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Table of Contents
Letter From the Secretary General............................................................................................. 3

Letters From the Committee Directors.......................................................................................4

Introduction.................................................................................................................................6

Committee Information............................................................................................................... 6

Introduction to Globalization...................................................................................................... 7

Multilateralism and Economic Integration..................................................................................8

Economic Globalization...................................................................................................................8

Sources of Globalization................................................................................................................. 9

Multilateralism..................................................................................................................................9

Case Study: Brexit......................................................................................................................... 10

Trends of Economic Globalization................................................................................................ 11

Case Study: Brazil..........................................................................................................................12

Free Trade..................................................................................................................................14

Introduction.................................................................................................................................... 14

Benefits of Free Trade...................................................................................................................16

Case Study: China......................................................................................................................... 16

Globalization and Inequity Among Nations................................................................................. 18

Trade Liberalization and Inequality Within Nations.................................................................... 19

Worker’s Rights......................................................................................................................... 20

Introduction....................................................................................................................................20

Purely Economic Impact............................................................................................................... 20

The Global Economy..................................................................................................................... 22

Case Study: Maquiladora............................................................................................................. 22

Migrant Workers............................................................................................................................ 24

Case Study: The Refugee Crisis.................................................................................................. 27

Bloc Positions............................................................................................................................28

Developing Countries....................................................................................................................28

Developed Countries.................................................................................................................... 28

Questions A Resolution Must Answer (QARMAs)....................................................................29

Position Paper Requirements................................................................................................... 29

Sources..................................................................................................................................... 30

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Letter From the Secretary General
Dear Delegates and Faculty Advisors

On behalf of my secretariat, it is our pleasure to welcome all of you to Liceo Naval Almirante
Guise Model of United Nations 2023 conference!

My name is Mireya Zelada and I´m the Secretary General for this year, position I´m very
grateful for. Also, I study my last year of school with the IB program. It is very exciting for me to
host this year conference for my school and continue the legacy of the team. I consider myself
a very friendly, optimistic and skillful person, characteristics that have helped me develop in
MUN.

Two years ago, I discovered what Model of United Nations was. Our institution was carrying out
a simulation among the naval high schools and my civics teacher asked me to participate in it.
At that time, I didn't understand the complexity of preparing for this type of debate, so it scared
me a lot. However, during the first day I realized that it was a space full of people interested in
forming ties and providing solutions to conflicts. From that moment MUN became an essential
part of my life; each conference I have attended has taught me new problems and ways to
solve them, as well as different perspectives on each situation. In 2022, many of my close
friends decided to join the team and they are the ones who today help me lead the team and
prepare this conference.

This edition of LNAGMUN seeks to create an environment in which you feel comfortable,
whether you are experienced or new to the model. We expect fluid debates, full of respect,
diplomacy, but above all, passion. Have fun and enjoy every moment of the conference, get
experience and dedicate yourself to learning about what you discuss, each topic of each
committee has a great importance at a global level and they need effective solutions.

If I can give you any advice from my years of experience in MUN, it is to give your maximum
effort in each session, do not give up, if something characterizes the United Nations, it is that
everything can change in a matter of seconds. Success is achieved by trying again and again,
use your abilities to your advantage and hide your weaknesses, only in this way you will feel
capable of achieving what you set out to do. Remember that the best part will not be the award
but the experience, I guarantee that learning during the debates will be useful both for your
daily life and for your future work life.

Last but not least, I would like to thank you all for being a part of this conference. I hope that
each of you can achieve all your goals during the three days of discussion. Take each moment
of each session as an opportunity to bring out the best version of yourself. I wish you all the
best of lucks.

Kind Regards

Mireya Zelada

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Letters From the Committee Directors
Welcome to the Special Summit on Globalization! My name is Benjamin Espinosa, and in this
occasion, I’ll be your chair alongside Keka. Before boring you with committee-related affairs, let
me tell you some things about myself. I’m currently 18 years old and a second-year law student
at Universidad de Lima. My experience in MUN goes back to 2019, when I joined my school’s
MUN Team after getting recommended by a friend and have been in love with MUN ever since.
After I graduated I joined Peruvian Debate Society (PDS), a team with whom I’ve gotten the
chance to debate nationally and, most recently, internationally in Harvard National Model UN
(HNMUN) in Boston, where I got amazing experiences both MUN-wise and personally. In my
free time, I am usually buried in paperwork, reading political and economic articles on the
Internet, or binge-watching my favorite series for hours.

Diving into the committee itself, take into consideration that I chose this topic and committee
for a reason. I see globalization as a phenomenon that has the potential to make or break
societies all throughout the world. Although this committee is focused solely on the impact of
globalization on the economic system, I am aware of the reach it has and how multifaceted it
can get (for example, in HNMUN I debated migration and saw the effect of globalization on that
area too). I strongly believe that, if handled appropriately, globalization can manage to help
solve some everlasting issues that people throughout the globe live day to day, such as health
precariousness, lack of access to education or discrimination in all of its forms, thus I am really
eager to see the solutions you bring and how you channel the potential that globalization
possess into the economics field.

Now I would like to talk a little about what I want to see in your performance during committee
sessions. First, I cannot stress enough that the most important thing in MUN is to have fun, and
I sincerely look forward to you having fun in this debate. Regarding speaking, I want to see
speeches that show deep knowledge and understanding of the topic, with a lot of content and
good argumentation. In terms of negotiation, I want to see negotiators that manage to get
what they want but are not afraid to engage in negotiations between different blocks, being as
efficient as possible and not losing one second of their time. I want to see leaders that do not
impose, but that get the best of their fellow delegates and inspire them, and are able to gain
momentum enough to set their ideas into the whole committee’s agenda. I want to finish saying
that I appreciate a well-rounded delegate. I’d rather have a delegate that does well with all
skills than a delegate that superbly excels in just one or two.

Looking forward to meeting you!

Yours truly,

Benjamin Espinosa

P.S: If you have any doubt don’t hesitate to contact me through the committee email!

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Hello everyone!

My name is Camila Barron and I am going to be Benja’s co-chair during this Special Summit on
Globalization. Although I will specify my ideas and expectations for the committee in this letter,
I will start by telling you a bit about myself. I am an 18 year old student who is currently in her
second year of college studying Business Administration at the Universidad del Pacífico. In my
spare time I like to hangout with my friends and family but also watch different movies or listen
to the music of my favorite artist. My MUN journey started back in 2019 when I became a part
of the team of my school. In that moment, I was a ninth grade student who wanted to
experience something new and doing MUN certainly helped me by taking me out of my comfort
zone. Sadly, even though I got to experience different national conferences and an international
one in the span of one year, the pandemic didn’t allow me to continue my journey for a year.
Nonetheless, I was able to continue in 2021 with virtual conferences which definitely
broadened my knowledge in MUN strategies.

Regarding the topic of our committee, I truly believe that the power of economic globalization is
endless. Understanding the monetary flow and its current/future behavior allows countries to
make decisions on how they will protect their development. Nonetheless, this should not be a
process that refrains collaboration. By establishing different trade agreements between
countries, they can increase their GDP and evolve into more developed societies. Nowadays,
with technology and more network opportunities, member states have to look for innovate
ways to increase the interdependence of our economies and promote the international flow of
money. However, increasing each GDP does not fully guarantee a better quality of life and, for
that reason, I am looking forward to hear your ideas on how we can reach actual development
with economic globalization inside the committee.

Lastly, in terms of performance inside the summit, I will explain what my hopes are. Make sure
you elaborate speeches filled with content that can show the innovation and creativity that you
have as a delegate as well as the data and research that you will have gathered by the time of
the conference. Please don’t be afraid to speak up and let the rest of the committee know what
you can bring to the discussion. Moreover, in regards to negotiation, I always look for delegates
that are able to remember their purpose and that are not taken away or distracted by the
competition. In addition, I also appreciate delegates that can lead with innovation and respect,
delegates that can think outside of the box and work with others to achieve a common goal.
Last but not least, is truly important that you remember to enjoy this experience. Have fun with
the people that you know and also take this opportunity to meet new ones. I am truly looking
forward to meeting all of you and have three enjoyable days of debate!

Sincerely,

Camila Barron

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Introduction
Practically every front-page article featured in major media outlets will include the word
“globalization.” This word has become requisite for any discussion of international relations and
the policies that any given nation should adopt. It has also become a bogeyman of populists
across the world. In this committee, delegates will be given the opportunity to think about the
ramifications of the increasingly globalized societies each of us live in, and how the
international order can best respond to the legions of critics lining up to attack globalization.
Globalization is omnipotent, and has seeped into all layers of our societies, so for precision’s
sake, our discussion will be centered on three major subtopics which this study guide will
discuss in detail: Multilateralism and Economic Integration, Free Trade, and Workers’ Rights.

This discussion will include theoretical conversations about whether globalization is inevitable,
and what various bodies can do to stymie its progress, if it can be stymied. Delegates will then
be urged to continue to think about the varying practical ramifications of a globalized world.
The discussion of globalization leads to a series of questions concerning globalization,
centering on the divides it creates and exacerbates between rich and poor countries. Are
countries that provide resources condemned to poverty? How can the international community
combat the exploitation of workers, an issue that often accompanies globalization? At the heart
of these questions is whether the United Nations can act, and if it ought to. These are of
course merely questions to get you started thinking about globalization and its implications, but
as you read the guide, further questions will come to light, as well as potential solutions that
this body could recommend regarding these issues.

Before you continue reading the study guide, here are a couple of remarks about the debate.
The committee has only one topic of discussion: globalization. Thus, we will begin the
committee by speaking in broad strokes about globalization itself. After that stage you are free
to start addressing the subtopic of your preference, but bear in mind that over the course of
this committee you will be expected to address the issues discussed in each subtopic and
present solutions for all of them in your draft resolution.

Committee Information
This committee will serve as a special summit called by the UN General Assembly; this is the
result of a request by the Security Council or a majority of members of the United Nations. The
General Assembly meets in these small groups after the sessions are convened.

Emergency special sessions can also be convened within 24 hours. This comes about when the
Security Council is incapable of making a final decision because of a lack of unanimity of the
permanent members. These can be called by the request of seven members of the Security
Council or the majority of members of the United Nations.

There have been a number of special sessions that have been convened over the history of the
United Nations, including to address the world drug problem in 2016, to quell the HIV and AIDS
Epidemic in 2001, and in order to discuss promoting gender equality in 2000. Emergency
special sessions meanwhile have focused on the civil war in Hungary in 1956 and the
occupation of contested Israeli-Palestinian Territory.

Although there has never been a Special Summit solely devoted to globalization, globalization
has been the subject of other Special Summits that have been convened, such as the one
discussing the international drug trade. Delegates will thus be paving the way for the future of

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the Special Summit on Globalization. The powers of this committee can be thought of as similar
to those of any other General Assembly committee. We thus have the ability to recommend
actions, but not enforce any given policy.

Introduction to Globalization
The ubiquity of the term “globalization” is one of the term’s few areas not riddled with
contention; hardly a day goes by where globalization is not mentioned on the front page of an
international news source. The term has existed for over 50 years, first appearing in Webster’s
dictionary in 1961. Despite its age and perhaps because of its prevalence, it is nearly impossible
to find a single definition that captures the issue’s multiplicity of meanings, especially due to
the many contexts in which it can be used. One way to attempt to understand the
all-encompassing nature of globalization is to examine how different academic disciplines
characterize it. By gaining at least a cursory understanding of how various academics in
differing areas of study interact with the term, one can at least begin to understand its deep
complexity.

One can first look at globalization from a sociological viewpoint. There are a plethora of
sociological definitions, but given various time and space constraints, only a handful will be
examined. Renowned sociologist Richard Kilminster viewed various existing understandings
within his realm, discovering that his preferred conception of globalization underscored a
balance between economic and cultural explanations of this phenomenon. For him,
globalization is best captured as an emerging trend “created spontaneously to reflect peoples’
experiences of the properties of an accelerating phase of the level of social integration
comprising the bonds

between nation states.” He further emphasized the fact that these changes decrease the role
of a singular nation state in the decision process and force nations to consider the
repercussions any given decision will have on their continent and more broadly, the world.
Thus, fundamentally, Kilminster’s definition of globalization from a sociological standpoint
emphasizes the rapid change in the rate and nature of social integration within the nation state
and the increasing role this gives to the emerging transnational process, whose definition and
scope will continue to be defined as time progresses. Another sociologist, Roland Robertson,

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contends that globalization “refers both to the compression of
the world and the intensification of consciousness of the world
as a whole.” He thus highlights the way, or in fact ways, in
which globalization has, in his view, put the world in a
somewhat specific, as well as inescapable, path to becoming
uniform. Robertson recognizes that his definition merely
focuses upon the cultural dimensions of globalization and does
not speak to the forces that have contributed to the
emergence of the trend.

Another important academic standpoint from which to examine

globalization is from the field of political science and
international relations. John Baylis and Steve Smith, who work
within this realm, characterize globalization as “the process of increasing interconnectedness
between societies such that events in one part of the world more and more have effects on
peoples and societies far away.” They posit that globalization most likely results from economic
growth and is fundamentally about economic interdependence, meaning by definition,
globalization strips people of their own independence. Another political scientist, Richard
Lanhorne, focuses on the role of technology in globalization. He argues that globalization is the
result of a long series of innovations, which allow individuals to act without regard to nation,
time, distance, government, or anything that previously served as the limiting factor in
international relations. Lanhorne further identifies the various stages of these technological
advancements, in which he includes the advent of the steam engine and the telegraph.

One final academic grouping to investigate is social theorists. Neo-Marxist Anki Hoogvelt puts
forward that globalization is merely an extension and deepening of capitalism. Hoogvelt views
globalization as more being tied to the circulation of money and less to the methods and social
relationships concerning production.The postmodernist Douglas Kellner characterizes
globalization as a move away from modernity. Kellner thus sees globalization as a stage in the
shift between modernity and postmodernity that is not yet complete. Postmodernism is the
economic or cultural state which is said to exist after modernity; that definition is highly
debated, but a postmodern society is often characterized as one that is incapable of
functioning in any linear or autonomous way.

Multilateralism and Economic Integration

Economic Globalization

Economic globalization, the commonly referred to phenomenon, is the result of the increasing
integration of economies. This is achieved broadly through the movement of goods, services,
knowledge, labor, and capital across borders and continents.

Although the term globalization has been used increasingly in recent decades, it is imperative
to understand that globalization is not a new phenomenon. Indeed, the Silk Road, the network
of trade routes established under the Han Dynasty of China, formally linked parts of Eurasia
through commerce starting in 130 BCE.

The term globalization has been in use more frequently since the 1980s to reflect the
technological advancements that facilitate the international transactions upon which
globalization relies. The shift of countries like China and India and those of the former Soviet

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bloc to free or free market policies in recent decades has greatly increased their levels of
internal economic activity and their connection with the rest of the world.

Three main channels exist to facilitate economic globalization: trade among countries, foreign
direct investment (FDI), and the international transfer of knowledge and technology.

Foreign direct investment (FDI) is when a company or individual in one country invests in the
business interests in another country. This occurs by establishing business operations or
acquiring business assets in this other country in the form of an ownership or controlling
interest in the foreign company. The distinguishing characteristic of foreign direct investment is
that the investment establishes effective control or at least great influence over the decision of
a foreign business. Thus, there are many forms that foreign direct investment can take
including the opening of a subsidiary company in a foreign country, the acquisition of a
controlling interest in a foreign country, or a merger with a foreign company. Foreign direct
investment works in conjunction with other international economic flows to increase integration
of national economies, furthering the globalization of the modern economy.

Sources of Globalization

The main forces that have driven global integration are technological innovations, broader
political changes, and economic policies. In terms of technology, chief among the driving forces
that facilitated globalization were inventions that improved the speed of transport and
communications while also lowering their costs. This includes the development of the jet
engine and the use of aviation for transporting people and goods. The other change was in
information and communication technology. This is particularly true of the Internet and the
World Wide Web, which have greatly facilitated this all important interconnectedness.

The link between political developments and globalization is much more complex. The
beginning of the Cold War had the effect of breaking up the world and the global economy.
This was epitomized by the construction of the Berlin Wall and the Cuban missile crisis.
Granted, during this period there were seeds of economic recovery and integration, as seen
through the Marshall Plan. However, the various economic reforms China took, along with the
fall of the Iron Curtain, marked the demise of long-term political impediments to global
economic integration, for the most part. As related to economic changes, the installment of
more lenient economic policies in the past few decades have fueled globalization. This often
takes the form of the reduction or elimination of restrictions on international trade and financial
transactions.

Multilateralism

By definition, the United Nations is an organization, which relies upon multilateralism or, in
other words, joint action by a collective group of nations. Multilateralism occurs when common
problems or challenges are solved most efficiently when done so collaboratively, not
unilaterally. Examples of these areas that are best handled cooperatively include international
peace and security, the protection of the environment, the preservation of resources, and the
guarantee of universal standards of living, all of which the United Nations is involved in. The
need for such collaboration has been growing at an exponential rate since the inception of the
United Nations in 1945; there are now four times as many state actors.

In fact, although it may not have been stated explicitly, the creation of the United Nations in
1945 reflected cognizance of the importance of international cooperation. Indeed, Article I,
Clause 4 of the United Nations Charter states that one of the purposes of the United Nations

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is: “to be a center for harmonizing the actions of nations in the attainment of these common
ends.”

Multilateralism is thus by definition an integral component of globalization. In order to have an

economy and world that interacts with each other, individual countries must be willing to work
with each other to promote this end goal. However, these multilateral bodies have come under
intense scrutiny in recent years. Whether it be President Trump criticizing the United Nations,
populists in Europe claiming that the European Union represents an assault on national
sovereignty, or Philippine President Duterte lambasting the meddling of the United Nations in
the country’s internal affairs, multilateralism is taking a beating. Criticism of multilateral
institutions mainly pertains to them violating national sovereignty, being ineffective and costly,
or pushing a liberal international agenda.

Case Study: Brexit

Recently, there have been international trends

that move away from the theory of
multilateralism and instead channel nationalism.
One prime example of this is the 2016
referendum in the United Kingdom on whether
to leave the European Union, commonly
referred to as “Brexit.” In June 2016, 17.4 million
Britons voted on the question of severing ties
with the European Union: 52 percent voted in
favor of leaving and 48 percent voted to stay.

In May 2015, David Cameron, Britain’s prime minister, promised to host a referendum on Britain’s
membership in the European Union. The European Union (EU) is an economic and political
partnership of 28 European countries. The European Union was formed after World War II with
the idea that if European countries were in an economic partnership with each other, they
would be less likely to go to war with each other. The European Union has since become a
“single market,” meaning that goods and persons can move within European Union member
states as if they were one country. The European Union has its own currency, the Euro, its own
parliament centered in Brussels, and its own set of regulations that govern a plethora of
domains such as the environment, transportation and consumer rights. The decision to leave
the European Union was spurred by nationalistic fervor and the fear that the United Kingdom
remaining in the European Union may be in the best interest of the European Union, but not of
Britain. Those on the “leave” side stated that remaining in the European Union would produce a
wave of immigration, crime, and terrorism in Britain from Turkey, which is currently hoping to
join the European Union.

Within the European Union, there is a plan of how

any nation can exit, known as Article 50. This is a
mere five paragraphs which was signed by all EU
states and became law in 2009 declaring that, in
order for any member state to quit the European
Union, it must notify the European Council and
negotiate its withdrawal.17 Despite the fact that
there is a protocol on how to effectively leave the
European Union, the result of the referendum was
seen as a major loss for the European Union,

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which at the time was with pressures resulting from slow growth, high unemployment, Greece’s
debt, and the migrant crisis. Furthermore, the United Kingdom held an important role in the
European Union, serving as the second largest economy after Germany in the European Union
and holding a seat on the United Nations Security Council.

David Cameron and many other senior UK figures who advocated staying in the European
Union predicted a dire economic crisis if the United Kingdom voted to leave. Partially because
the result of the referendum was unanticipated, economic markets reverberated harshly in the
days following the vote. The British Current, the Pound, remained about 15% lower than the
dollar and 10% down against the Euro a year after the vote. The UK economy, though, was still
estimated to have grown 1.8% in 2016, which was second only to Germany among the world’s
Group of 7 (G7) leading industrialized countries. UK growth slowed in 2017, but the economy
continued to expand; inflation rose to a relatively stable 2.6%, while unemployment fell to a
42-year low of 4.5%.

Trends of Economic Globalization

International trade after WWII entered a long period of expansion, with exports rising by more
than eight percent annually from 1950 to 1973. This period of sustained expansion did not
continue, however, due to two oil price shocks and inflation caused by monetary expansion.
This trend, in turn, was halted due to innovations in the information technology (IT) sector in
the 1990s. Thus, for the entire 1950-2007 period, trade increased on average by 6.2 percent
per year, which is much higher than in the first wave of globalization from 1850 to the
beginning of World War I in 1914. One notable characteristic of increasing globalization is
decreasing market share for developed countries. At the beginning of 2011, it was clear that the
GDP growth rates of major developed economies were lower than those of many developing
countries. At the beginning of the millennium, rich countries’ share of global GDP based on
purchasing power parity was two-thirds, whereas by 2010 that percentage had decreased to
about a half. Furthermore, many economic historians forecasted that, within the next ten years,
that number would have decreased to 40%. This indeed follows the trend the economy has
been following, of a catching up by emerging markets.

Multinational Corporations

One important mechanism through which foreign direct investment operates is multinational
corporations. Simply put, a multinational corporation (MNC) is a company whose business
activities are located in more than two countries. Given this somewhat broad definition,
multinational companies can vary in the extent of their activities. The economic definition of an
multinational corporation highlights the fact that owners and their managerial agents in one
country can control the stakes and operations of that company in other countries.

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Although multinational corporations sometimes involve the flow of capital across national
borders, not all flow of capital across borders is necessarily due to an multinational corporation.
Capital can flow across countries in the form of bonds or investments in companies that are too
small to grant controlling interests. This form of investment is called a ‘portfolio’ investment.
Indeed, a portfolio investment is distinguished from a foreign direct investment because a
‘direct investment’ involves an ownership claim of an individual or business of one country in
the business activities of another country. Thus, a multinational corporation is the product of a
foreign direct investment, defined by the effective control of operations in a country by
foreigners.

Another important aspect of multinational corporations is their cultural and social implications;
because an MNC usually develops within the context of one nation and is then replicated in
another nation, it exports its organizational mechanisms from one country to another. However,
they may also encounter conflicts, as organizational practices created in another country may
run counter to the social norms of another. In addition to unexpected cultural hurdles,
multinational corporations often encounter concerns about national and regional autonomy.
Since powerful multinational corporations are often incredibly large, their policies and general
means of operation may present quagmires to political leaders who are both eager to maintain
their autonomy and to acquire the investment, technology, and information that multinational
corporations provide.

In order to understand why multinational corporations are beneficial, one in essence is

questioning the theories behind foreign direct investment because as already explained, a
multinational corporation’s expansion is by definition a form of foreign direct investment). Firms
have an advantage when producing at home and thus a comparative disadvantage when
producing abroad, which logically means firms first set up at home and then decide to extend
across borders. As already explained, due to this process, the firms then apply what they have
learned at home, abroad. This thus leads into a principle integral to understanding the conflict
surrounding multinational corporation: firms expand overseas because they have a competitive
advantage in terms of resources and production and thus are likely to be large and essentially
oligopolistic in nature. This creates a situation in which the same companies dominate in
multiple countries.

Understandably, this scenario has resulted in concerns regarding national sovereignty.

Particularly in recent years, the acquisition of multinational corporations has been a way in
which individuals and firms invest in foreign economies in a concentrated manner. Furthermore,
nations sometimes utilize multinational corporations as a vehicle by which they can affect
policy decisions. This dilemma is particularly poignant in developing countries, many of which
are in need of resources, but are concerned about losing their independence. This concern is
encapsulated in the term “dependencia.” This theory refers to the economic confrontation
between the regional interests of Latin America and those of the United States, the latter of
which has been a large investor in the economies of various Latin American countries. These
countries, in an attempt to curb the power of multinational corporations, have restricted the
amount of equity ownership foreigners can invest in a domestic company, or in some cases,
entirely prohibited foreign investment in certain sectors.

Case Study: Brazil

Brazil is a prime nation to study, to examine the effects – both positive and negative – of
multinational companies, on the development of an economy. Brazil has experienced
unparalleled growth in the past decade or so; from 2000 to 2012, Brazil had an annual GDP

12
growth of over 5%. Because of this economic growth and its relative political stability, Brazil has
emerged as an attractive destination for foreign investors.

Since a new government assumed control of

Brazil after a period of political turmoil in 1964,
the laws governing multinational corporations
have been relatively clear. Simply put, the
Brazilian government recognizes that foreign
investment will receive the same treatment in
the eyes of the law as local investment. A
multinational corporation can enter the Brazilian
market either by creating a new company and
setting up the requisite facilities or by acquiring
an existing company and thus pursuing a joint
venture. Historically, Brazilians have been weary of joint ventures; there have been signs that
the government is concerned with foreigners seizing control of Brazilian companies. Thus, a
decree-law was issued, mandating that any acquisition have the prior approval of the
government. This law was never officially published and thus was not put into effect.
Regardless, some members of the government, particularly the Minister for Industry and
Commerce, have articulated the view that any major acquisition of a pre-existing Brazilian
company should have the prior approval of the government.

Despite Brazil’s acceptance of foreign capital, its government has implemented policies
supporting Brazilian companies, defined as companies in which the majority of the voting stock
or shares lies in the hands of Brazilian nationals.

Economic and social progress between 2003 and 2014 lifted 29 million people out of poverty,
and as judged by the Gini Coefficient, inequality declined significantly. Brazil, however,
experienced a deep recession in the early 2010s: the country experienced an annual growth
rate of 4.5% between 2006 and 2010, followed by a stark deceleration to a 2.1% growth rate
between 2011 and 2014. Brazil’s GDP, for example, contracted by 3.8% in 2015. This economic
crisis, marked by a fall in commodity prices and subsequent inadequacies in policy adjustment,
combined with a political crisis, contributed to the falling consumer and investor confidence.
The major effect that falling consumer and investor confidence has had on the Brazilian
economy serves as a testament to how Brazil has grown to be reliant on international
investment.

The creation of foreign companies, however, has continued to bring technological innovation to
Brazil, particularly after the turmoil surrounding the 2016 ousting of president Dilma Rousseff.
For example, in May 2017, the Latin American venture capital firm Kaszek Venture announced
that it had collected a US$200 million fund; Brazil is expected to be the largest recipient of the
firm’s capital. Brazil ought to be seen as an example of how foreign investment can
simultaneously spur innovation and allow for financial growth and expansion, while also
creating what some inside the country would deem to be an unhealthy and unsustainable
reliance on foreign aid.

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Free Trade

Introduction

The concept of free trade is discussed in the news often. Before going into the intricacies of
free trade policies, it is imperative to understand the definition of free trade. Simply put, free
trade is the economic policy of not discriminating against imports or exports to or from any
foreign entity. In other words, a policy of free trade allows for buyers and sellers from separate
economies to interact with one another, without having an additional burden imposed upon
them in the form of tariffs, quotas, or prohibitions on their goods and services. Free trade is
thus the opposite of trade protectionism.

In terms of its political implications, free trade policy can simply be the absence of any other
policy. The government does not need to take any action to promote free trade. The fact that
free trade results from the absence of any other action causes it to sometimes be referred to
as “laissez-fair trade” or “trade liberalization.” However, governments with free trade
agreements do not necessarily abandon control of taxes on imports and exports.

The main body that regulates international trade is the intergovernmental World Trade
Organization (WTO). The goal of the World Trade Organization is to ensure that global trade
happens as often, predictably, and freely as possible. Before the body became the World Trade
Organization, it was the General Agreement on Tariffs and Trade (GATT), created in 1947 in
Havana as part of a larger plan to ensure European economic recovery after World War II. The
role of the General Agreement on Tariffs and Trade was to work against the protectionist trend
that sprang from the Great Depression. In only its first year, the General Agreement on Tariffs
and Trade sponsored negotiations among twenty-three countries, resulting in forty-five
thousand tariff concessions affecting 20 percent of world trade. Since that first round of
negotiations, seven successive sessions have increasingly reduced barriers on commerce.

Regulations on trade have diminished substantially since the 1960s, as governments continue
to reduce or eliminate tariffs and quotas, quantitative restrictions, on imports. The reduction of
tariffs increases demand for imports, since it lowers the price domestic consumers pay for any
given import.

Trade liberalization accomplishes a similar result, by eliminating or reducing export taxes and
subsidies. This particularly affects developing countries; for example, countries with
agricultural economies have historically levied export taxes as a means to collect tax revenue.
They did this partially because of the
absence of a well-developed system to
collect income and sales taxes; levying
taxes on exports emerged as a viable way
to collect much-needed revenue.

Over the past few decades, the overall

trajectory of the world economy has been
toward trade liberalization, especially in
the form of the reduction of tariffs.
However, the goal of “free trade” has been
pursued unevenly, which can be seen as a
reflection of the relative negotiating
strengths of rich and poor countries.

14
Certainly, the World Trade Organization has been integral in the push towards trade
liberalization, although additional pressures have been exerted through bilateral trade
agreements between rich and poor countries. These bilateral trade agreements reflect the
relative power of each nation by demonstrating the ability of rich countries to shape trade rules
and regulations to their domestic interests and not necessarily to the universal goal of “free”
trade. One example of this is the intransigence of the United States and some European
countries in maintaining substantial import tariffs on agricultural goods to protect their farmers
from foreign competition.

The Singer-Prebisch thesis expands upon these dynamics, which it claims are attributable, at
least in part, to the differences in price elasticity of demand between the goods that less
developed countries import and export. This theory refers to the fact that poor countries often
specialize in commodity exports, while they import skill and capital-intensive goods, which
mainly takes the form of manufactured goods. Because many viable substitutes exist for
commodities, and the demand for commodities usually does not rise as income rises,
commodity export prices rise much more slowly than the prices of manufactured goods.

Thus, poor countries that export commodities face declining terms of trade: the prices of
foreign goods increase, while the prices of domestic goods stay the same, meaning that they
give up more exports to purchase imports.

However, as previously stated, due to trade liberalization, there has been an increase in the
exchange of goods and services across borders. One useful statistic to measure this change is
the percentage of exports as a share of gross domestic product (GDP). During the period 1960
to 2005, the percentage of exports as a share of world GDP rose from 12 percent to 27
percent. In East Asia and the Pacific, the increase was particularly dramatic, with trade as a
share of GDP reaching 47 percent by 2005.

Proponents of unqualified market liberalization argue that it promotes economic efficiency by

allowing countries to specialize in the goods that they can produce most cheaply. Some
economists argue that this leads to improved productivity, which is an integral component of
efficiency. Those who maintain this stance also contend that trade liberalization stimulates
growth. However, this relies on the assumption that low prices only reflect efficiency and
ignores the possibility that prices are low due to factors like discrimination, the weak bargaining
power of workers, and the absence of health and safety requirements. This thinking also
assumes that there is full employment of the workforce; however, workers who lose their jobs
due to their country’s specialization in another good may not be able to find new jobs,
increasing the unemployment rate.

The debate over the increased amount of free trade that has occurred as a result of
globalization is composed of two camps. One group believes that globalization leads to rising
incomes. These individuals believe that even low-income groups come out as winners from
globalization. They propose that, although inequality may rise in the initial phase, it will
eventually decline and all groups of people will be able to enjoy a greater standard of living.
Those on the other end of the argument believe that, although globalization may improve
overall incomes, the benefits are not shared equally among citizens of the world and even of
the same country, creating a situation in which there are clear losers in relative, and perhaps
even absolute, terms.

15
Benefits of Free Trade

As previously stated, proponents of trade liberalization contend that it allows countries to

specialize in the production of goods for which they have a competitive advantage. Trade
increases efficiency and expands global output. Those who advocate for free trade and trade
liberalization emphasize four major benefits: innovation and competition; economic growth;
democratic values; and economic freedom.

Free trade rewards risk-taking by increasing sales, profit margins, and market share for
businesses. Because free trade benefits the country that can best produce a certain product,
firms have an incentive to not only to be the best at producing a given good nationally but also
internationally, so that they can earn profits worldwide. Thus, free trade encourages companies
to find the cheapest and most efficient way to produce a product, fueling and greatly
rewarding innovation. Similarly, a country that advances free trade policies will usually
experience economic growth, because the firms in that country will strive toward innovation to
beat their domestic and international competitors.

Free trade also encourages support of the rule of law. Companies that take part in international
trade have an incentive to follow not only the contracts they sign but also internationally
agreed upon norms and laws. The World Trade Organization is a prime example of this; the
WTO has complex measures put in place to compel its members to abide by each country’s
treaties and has a mediating body to intervene when any international conflicts regarding trade
arise. Free trade also brings with it more than capital and physical goods; it transmits ideas. As
the seminal economist Adam Smith suggested, a culture of freedom emerges when a country
has the self-confidence to open itself to the inflow of goods and ideas that accompany those
products.

This commitment to market liberalization is bolstered by the view some hold that government
intervention into the workings of an economy ought to be as limited as possible. These
individuals fear government corruption and unnecessary controls on trade. Those who harbor
this fear often cite Latin American governments’ attempts to reduce dependency on foreign
imports through their import substitution industrialization (ISI) policy from the 1930s to 1970s
as a prime example of this practice. Through this policy, several Latin American governments
used tools to promote industrialization in strategic areas by imposing restrictions on imports of
manufactured goods and foreign investment. ISI, they argue, led to higher consumer costs,
inefficiency, and corruption, rather than augmenting productivity and economic growth.

Case Study: China

The economic history of China in recent decades

is a prime case study in examining how China’s
adoption of free trade policies has affected both
its economy and the international community at
large. China’s rapid economic progress began
when it first opened its doors to the outside world
under the leadership of Deng Xiaoping. Rather
than emulating the ideas Mao Zedong had so
closely held of class struggle, Deng elevated
economic development to be the primary goal of
socialism. Deng proposed a plan called the Four
Modernizations that focused on four areas of

16
industrial modernization: agriculture; industry; science and technology; and military. Deng
realized that, in order to bring this plan to fruition, China would need to have increased
interaction with the global economy. Through what was called the Open Door Policy, Deng
ushered European and American capital into Chinese industries. Deng initiated other economic
reforms that had the fundamental goal of opening the Chinese economy.

It is important to understand the general trajectory of the Chinese economy in the decades
following the founding of the People’s Republic in China in 1949. Before the late 1970s, China’s
commodity trade was determined entirely by economic planning; in fact, the State Planning
Commission’s import plan accounted for 90 percent of all imports. The main goal of this plan
was to increase China’s supply of machinery and equipment; industrial raw materials; and
scarce intermediate goods. The export plan was also very specific, clarifying the precise
quantities of more than 3,000 commodities.

These predetermined limits on the quantity of goods China could export had an adverse effect
on its allocation of domestic resources and economic growth. One statistic that encapsulates
these inefficiencies is China’s share of world trade: 1.5 percent in 1953 and 0.6 percent in 1977.
This system of central planning was gradually phased out in the 1980s and abandoned by the
end of the 1990s. The government, through foreign trade companies, continues to maintain
direct control of a series of commodities; however, for the most part, trade is decentralized and
determined by market forces. Though the government became less reliant on international
trade controls, it was able to still utilize instruments such as tariffs to regulate the flow of
imports and exports. The state authorized tens of thousands of companies to engage in foreign
trade transactions, which spurred competition among private firms that previously had not
existed. This reform, among others, transformed China from a highly protected market into one
of the most open emerging market economies by the time it joined the World Trade
Organization at the end of 2001.

From 2002 to 2005, China fully implemented its WTO commitments, taking steps to reduce
tariffs, eliminate non-tariff barriers, and expand market access to foreign producers. The speed
of China’s trade reforms slowed down between 2006 and 2008 due to domestic criticisms
about China’s weakened position in WTO negotiations and disagreements within China’s
government on economic priorities. However, during this period, tariff quotas continued to be
abolished, and by 2008, only select goods such as grain, sugar, wool, cotton, and fertilizer,
were subject to tariff quota restrictions.

In 2014, China became both the world’s largest trading power and FDI recipient. China’s
monumental economic rise and its particularly impressive trade performance can be attributed
to the economic reforms it has implemented over the past 35 years. Particularly, China’s
decision to join the World Trade Organization, coupled with its full engagement in regional and
bilateral trade agreements, have provided incredible momentum for rule-based,
market-oriented trade in the country. By 2020, China GDP was an estimated US$14.9 Trillion,
although the percentage change in the country’s GDP has slowed dramatically in recent years,
even before the COVID-19 pandemic.

Even though the discussion in this background guide centers before the Covid-19 pandemic, it
would be remiss to not highlight the predicted stagnation and decline of the Chinese economy
post-2020 due to different factors such as the pandemic, technology, and strategic
competition. For the purposes of this committee session, keep in mind that the focus of
discussion will be on the impact of globalization pre-2020 with respect to the countries
investigated in the case studies.

17
Globalization and Inequity Among Nations

A fundamental challenge presented by increasing globalization is that global markets are

inherently dis-equalizing, making rising inequality in developing countries somewhat inevitable.
The economic gains that can be reaped from more efficient and deeper global markets are not
equally shared. This makes sense considering the fact that markets reward those who have the
right assets, including but not limited to financial capital, human capital, and entrepreneurial
skills. Due to technological advancements, the demand for skilled workers is increasing faster
than supply, resulting in the emigration of highly skilled citizens from poorer countries to richer
ones.

In 1870, the dawn of the first modern era of globalization, the world’s average per capita GDP
was US$873 dollars. The average income of the richest nations then, which included the US,
Canada, Australia and New Zealand, was US$2,419 dollars, while the average income of the
poorest nations was US$500 dollars.40 By 1950, the start of the second era of globalization,
the average income of the richest countries had risen to US$9,268 dollars, while the average
income of the poorest countries was only US$890 in the African nations, causing the spread to
rise to a 13 to one ratio. By 2003, the income levels for the same groups had risen to
US$28,039 versus US$1,549, making the spread between the top and bottom of the
international distribution to 18 to one.

These figures represent the aggregate and in fact mask some disparities that exist between
countries. For example, in 2006, the Democratic Republic of the Congo, a nation with a
population of about 57 million people, had a GDP per capita of US$649. In that same year,
France, which has a slightly larger population of 60 million people had a per capita income of
US$28,877. Thus, the ratio of the income of the average French citizen to that of the average
DRC citizen was over forty-to-one.

These statistics and many others like them raise one of the larger questions surrounding the
potential negative aspects of globalization. Particularly when through trade liberalization,
countries come to specialize in the production of goods for which they have a competitive
advantage, some fear this will widen the gap between developed and developing countries. In
other words, some fear that countries that are still developing will for example never be able to
do anything but manufacture goods whereas other highly developed countries will be the hub
of innovation. The statistics listed above are evidence of how the world’s progression has
allowed some countries to soar while meanwhile rendering other countries as poor.

The differences in the levels of income per capita reflect variations in the growth of income in
different regions, rates that have also varied over time. The growth of GDP per capita in
Western Europe rose to 1.33% between 1870 and 1913, the first era of globalization, and fell to
0.76% during the time of the two world wars. It then more than quadrupled to around 4.95%
when globalization regained its momentum after 1950, before it fell to 1.87% after 1973. Growth
per capita in Asia rose from 0.08% during the wartime period to 3.87% from 1950 to 1973 to
3.21% in the most recent times.

The source of this economic growth has been the source of much scrutiny. Economists have
attempted to look beyond short-term business cycle fluctuations to identify what determines a
country’s production capacity. Theoretical studies have focused on the role of technological
innovation in sustaining economic growth over time. There has been a recent trend of
economists attempting to uncover the deeper determinants of economic growth, which exert
their influence over a long period of time which include the role of geography, economic

18
openness, and institutions. Those who study this have had somewhat of a difficult time
distinguishing the relative importance of these factors, which is complicated by the
interrelationships. Geography, for example, can affect a country’s integration with the economy
and the evolution of its political institutions.

Trade Liberalization and Inequality Within Nations

Based on the analysis of movement in the Gini coefficient, the most widely used summary to
measure inequality, inequality has risen in all but the low income country over the past few
decades, although there have been significant regional and country differences. Inequality has
risen in developing Asia, Europe, Latin Americas and advanced economies over the past few
decades whereas it has declined in sub-Saharan Africa and the Commonwealth of Independent
States. Among the largest advanced economies, inequality seems to have declined only in
France, whereas among the major emerging market countries such as China, inequality appears
to have risen.

From analyzing the statistics of measures of inequality among countries over the past few
decades, a few key facts and trends emerge. Over the past few decades, income growth has
been positive for all five quintiles in basically all regions and income groups during the most
recent period of globalization. Simultaneously however, income inequality has increased mainly
in middle and high-income countries and less so in lower-income countries.

The main analytical link that has been developed between economic liberalization and income
inequality is derived from the Stolper-Samuelson theorem: it supposes a two-country where
only two goods are produced. It predicts that in this world, increased trade openness via tariff
reduction in a developing country where low-skilled labor is abundant would result in an
increase in the wages of low-skilled workers and a decrease in the pay of high-skilled workers,
leading to a reduction in income inequality. It predicts that after the tariffs on imports are
reduced, the price of the importable high skill required reduces and so does the compensation
given to the few high-skilled workers. This is in stark contrast to the other good: the price of
the (exportable) low-skilled good produced for which the country has a relative advantage
increases and thus so does the compensation of low-skilled workers. For an advanced
economy in which high-skilled labor was relatively abundant, the reverse would occur, with an
increase in openness leading to higher inequality.

The implications of this theory, particularly the prediction of trade liberalization as a means of
reducing inequality within a country, have not been tested in economy-wide studies. One
particular problem this theory often confronts is a way to explain the premium given to skilled
workers in developing countries. This has led to the creation of alternative analytical
approaches, which confront other problems. This has given rise to the explanation for rising
skill premiums based on the idea that technological change is inherently skill biased, meaning
that it benefits those who have the skill to adapt to the new learning that technology changes
require, which thus attributes the observed increases in inequality to technology shocks.

Despite common perceptions, casual observation does not suggest an obvious association
between changes in inequality across countries and changes in the degree to which those
countries have become globalized over the same period. This however is less surprising when
considering the multiple channels through which such a relationship would operate and the
other factors that are relevant. The following factors are ones that can be important to consider
when attempting to determine how inequality has changed in countries of time: the role of
technology, access to education, sectoral share of employment and financial development.

19
Careful analysis of these factors has indicated the main driver of the recent inequality across
countries has been technological progress. Based on a benchmark model, technological
progress alone is the root of a 0.45 percent average annual increase in the Gini coefficient from
the early 1980s, the higher the Gini coefficient, the more inequality exists. Similarly, there have
been findings that investment in technology has a further dis-equalizing impact, which is
consistent with the view that new technology increases the premium on skills and further
automates low skill jobs causing these workers to be out of work. Among developing countries,
the effect of technological progress is stronger in Asia than in Latin America, which is possibly
a reflection of the greater share of technology-intensive manufacturing that occurs in Asia
compared to in Latin America. Despite the distinct effects technology has on inequality, it is
essential to remember that the spread of technology and increasing globalization are far from
independent—technological advances have deepened trade and financial linkages within
countries, while globalization has facilitated the spread of technology.

Worker’s Rights

Introduction

When considering the effects of globalization on the global economy, the labor economy is a
vital sector to study. In essence, globalization allows for an influx of labor in any place at
previously unimaginable levels. This creates a question of the disparity between unskilled and
skilled laborers and the protection of rights of laborers.

Purely Economic Impact

Some contend that the integration that is associated with globalization and the subsequent
reduced tariffs and transportation costs could allow each country to specialize in the
production of goods in which it has a comparative advantage. In other words, because the
world is so integrated, countries would only need to produce the goods at which it is the best

20
at producing. Comparatively, skilled labor is the factor in excess in developed nations whereas
unskilled labor is the factor in excess in developing nations.

This theory has implications on the spread of skilled and unskilled workers and developed and
developing nations. Globalization would therefore increase the demand for skilled labor in
developed nations and for unskilled labor in developing nations. This is the case because as
previously explored, Globalization would allow for a country to focus on the production of
goods in which it has an advantage and in broad terms, developed nations have an advantage
in producing goods which require skilled labor whereas developing nations have an advantage
is the production of goods which require unskilled labor.

Economists conjecture about the global effects of this specialization that would come with
globalization. Some believe that the increase in demand for skilled labor would increase
inequality in developed nations. In other words, because there is a low demand for unskilled
labor, the forces of supply and demand in the market would push the wages for unskilled
laborers down, broadening the equity divide between skilled and unskilled laborers. Some
might question why this might be the case considering the fact that as previously discussed
globalization would provide for the specialization of developed countries in skilled labor. Even if
a developed country specializes in skilled labor realistically there will remain unskilled laborers
searching for work in that given country. So, due to the lower demand for unskilled laborers in
this country that has specialized in producing goods and services that require skilled labor,
these unskilled laborers will face dramatically lower wages. Another possibility is that a country
will have policies limiting the fluctuations of wages due to purely market forces (i.e. minimum
wage laws) if this is the case, the result will be greater levels of unemployment for unskilled
laborers in a developing country. Thus some economist that either through decreased wages
for unskilled laborers or increased unemployment for unskilled laborers, globalization will result
in a growing disparity in the level of prosperity between skilled and unskilled laborers in a
developed country which will come to specialize in the production of goods and service which
require skilled labor.

The above prediction about the wage fluctuations that will result from globalization implicitly
assumes that international trade affects the equilibrium wage level. This however is not the
case for all lines of work. For the large fraction of the labor force that is self-employed or works
in household businesses, globalization is unlikely to have a direct effect on earnings. Workers
that may experience wage fluctuations due to globalization are involved in sectors that are in
the formal sector and thus would be impacted by international trade and foreign direct
investment. Changes in the formal sector could indirectly affect wages of those who work in
household enterprises by altering the appeal of working in these household sectors and thus
pushing the equilibrium wages up or down. Ultimately, globalization should first alter the
equilibrium wages in the formal sector, which may subsequently translate into a higher or lower
equilibrium wage for those working in household businesses.

Some also fear that inequality between workers could increase if the economic integration that
comes from globalization prizes those who can adapt to the new technologies. In other words,
if the economy becomes highly dependent upon a new technology that takes skill and
knowledge to learn how to operate, those who have the capacity to learn how to operate said
technology will thrive while others are left behind. Indeed, these fears are encapsulated in the
commonly discussed phenomenon as the “digital divide.”

21
The Global Economy

In 1999, 51 of the top 100 largest economies in the world were not countries, but multinational
corporations (MNCs). As described in the previous section, multinational corporations are
companies that operate in more than two countries. A multinational corporation is one way in
which individuals from a foreign nation can have direct control over the business operations of
another country (MNCs are explained in much greater depth in the first section of the guide.)
The 500 largest multinational corporations account for about 70% of all world trade, which
includes one-third of all manufacturing exports, three quarters of all commodity trade, and
four-fifths of technical and management service trades. These enormous multinational
corporations also account for about two-thirds of all industrial investment in “lesser” developed
countries. As of 2006, there were about 80,000 active multinational corporations, although it is
still the case that a small number of very large multinational corporations is responsible for
most of today’s cross border economic activity.

market, manufacturing in the new global economy has shifted from relatively well regulated and
often unionized jobs in industrial countries to often very low paying and dangerous jobs in the
developing world. This is the case because many of these multinational corporations operate in
the same set of developing nations and thus are all competing with one-another to develop and
exploit a competitive edge.

The tremendous economic power of multinational corporations is also often translated into
political power, which is used to influence and frequently undermine existing regulations,
prevent new ones that would standardize labor and thus potentially decrease the revenues of
these multinational corporations. The top six corporations in the world have higher revenues
than any government except for the United States. These six corporations have more income
than do 68 governments in countries with 58% of the world’s population. For example in 1998
Wal-Mart’s sales reached $119 billion, which exceeded the combined revenue of India and
Russia for that year.

This provides the context for protecting worker’s health and safety. Fierce global economic
completion has created a relentless climate of multinational corporations competing with each
other to find and maintain the lowest production costs. Various global economic crises have left
an enormous number of impoverished workers who are desperately searching for work and
unable to refuse jobs even in the most perilous of conditions. MNCs and other massive and
powerful transnational corporations have the political, financial and technical power to assert
themselves in any nation in which they see the potential for a profit making enterprise.

Case Study: Maquiladora

One scenario is the “maquiladora” assembly

plants on the US-Mexican border which are
directly operated by US Fortune 500 companies.
After the 1994 passage of the North American
Free Trade Agreement (NAFTA), Northern
Mexico became an export-processing zone.
These plants operate under special US tax
treatment and Mexican foreign investment
regulations. American main parts are shipped to
Mexico and used in the production of products
that are then sent back to the United States.

22
Item 807 of the US Tariff Code states that import duties on goods are paid only on the value of
Mexican labor. Many of these corporations purport to have “one global standard” for their
facilities around the world, this, however, unfortunately seems not to always be the case.

The prevalence of Maquiladoras was also spurred by the economic liberalization following the
Mexican debt crisis of the 1980’s which increased foreign investment and increased
employment in the maquiladora export industry. This created a change in the Mexican labor
markets as factory jobs became more concentrated in northern Mexico and around the
US-Mexico border whereas these jobs were historically most prevalent in central Mexico.
Responding to this change in jobs, many workers from central Mexico began to migrate to
northern Mexico in the hope of finding economic stability through a job in a maquiladora; thus,
now an extremely large percentage of workers in maquiladoras are migrants from Central
Mexico.

In addition to the fact that many of the workers in maquiladoras are migrants, a very high
proportion of the workers are women. When asked about this disparity, some employers claim
that they prefer to hire women because they are relatively content doing the tedious and
repetitive work that is required of the job. However, investigative research into this trend
suggests another motivation: employers may be more likely to hire women as maquiladora
workers because they are less likely to report workplace abuses.

Furthermore, investigations into the basic demographics of these workers suggest that the
average maquiladora workers are less educated, less likely to own a car, and less likely to own
a phone than the average Mexican worker. Furthermore, data shows that maquiladora workers
have longer hours and receive lower wages than the national averages.

A plethora of human rights violations have been reported within the maquiladoras that are tied
to the gender, socioeconomic status, and migrant status, serving as a case study for the ways
in which the rights of disadvantaged groups can be exploited in working conditions.
Unsurprisingly, given the gender disproportion previously discussed in the maquiladora
workers, there are numerous gender specific issues. One overarching issue is related to
pregnancy. Mexican labor laws require that pregnant women receive paid maternity leave.
However, research has revealed a high rate of resignations among pregnant women,
suggesting that some women may have suffered from forced resignations due to pregnancy. In
other words, some employers may attempt to avoid having to pay maternity leave and respond
by creating circumstances, which attempt to ensure that the women resign. Research has also
found that women working in maquiladoras experience high rates of menstrual irregularities,
miscarriages, birth defects, premature births, low birth weight and infertility. There are also
some reports of brutal actions on the part of employers to ensure that the female workers do
not even become pregnant.

In addition to the particular hazards female maquiladora workers are subject to, there are also a
plethora of occupational dangers. The most prominent of these hazards is the unsafe work
environment itself; maquiladora workers are exposed on a daily basis to handling materials with
toxic chemicals, using unsafe equipment and poorly designed workstations, working in extreme
temperatures with poor ventilation, being expected to fulfill dangerously high and unrealistic
manufacturing quotas. These health hazards manifest themselves in terms of high incidence of
headaches, dizziness, chest pressure, anemia, vision and hearing problems, and other physical
ailments. Research has shown that maquiladora workers use social health and welfare services
at a rate two to four times as great as other workers, which is most likely a result of their
occupational injuries.

23
These maquila plants in Mexico are missing effective safety programs and employee training,
engineering controls or protective equipment for chemical exposures, effective controls for
noise and heat stress.

Conditions in contractor plants in the developing world or those operated to produce for the
demands of domestic markets are often even worse than those in the maquiladoras. A 2001
official Ministry of Labor report about the conditions in El Salvador’s 229 contract garment
factories that export to the United States reported the forced overtime, substandard wages;
excessive production quotas and unsafe working conditions were the norm. Furthermore, the
report noted a widespread belief among workers that labor inspectors are corrupt and there
was a dire need for an improvement in the quality of work at the Ministry of Labor.

In China, an official Ministry of Health survey found that over the last two decades, over 20
million township businesses were created, where this is a result of the economic liberalization
that China has experienced in recent decades. Of those township businesses, 60% have
minimal industrial safety measures. Some researchers estimated in 2001 that at least 50,000
fingers, hands, and arms were amputated in Chinese factories during the previous year.

One marker of the insufficient safety standards in the developing world is the hundreds of
workers that die every year in factory fires, particularly in Asia. In addition to the threats in
these factories, there are and continue to be long standing health threats in agriculture,
especially with pesticide exposures, mining and oil and fishing and forestry.

Migrant Workers

Given the absence of a willing domestic workforce, countries continue to look outside their
borders for low-skilled workers in agriculture, food process, constructing, manufacturing and
low-wage services such as domestic work, home health care and the sex sector.52 Meanwhile,
unemployment and increasing poverty have prompted many workers in developing countries to
seek work elsewhere. As a result, millions of workers and their families travel to other countries
in the hopes of finding work. Currently, there are approximately 2332 million migrants around
the world, compromising 3.1% of the global population. Women make up about half of migrants.
It is also estimated that about one in eight migrants are between the ages of 15 and 24. Migrant
workers contribute to the economy of their host countries, and often send any remaining
money home to their family, which boosts the economy of their place of origin. In most cases,
migrant workers often enjoy little social protection, face inequalities in the labor market and are
prime targets of human trafficking and other forms of exploitation.

24
While there has been greater integration of global markets for goods, services and capitals
across the world, the impact on the movement of labor and people is more complex; this
movement is regulated by numerous immigration laws and policies that uphold the principle of
state sovereignty. The main standards protecting migrant workers stem from the International
Labor Organization (ILO), the United Nations agency devoted to labor issues. The International
Labor Organization has two legally binding instruments that relate to migrant workers:
Convention No. 97 of 1949 (C97) concerning Migration for Employment and Convention No.
143 of 1975 (C143) concerning Migrations in Abusive Conditions and the Promotion of Equality
of opportunity and Treatment. C97 applied to the whole labor migration force. It governs the
orderly recruitment of migrant workers. It presents the principles of equal treatment with
national workers regarding working conditions, trade union membership, and social security,
including other policies that attempt to ensure equality. C143 provides a broader scope than
C97. This convention was adopted at a time when migrant abuses were rampant and attracting
public scrutiny. This convention devotes a section to irregular migration and to interstate
collaborative measures considered necessary to prevent it. The convention also imposes an
obligation to “respect the basic human rights of all migrant workers.”

In addition, the United Nations adopted the International Convention on the Protection of the
Rights of All Migrant Workers and Their Families (ICMW) in 1990, which came into force in July
2003. However, only 27 states ratified this document, none of which were countries that
ordinarily receive a large number of migrants. The International Convention on the Protection of
the Rights of All Migrant Workers and Their Families highlights the basic economic, social and
cultural rights that apply to both regular and irregular migrant workers. The document also
provides states with some leeway, allowing them to limit the rights of certain temporary
migrants, such as seasonal migrants.

The Universal Declaration of Human Rights recognizes the right of every person to leave any
county, including that person’s home country, and the right of that person to return to the home
country. However, there is not a corresponding right to enter or stay or work in a third country,
simply because up to this point, no state has surrendered that right under any international
treaty. This thus understandably restricts the mobility of persons from one state to another.

25
Despite the current existing legislation and documents, there are some overarching issues
appearing in the changing landscape of migrant workers since the legislation was adopted.
These three major issues include the feminization of the migrant labor force, states’ increasing
use of temporary workers and the ever-present hesitancy of states to agree to legally binding
documents.

Female migrant workers often accept jobs in unregulated low-skilled sectors such as domestic
work, childcare, and commercial sex work. This work tends to be irregular—in other words, it
does not follow a clear schedule—and particularly in the case of sex work often part of a larger
crime syndicate. While the ILO and UN conventions contain specific guidelines on how to
prevent criminal trafficking, they do not include suggestions or resources for how states can
investigate and attempt to regulate the industries in which women predominate. For example,
the International Convention on the Protection of the Rights of All Migrant Workers and Their
Families identifies certain types of workers, such as seasonal workers; yet does not reference
the specific sects in which women often hold jobs, such as domestic work. However, this is not
necessarily meant to imply in any way that the identification of separate categories of migrant
workers advances their protection; in some cases, the specific listing of groups, such as
seasonal workers in the ICMW, is accompanied with lessened protective measures.

Globalization has increased at an exponential rate the growth of temporary migrant worker
programs in numerous receiving countries. Their growth along with the flexibility associated
with this type of work is a major hindrance to its protection. In many of these countries where
these programs are rampant, workers can find it difficult if not impossible to change their
employment status and to gain residency and thus gain access to the range of potential
benefits in the country of their employment. In addition, many temporary workers utilize private
recruitment agencies to find their work. These companies are immensely competitive with one
another. Abuses stemming from this competition can take many forms included but not limited
to the deliberate misinformation about the working and living conditions for the prospective
migrants and the levying of incredibly high fees. Furthermore, the requirements that some
countries have that employers sponsor migrant workers can result in late payments, the last
minute changing of employment contracts, restrictions on freedom of movement and in certain
cases physical or sexual intimidation.

One large problem that consistently plagues the implementation of binding international
standards is the unwillingness of many states to sign documents with enforcement
mechanisms designed to regulate international labor migration and protect the rights of migrant
workers. In 1999, the International Convention on the Protection of the Rights of All Migrant
Workers and Their Families conducted a general survey to attempt to identify the obstacles to
the ratification of its documents. The survey concluded that there are 6 major hurdles
pertaining to specifically ILO legislation: “the incompatibility of national legislation with the
instruments’ provisions in many sending and receiving countries; national labor administrations’
lack of financial resources to implement the instruments’ the existence of difficult economic
situations and high unemployment rates in some countries with the result that preference is
given to national over foreign labor; the relative novelty of international labor migration for a
number of countries and the need to develop appropriate national measures; the specific
conditions of labor markets in certain countries; the view of some major sending countries that
the instruments are primarily concerned with addressing labor shortages in countries of
employment rather than the needs of sending countries.”

Furthermore, there is an increasing wealth of evidence about the gains to the global economy
that would accompany liberalization of migration, particularly that of lower skilled workers. The

26
Global Commission in International Migration contends that the world would benefit from a
well-regulated liberalization of the global labor market. Similarly, the World Bank simulated the
effects of the economy on an 3% growth in the labor force through migration over 2001-2025;
it predicted that from these 14.2 million workers, of whom 9.7 were low-skilled, the global
economy would experience gains totaling $700 Billion a year by 2025.

Many countries have adopted restrictive immigration policies that obviously place barriers on
the migration of low-skilled workers. Some contend that these policies restrict the mechanisms
by which the market would normally act to regulate itself. This is especially true when
considering the fact that many native workers have increasingly come to shun certain
occupations as incomes and living standards increase, forcing them to be almost solely
independent sectors such as agriculture, construction, cleaning, care work and domestic
service.

The high demand for low-skilled workers also partly arises from demographic aging-population
aging and population decline. The Eurostat demographic projections predict that in the EU25
the share of the population of working age will decrease by 52 million people from 2004 to
2050—from 67.2% to 56.7%, The Secretary-General’s report for the UN High Level Dialogue on
international migration and development highlighted the need for states to develop forward
thinking policies that take account for their future need for both low-skilled and highly skilled
workers. There, however, is as confirmed by the policies adopted by certain states a bias for
the admittance of highly skilled, not low-skilled workers.

This bias against immigration, particularly that of low-skilled workers is evident through
examining the dialogue surrounding the refugee crisis that has been plaguing the international
community for recent years.

Case Study: The Refugee Crisis

The Refugee Crisis has been a major point of developing news in recent years. The vast
majority of the current migration crisis stems from the conflict in Syria. Since armed conflict
between the Syrian government and opposition factions began in 2011, an estimated 11 million
Syrians have fled their homes. 13.5 million are in need of humanitarian assistance within the
country. Of those who are attempting to escape the conflict, many have sought refuge in
neighboring countries or within Syria itself. As per data collected by the United Nations High
Commissioner for Refugees (UNHCR), 4.8 million have fled to Turkey, Lebanon, Jordan, Egypt
and Iraq. An additional 6.6 million individuals are displaced within Syria itself. Meanwhile, about
one million have requested asylum in Europe. Germany and Sweden are the EU’s top receiving
countries. In 2015, Germany received more than 476,000 asylum applications. In 2018,
Germany 72% of Syrian refugees
protection regarding the right to
work without hindrance or
strings attached.

Germany’s initial acceptance of

Syrian migrants spearheaded by
Chancellor Angela Merkel won
her a resounding chorus of
international applause. However,
as the influx of migrants
continued, some of even

27
Merkel’s own supporters began to wonder how and where the migrants would be integrated in
the economy and how they would fit into the rest of German culture. Soon, deep cracks in
Germany’s welcoming culture appeared—spurred by the attacks perpetrated against German
citizens from those seeking asylum—and support for extreme right-wing anti-immigration
groups within Germany gained momentum.

While the Syrian Refugee obviously has numerous roots and has not been explained in detail to
any extent, it can serve as a way to think about the impact of economic globalization. Refugees
who have fled from Syria to Europe, particularly to Germany, do so with the hope of finding
some prospect of economic stability. There are certainly mixed feelings towards these migrants
throughout Germany, but some factory workers have seen the influx of workers as an
opportunity to increase their profits. In other words, since they know that, at least in the short
term, the influx of migrants will be relatively stable, they have an economic incentive to
minimize the wages they pay to these employees. Many of these migrants, especially those
who are in the country illegally, are in a particularly perilous position and thus out of fear of
their and their families own safety oftentimes cannot utilize available legal means even if they
knew their rights concerning their employment were being violated.

Bloc Positions
The main dividing lines in terms of bloc positions are between developed and developing
nations. Globalization is both helping and hurting both developed and developing countries, so
there is significant nuance between these two groups – some will be able to cooperate on
some areas of policy, and on others they will be diametrically opposed. Do not take these
positions as gospel; many developing nations are showing greater commitment to the
principles of a liberal trade system and the benefits of globalization than many developed
countries. Research the nuances of your individual country’s position and determine for
yourself under what context you could work with countries from different development
brackets.

Developing Countries

Developing countries are in some regards gaining from globalization, because the increasing
amount of globalization is allowing their quality of life to rise to newfound heights. However, at
the same time, the question emerges whether globalization is going to leave some nations as
permanently developing. In general, developing countries will appreciate the economic
advantages that their citizens have received from an increasingly globalized world, but will fear
the increased presence of foreigners. Developing countries may feel as if it is in the best
interest of their country to look inward and promote policies that are in the best interest of the
economic growth and development of their own country; in some cases, this may come in
direct conflict with what others believe is in the best interest of the international community.
Delegates representing developing countries will need to find a balance between fulfilling the
duty primarily to their citizens and then secondly thinking about what is in the best interest of
the international community.

Developed Countries

Developed countries have reaped huge financial gains from globalization. It has allowed the
citizens of their countries to obtain consumer goods for much lower prices. This has however
led to some circumstances of businesses outsourcing jobs to developing countries, which has
caused some domestic ire in certain nations. Developed countries will generally want to do

28
 what is best for the international community but also should recognize that any laws that
regulate MNCs will affect the citizens of the nations that they are representing. Developed
countries will want to try to create stricter standards for the treatment of migrant workers.

Questions A Resolution Must Answer (QARMAs)

1. Should countries be encouraged to put the interests of the international community above
that of their own nation? If so, how can this be achieved?

2. Should the United Nations attempt to regulate Multinational Corporations? If yes, how can
the committee do so without going out of its jurisdiction?

3. Should a certain form of foreign influence be encouraged by the United Nations?

4. Is there a way for trade relationships to develop between developed and developing
countries without having developed countries exert undue influence in the affairs of the
developing countries? How can these relationships be encouraged?

5. What mechanisms can be implemented to ensure that the specialization that results from
globalization does not further the divide between developed and developing countries?

6. How can migrant workers be protected especially when they fall in other disenfranchised
groups?

7. How can low-skilled workers be educated such that they can adapt to changes brought on
by technological innovations?

Position Paper Requirements

Delegates will have to send a Position Paper of an extension no longer than one page
(excluding the bibliography). The format to follow will be Times New Roman 11 or 12, single
spacing and margins not smaller than the Word standard. The document’s heading must
include the coat of arms of the represented country, its official name, the committee, the topic,
the delegate’s name and delegation. Regarding the body, it is composed of three paragraphs of
similar extension:

● First Paragraph: Information regarding the represented country, including the national
context related to the topic, measures that have been adopted in a national level and
the national policy within the topic.

● Second Paragraph: Actions taken by international organs in relation with the issue to
discuss, mainly by the United Nations. Besides, it is important to include how these
measures affected the country represented and what is its point of view on such
measures.

● Third Paragraph: Delegates must explain to detail the proposal(s) proposed to solve the
issue to discuss in the committee. This proposal must not go against the represented
country’s policy.

Position Papers are due on August 7th at 11:59 p.m. They must be sent in PDF format with the
following name format: “Country – Position Paper” to the following email address:
ssg@guise.edu.pe

29
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