Case: Crafts sold internationally via online platforms.

How it reflects globalization

• Integration of markets through e-commerce and communication technology.
• Cross-border exchange of goods and cultural products.

Benefits

• Access to larger markets and higher incomes for artisans.
• Exposure to international customers helps improve quality and design.

Risk

• Increased competition and dependency on platform fees or foreign demand.

Case: International books become available locally.

Cultural Illustration

• Diffusion of ideas, languages and cultural perspectives through literature.

Positive Social Impact

• Broader knowledge, tolerance and exposure to global thinking.

Negative Social Impact

• Local cultural forms may be overshadowed if global content dominates.

Case: Factory uses internet to manage inventory and export.

Technological Factors

• Affordable internet and cloud services for inventory management.
• Digital payment gateways facilitating cross-border transactions.

Policy Factors

• Trade liberalisation reducing export/import restrictions.
• Incentives or export promotion schemes by the government.

Case: Removal of quotas on electronics imports.

Immediate Effects on Prices

• Prices of imported electronics likely fall due to greater supply and competition.

Immediate Effects on Domestic Firms

• Domestic producers may face pressure and might need to lower prices or improve quality.
• Less efficient firms could lose market share or close down.

Case: Toy production fragmented across three countries.

Reasons

• Cost advantage: Cheaper production costs in different stages.
• Specialisation: Each country has specialised skills or raw materials.
• Trade agreements making sourcing cheaper across those countries.

Risk for Country C (Assembly)

• Vulnerability to supply disruptions upstream causing job losses in assembly.

Case: Country specialises in low-value textile stitching.

Long-term Strategies

• Invest in skill development and design capabilities.
• Encourage local firms to adopt better technology and branding.
• Promote linkages with buyers for higher-value orders and compliance standards.

Case: Buyer insists on ISO certification for suppliers.

Why Certifications Matter

• Assure standardised quality and acceptability across markets.
• Reduce trade friction and build buyer trust.

Effects on Supplier

• Initial investment in processes and training may be required.
• Once certified, supplier can access more international orders and better prices.

Case: Orders moved abroad for cost reasons.

Government Actions to Retain Firms

• Provide incentives like tax breaks or infrastructure support.
• Offer skill upgrading and subsidies for technology adoption.
• Improve ease of doing business and reduce compliance costs.

Case: Cheaper imports affecting local farmers.

Short-run Measures

• Provide temporary price support and procurement guarantees.
• Offer immediate credit and relief packages to affected farmers.

Medium-run Measures

• Invest in storage, cold chains and market infrastructure to reduce post-harvest losses.
• Encourage crop diversification and value addition (processing, branding).

Case: Rising trade deficit situation.

Fiscal Policy Responses

• Reduce non-essential public spending to limit import-driven consumption.
• Incentivise exports through subsidies or tax rebates.

Trade Policy Responses

• Promote competitiveness of export sectors via skills and technology.
• Negotiate better market access and diversify export destinations.

Case: WTO dispute outcome forces tariff reduction.

Responses

• Use transitional adjustment assistance to support affected workers and firms.
• Invest in competitiveness—training, technology and market linkages.
• Pursue targeted social protection and short-term safety nets.

Mention legal options: appeal process and negotiation within WTO for compensation if applicable.

Case: Formation of regional trade bloc.

Benefits

• Increased intra-regional trade and economies of scale.
• Stronger bargaining power in international negotiations.

Drawbacks

• Risk of trade diversion—benefitting member over more efficient non-members.
• Possible unequal benefits if larger members dominate.

Case: Rapid expansion of IT hub due to outsourcing.

Economic Gains

• Job creation in skilled services and rise in incomes.
• Growth of supporting sectors: real estate, transport, hospitality.

Social Challenges

• Rising urban inequality and pressure on infrastructure.
• Displacement of local communities and rising living costs.

Case: Farmers affected by trade deals reducing support prices.

Measures for Fairness

• Implement minimum support prices and procurement for staple crops.
• Provide compensation and transitional assistance where needed.
• Promote value addition and market access for exportable agricultural products.

Case: Call for labour standards in trade pacts.

Reasons for Labour Rules

• Protect workers from exploitation and ensure fair wages and conditions.
• Prevent a 'race to the bottom' where firms relocate to countries with weakest protections.

Implementation without Losing Competitiveness

• Phased implementation with capacity-building and support for firms to comply.
• Provide incentives for upgrading productivity alongside labour protections.

Case: Domestic shoe maker hit by cheap imports.

Short-term Rescue

• Provide temporary subsidies or low-interest loans to manage cash flow.
• Support with marketing and finding niche domestic or export markets.

Long-term Competitiveness

• Upgrade technology and focus on quality, design and brand-building.
• Train workforce, improve supply chains and explore higher-value segments.

Case: Uneven regional benefits from globalization.

Policies for Balanced Development

• Invest in connectivity (roads, rail, digital) to integrate lagging regions.
• Provide incentives for firms to set up in interior regions (tax breaks, land).
• Enhance education and skills training locally to attract industries.

Case: Concern about protecting infant industries post-FTA.

Safeguard Measures

• Transitional tariff periods allowing gradual opening.
• Temporary quotas or safeguards in cases of sudden import surges.
• Access to technical and financial assistance for upgrading industries.

Conclude: Combine temporary protection with plans for competitiveness to avoid long-term dependence.