Investigate globalisation as a process of flows: trade, capital, labour and information; the role of trade agreements (WTO, RCEP, CPTPP); supply chain fragility; winners and losers; deglobalisation pressures and impacts on Australia

Note: This page is part of the HSC Geography 11-12 (2022) syllabus content, first examined in HSC 2025. The legacy 2009 syllabus content is preserved as reference for older revision material in the sibling module folders.

What this dot point is asking

The Global sustainability focus area asks you to investigate globalisation as a process of accelerating cross-border flows, evaluate the trade architecture that governs it, and understand the fragility that integrated supply chains create. You need to apply the geographical concepts of interconnection, scale and change, and use spatial reasoning (origin-destination flows, supply-chain mapping) as an inquiry skill.

The answer

Globalisation is the process by which economies, societies and cultures become increasingly interconnected through flows of goods, capital, people and information. It is not new (long-distance trade has existed for centuries), but the post-1945 period has seen its acceleration through containerised shipping, telecommunications, digitalisation and the dismantling of trade barriers.

The four core flows

• Goods. Containerised shipping (the standardised intermodal container, in use since the 1950s) is the backbone of global merchandise trade. Approximately 80 percent of global trade by volume moves by sea.
• Capital. Cross-border investment, foreign direct investment (FDI), portfolio flows and remittances. Financial markets operate around the clock.
• Labour. International migration (skilled and unskilled), temporary labour mobility, and the rising share of remote work makes some service labour location-independent.
• Information. Internet, undersea cables, satellites and cloud platforms enable near-instantaneous global communication.

These flows are uneven in their geography: certain shipping routes (the Strait of Malacca, Suez Canal, Panama Canal), certain financial hubs (New York, London, Singapore, Hong Kong, Shanghai), and certain data corridors carry disproportionate shares of the world total.

The trade architecture

• World Trade Organization (WTO). Established in 1995 as the successor to GATT (in force from 1948), the WTO sets rules for international trade, hosts negotiations and operates a dispute-settlement mechanism. Its appellate body has been weakened by member-state disagreements in recent years.
• Regional Comprehensive Economic Partnership (RCEP). Signed in 2020, in force from 2022, between Australia, New Zealand, China, Japan, South Korea and the ASEAN member states. It is the largest trading bloc by combined GDP and population.
• Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). In force from 2018, with eleven Asia-Pacific signatories including Australia, Japan, Canada and Mexico. The United Kingdom joined in 2024.
• Bilateral free-trade agreements. Australia has FTAs with the US, China, Japan, South Korea, India, Indonesia and others.
• AUKUS (Australia, United Kingdom, United States, announced 2021) is a security-and-technology partnership rather than a trade agreement, but it forms part of the broader Indo-Pacific strategic context within which trade policy operates.

Winners and losers

Globalisation has lifted hundreds of millions of people in East Asia (particularly China and Vietnam) out of poverty through manufacturing-led growth. It has lowered consumer prices and expanded choice in importing countries. However, it has also produced costs:

• Deindustrialisation in some regions of high-income countries (the US Midwest, parts of the UK and Australia), with concentrated job losses in manufacturing communities.
• Environmental externalities including emissions from long-distance freight and offshored pollution from manufacturing.
• Tax-base erosion where multinationals shift profits to low-tax jurisdictions.
• Cultural homogenisation concerns alongside cultural exchange benefits.

Supply chain fragility

Global supply chains rely on just-in-time (JIT) inventory: minimal stock, on-demand delivery. JIT lowers cost but creates fragility. Recent disruptions:

• COVID-19 pandemic (from 2020). Factory closures in China, shipping container imbalances, port congestion in the United States, semiconductor shortages, and labour shortages in logistics cascaded through global supply chains for two to three years.
• Suez Canal blockage (March 2021). The container ship Ever Given grounded sideways in the Suez Canal for six days. Approximately 12 percent of global trade by value flows through Suez. Disruption was global.
• Russia-Ukraine war (from 2022). Disruption to grain, fertiliser and energy supplies. Food-price spikes in import-dependent countries.
• Red Sea / Houthi attacks (from late 2023). Rerouting of container traffic around the Cape of Good Hope, adding time and cost.

Deglobalisation pressures

A number of forces are pushing back against the integrated globalisation of the 2000s:

• Strategic competition between the United States and China, including tariffs, technology export controls and decoupling in semiconductors.
• Reshoring and friend-shoring of strategic industries (semiconductors, critical minerals, pharmaceuticals).
• Climate policy including the EU Carbon Border Adjustment Mechanism (CBAM, phasing in from 2023-2026), which prices the carbon content of certain imports.
• Geopolitical realignment following the Russia-Ukraine war and Middle East conflicts.

This is sometimes labelled deglobalisation or slowbalisation. Global trade as a share of GDP has plateaued or modestly declined from peaks in the late 2000s, although flows remain very large in absolute terms.

Impacts on Australia

Australia is a small, open economy heavily integrated with the global system. Key features:

• Export concentration in iron ore, coal, LNG, education, tourism, agriculture and increasingly critical minerals.
• Major export partners include China, Japan, South Korea, India, the United States and ASEAN.
• Vulnerability to commodity price swings (iron ore), single-market dependence (the 2020 China trade restrictions on Australian wine, barley and other goods illustrated this), and supply-chain disruption.
• Trade diversification has become an explicit policy goal, supported by RCEP, CPTPP, and bilateral agreements with India (ECTA), the United Kingdom and the EU (negotiations ongoing).

Examples in context

Example 1. The 2021 Suez Canal blockage. In March 2021, the container ship Ever Given ran aground in the Suez Canal, blocking the waterway for six days. Approximately 12 percent of global trade by value passes through Suez, and the blockage caused a backlog of more than 400 vessels. Shipping rates spiked, deliveries were delayed by weeks, and the event added to existing COVID-19 supply-chain stress. A strong response uses Suez to illustrate: the spatial concentration of global trade through choke points; the cascading effects of disruption in a just-in-time system; and the role of geographical analysis (mapping shipping lanes, identifying chokepoints) in supply-chain risk assessment.

Example 2. RCEP as Asia-Pacific trade integration. The Regional Comprehensive Economic Partnership (signed 2020, in force from 2022) brings together Australia, New Zealand, China, Japan, South Korea and the ten ASEAN member states. It is the largest free-trade bloc by combined GDP and population. It reduces tariffs on a wide range of goods, harmonises rules of origin and provides a single regional framework. A strong response uses RCEP to illustrate: how regional integration can proceed even when global negotiations (WTO Doha Round) stall; Australia's strategic positioning in the Indo-Pacific; and the interplay between economic agreements and strategic relationships.

Try this

Q1. Identify the four core flows of globalisation and give one example of each. [4 marks]

• Cue. Goods (containerised shipping). Capital (FDI, remittances). Labour (international migration, temporary work visas). Information (internet, undersea cables). One specific example for each.

Q2. Analyse how a named disruption (COVID-19, Suez 2021, Russia-Ukraine, Red Sea attacks) exposed supply-chain fragility. [6 marks]

• Cue. Pick one. Trace the mechanism: what was disrupted, what cascaded, how producers and consumers were affected, what the response was (rerouting, inventory build-up, reshoring). Use scale (global effect of a localised event) and interconnection.

Q3. Evaluate the impact of globalisation on Australia, considering both economic and sustainability dimensions. [8 marks]

• Cue. Benefits: export markets, lower consumer prices, investment, migration-driven workforce growth. Costs: concentration risk (China dependency), emissions from freight, deindustrialisation in some regions, vulnerability to disruption. Use scale, interconnection and sustainability. Reach a calibrated judgement.