Global Economy of the 90s

Global Economy of the 90s

• When speaking about the global economy in the 90s, the two large points one has to cover are:
  • Government trading alliances:
    • NAFTA
    • EU
  • Multinational Corporations

Trading Blocs

NAFTA

North Atlantic Free Trade Agreement

• An agreement between the United States, Canada, and Mexico that attempted to make cross-nation trade and investments easier.
• Implemented January 1st, 1994
• Its main effect was the removal of most tariffs between the US, Mexico, and Canada.
• Additional effects included:
  • Strengthening intellectual-property laws,
  • Creating labor and environmental safeguards, and
  • Putting a system in place to resolve disputes

EU

European Union

• The European Union is mostly of interest in its establishment of the "Single Market" in Europe.
• The Single Market is defined by four freedoms:
  • Movement of goods,
  • Movement of services,
  • Movement of people, and
  • Movement of money
• The introduction and adoption of the Euro in 1999 further standardized the European economy.

Multinational Corporations

Multinational Corporations

• A multinational corporation can be defined as a corporation that operates across national borders.
• With NAFTA and the European Single Market, as well as the internet becoming more widespread, it started becoming significantly easier for companies to operate internationally.
• This would often "squash out" local companies working in similar fields as the larger, expanding companies.
  • Either the local company would be bought out and assimilated into the corporation, or
  • The larger corporation's greater experience and efficiency would simply run the smaller, local company out of the market

• Adidas
• Nintendo
• Ford Motor Company
• Pepsi
• Nestle