TRANSPORTATION - BTS - Bureau of Transportation Statistics

GlobalizationIn the last quarter-century, a host of political, economic, andtechnological changes noticeably accelerated the trend towardglobalization. Political changes included the end of the Vietnam War(1975) and the Cold War (with the fall of the Berlin Wall in 1989 andthe Soviet Union in 1991). Complementing these political developments,an increasing number of countries abandoned their policies ofprotectionism and lowered barriers to free trade. At the same time,technological innovations in communications and transportationfacilitated the flow of goods, people, and information across the globe.Today, the rise of Internet commerce is driving the expansion of theglobal marketplace, underscoring the need for a transportationsystem that is international in reach.Faster and cheaper transportation systems allow multinationalcorporations to build manufacturing facilities across the globe whilemaintaining scheduled, frequent deliveries of parts and finishedproducts. For example, advances in the aviation system allowbusinesses to substitute just-in-time deliveries from remote manufacturingplants in place of large inventories. Today, about one-third ofworld trade consists of shipments between branches of multinationalcompanies [UN Annual].chapter 4The extent of this manufacturing expansion is visible in manycountries, including Mexico, China, India, South Korea, Indonesia, Thailand, Turkey, andPakistan. In 1980, manufactured goods as a share of exports exceeded 50 percent only inGlobalization involves theincreasing internationalintegration of productionprocesses and the market forgoods and services. It resultsfrom the liberalization ofnational economies,reduction of trade barriers,freer movement of foreigndirect investment (FDI)across the world, expandingrole of multinational firms ininternational production andgrowing intrafirm tradeacross national boundaries.Lata ChatterjeeTransportation, Globalization andCompetitiveness: A Review and Synthesis ofLiterature, Bureau of TransportationStatistics, August 2000.Figure 4-1Proportion of Manufactured Goods as a Share of Total Value ofMerchandise Exports: 1980 and 19971008019801997Percent6040200Mexico China India South Korea Indonesia Thailand Turkey PakistanSource: The World Bank, World Development Indicators (Washington, DC: 1999), p. 204, table 4.5.4-1