of principle free trade and has signed international agreements in favour of the international movement of goods, in reality, each state maintains protectionist measures in favour of their industries.


If the exchanges take place between countries that have more or less the same level of development, through free trade is fostered international specialisation and economic growth of all countries concerned. This means that each country can devote to produce those goods for which it has available raw materials, technology and manpower prepared. For example, a state that enjoys a good climate, fertile soil and a tradition in agricultural work, can produce especially wheat or other grains for domestic consumption and for export, while it may import machinery, which are useful for both manufacturing industrial and agricultural ones, from industrialised countries. However, if the exchanges take place between countries at different levels of development, the most developed countries draw the greatest advantage: they export mainly industrial products, whose production they are specialised and in which they have the technological knowledge; and importing raw materials and agricultural products from the least developed countries, which will have great difficulty in giving birth to an independent industry.


Multinational companies, play a leading role in the global economy, in addition to states. Multinational companies are companies that operate in areas of high economic development and in the advanced sectors of industry, they have a turnover of considerable size and frame their production activities in several countries, where economic conditions are better. The ownership and management belong to the parent company, which is called “holding”, on which firms can operate in many different fields: for example, a corporation can have farms, food industry, commercial distribution chains; but can also have completely different activities in other sectors, such as chemical or mechanical. The multinationals have grown to such an extent that many of them have budgets greater than those of the states where they operate, which may influence the economic policy to their advantage. In addition, taking advantage of the different systems of law in force in the countries where they extend their business, they manage to escape tax control, thus disposing of very heavy sums, outside of any control, other benefits include the use of cheap labor, enlargement of the sales market, and so on. Corporate interests may conflict with those of the State in which they operate and those of the world community. This happens, for example, when certain production activities affect non-renewable natural resources, such as forests, damaging the environment and impoverishing it in the long run, the host country. Among the side effects that these economic changes produce is also exporting a model of its life in Western society and therefore comply with the habits and mentality of large areas of the population. Currently there are more than 600 multinational companies, operating in more than 40 countries, and about 2,000 others, operating in more than 5 countries. The largest number of multinational companies is the U.S.: more than 200 companies among the top 500, with a turnover of more than 3,000 billion dollars and more than 12 million employees. This was followed, at a distance ever closer Europe and Japan.


At the end of World War II, the United States was the only country able to provide to the European countries and Japan, devastated by the conflict, goods and services for consumption. It recorded a sharp increase in exports of goods from the United States, and since these goods were paid in U.S. dollars, this coin became very popular, and its market value increased. In 1944, the Bretton Woods conference, countries with a market economy they chose a new exchange rate system, based not on gold, but the U.S. dollar: the value of each national currency was fixed in relation to the U.S. currency and reserves Monetary were accumulated in that currency. In the same conference were also created two new institutions, the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), also known as the World Bank. The Bretton Woods exchange rate system was in crisis during the sixties and in 1971 it was abandoned in favour of a partially flexible exchange rate system. During the Seventies, partly because of the oil crisis, the U.S. dollar depreciated against the mark, the yen and the Swiss franc.


Over the past two decades, exchanges and other financial markets have spread all over the world thanks to the development of computer technology. These changes have encouraged speculators, investors who buy or sell large amounts of securities or money solely for financial gain, trying to anticipate changes in supply and demand. Some banks and investment companies have become so rich that they can themselves affect the performance of the financial market, which then depends less and less by changes in the real economy, that is, from production and investment. Financialization of economy is a phenomenon that particularly affects countries with developed market economy, namely the countries of North America, Western Europe and Southeast Asia.

Effects of financialization

Following investors actions, financial markets and exchange rates between the various currencies become extremely volatile, namely variables in even very short periods and without the possibility of being expected. As was noted on early 1974 by James Tobin, the volatility of exchange rates is an important limitation to the autonomy of national economic policies. Individual countries, to prevent speculation affects its currency and that investors sell government bonds en large quantity, they are forced to follow a certain policy in setting the interest rate, which must be very high in order to attract investors. This can result in negative consequences, since the payment of debt commits a large portion of the national income at the expense of social and employment policies. To limit the damage that financial transactions may have on the economies of the countries most vulnerable to speculation (and especially in developing countries), in 1972, James Tobin proposed a tax on financial speculation. Accepted without enthusiasm in the seventies, at a time of great euphoria of the markets, in the nineties the Tobin Tax has been revived and many scholars and international organisations, and some government (for example the French one), they are evaluating the applicability. THE WTO The WTO or World Trade Organisation, established in 1993 as a result of multilateral negotiations under the General Agreement on Tariffs and Trade (GATT), to promote and strengthen the free world market. Formally operational from 1 January 1995, the WTO as an international forum existed since 1955 when it was created as a result of the Bretton Woods system. Only the dissolution of the GATT 1994, the WTO has officially taken place, however, managing and controlling the twenty-eight free trade agreements contained in the final report of the Uruguay Round, the monitoring of the global trade rules and deciding with regard to trade disputes referred to his judgment. Its structure includes a General Council consisting of the ambassadors to the WTO of the 76 member states and the Council of Ministers, which meets every two years, and appoints the Director-General. Renato Ruggiero, former Italian Minister of Commerce, has taken the first position of general manager full time since 1 May 1995. For the settlement of disputes in commercial matters was instead scheduled a judging committee, composed of officials of the organisation, whose decisions are appealable turning to another committee of the WTO so that judgement is final and binding. Unlike the GATT, the WTO, while remaining independent by the United Nations, is formally constituted entity, whose rules are legally binding on member states, also provides a framework for the regulation of international trade, expanding the scope of GATT provisions to include trade in services, the rights to intellectual property and investment. It is believed that the agreements reached in the GATT world trade will lead to an increase in the annual rate of at least 755 billion U.S. dollars by 2002, raising the annual income of the world at about 235 billion dollars. The organisation's headquarters is located in Geneva. The GATT has been signed in 1947 at the Geneva Conference on Trade representatives from 23 countries. The most important result of this agreement was the formation of an international forum dedicated to the expansion of multilateral trade and reconciliation and establishment of international commercial disputes. The Treaty replaced the proposed formation of an international trade organisation of the United Nations, which was never born because of the tensions generated by the Cold War. Entered into force in January 1948, the treaty was accepted by a growing number of countries: in 1988, 96 nations, representing a major part of the commercial world, had acceded to the GATT in its own right, while others took part in different forms. In 1947 the members of the eight rounds of GATT have argued (in English round) of trade negotiations. The seventh conference, the Tokyo Round, concluded in 1979, the eighth, the Uruguay Round, concluded in 1986 with three years behind schedule in 1994, thus sanctioning the replacement of the GATT with the World Trade Organisation (WTO ).


The members of the GATT studied and proposed strategies to minimise old and new trade barriers, including the reduction of tariffs and import quotas and the abolition of preferential trade agreements among member states. The tariff concessions were negotiated on a reciprocal basis, the grant related to a product was then applied to all the Contracting Parties, even if a country could request a safeguard clause that would allow him to revoke the license if the original tariff reduction would cause serious damage to its industry. Basic rule of GATT was the principle of non-discriminatory trade relations among member states, and this principle was implemented mainly through the most-favored-nation clause, by virtue of which the most favourable treatment accorded to a member country of the GATT is automatically extended to all others.


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