Question

What is meant by the term “globalisation”? What is the difference between “shallow” and “deep integration”?

Answer 1

Globalization is thee process of integrating the economies by ensuring smooth flow of services and goods among nations. Globalization boosts the movement of goods, technology, information and services across the borders of the nation. It enhances the interdependence between countries. The globalization increases the global competition, creates large variety of choices to the ultimate customers and drives the price of products down. It enables free trade among countries and boosts the economic growth.

Shallow integration refers to the elimination of barriers in trade such as tariff and quota at the border. Shallow integration aims at harmonization of standards, laws and regulation for trade. Shallow integration take place when majority of products are manufactured in a particular country and sold in abroad. Shallow integration is a trade liberalization. Whereas, under deep integration refers to trade agreements which regulate business environment in a general way. It also includes non tariff trade restriction and rules. Deep integration takes place when majority of multinational corporations sell goods across the border. It is considered to be more co0ntavential than shallow integration. The issues related to deep integration includes product standard, public procurement, competition policy, property rights etc.