Benefits And Long Term Repercussions Of Free Trade And Economic Globalization

With the onset of globalization, trade barriers have diminished. This results in easier and faster transport of goods, and increase in foreign investments that create more job opportunities. In addition, the perpetuation of free trade reduces the possibility of beginning a war. However, let us be reminded that its economic pros are not universal and absolute. Although most benefit from it, unfortunate nations may still lag far behind. Furthermore, rich countries can take advantage of low wages, cause environmental damages to poor countries with limited pollution regulation and control, and impede home

The advantages of free trade- The law of comparative advantage comes into play when a country engages in free trade. This means that a country will be selling goods and services that it can produce at a relatively low cost and buying those that would be costly to produce. It also is in an advantageous position as it can get a wide variety of goods at the cheapest price possible. International trade also promotes competition in domestic markets and allows the consumers to purchase a wider variety of goods at lower prices. Too much regulatory policies that reduce trade also retard economic progress. This includes limiting entry of new firms in various businesses. Regulations that give priority to political authority over the rule of law and freedom of contract always undermine gains from trade. This creates the problem of corruption, red tape, and inefficiency. When they set the price above the market price, consumers are discouraged to purchase them. Allocation of capital into wealth creating projects is a sign of vibrant capital market. It is essential to have mechanisms capable of efficiently using the available resources for a country to realize its potential. Investment in capital needs to be consumption-oriented. The value of the additional output derived from the investment needs to exceed the cost of investment. The country needs to invest its resources in productive endeavors. In the modern economy, the capital market plays an important role (p. 51-89).

Since the 20th century, people have become globalization in their social life. The actions of people and the view of the city are almost the same with other countries. Globalization is not the fashionable word in the world, it is an important word of human economics. There have some economic professions said it could be dangerous of the transaction in different countries, such as global economic crisis. However, globalization has some positive points that it makes people’s lives become better. Even though it has some negative effects on the human such as air pollution, but it also has many positive effects. Nowadays, not only the government, but also people are enjoying globalization in economics, immigration, and knowledge.

There is no doubt that increasing in international trade is supporting the economic growth across the world, raising incomes and creating jobs. However, international trade can also some create economic obstacles, such as the international context and the market policy and regulations of each country, and consequently it can be said that the effects would have positive and negative sides, and it is useful to mention all of them and to take them into consideration.

Prior to 1994, trade and the environment were two entirely separate issues. There were no environmental regulations found in the General Agreement on Tariffs and Trade (GATT) or in the Free Trade Agreement (FTA). Upon the signing of the North American Free Trade Agreement (NAFTA) environmental concerns of North America as a whole were for the first time provided within a side agreement to the NAFTA. Finally there is a trade agreement that recognizes the concerns of North American citizens to maintain a healthy, sustainable environment, where the damaging effects of free trade could be minimized. The NAFTA entailed provisions for stricter environmental regulations

Technology has made the world a smaller place. Recent innovations in jets, satellites, and computers have made communication across the globe faster. People are now able to travel to any destination they want in less than a day, so why can’t businesses travel as well? Globalization intends to answer that question. New technology has increased worldwide trade and investment by allowing more companies to trade at a faster rate. Thomas Friedman considers globalization to be “farther, faster, cheaper, and deeper than ever before” (9). Multinational corporations that have entered globalization can now trade their business wherever labor is the cheapest.

Global trade has grown massively since World War Two, international trade in manufactured goods has grown an estimated 100 times from $95 billion to $12 trillion in the 50 years since 1955.

To cut costs, companies relocate their factories to areas with minimal pollution regulations to produce more with lower prices. Without tariffs, “trade without borders” become more much accessible and gratifying multibillion dollar corporations. Free trade agreements such as NAFTA and WTO do not consider the ecosystem and thus, endanger biodiversity and vital natural resources. Globalexchange.org states, the creation of free trade agreements imperil “global diversity by accelerating the spread of genetically engineered crops, … and erodes the public’s ability to protect our planet for future generations.” All in all, the absence of environmental regulations in free trade agreements severely damage the biosphere.

The accelerating pace of international trade is one of the most dominating, and important features, of contemporary life. Globalization is creating widespread changes for societies, economics, and governments. Since the invention of the steam engine, transportation and communication limits have faded away and, with the development of the Internet, practically disappeared. A case can be made for the proposition that trade, throughout history, has been the main engine for the development of the world as we know it today. In his book, A Splendid Exchange: How Trade Shaped the World, William J. Bernstein makes this case.

Free trade is the concept of countries establishing an open, unrestricted market for imported and exported goods. Free trade between two or more nations is usually established through agreements such as NAFTA. The impacts and consequences of free trade vary wildly. Environmentally issues arise with free trade agreements as these agreements can strip away any country’s local environmental protection laws. Also, free trade can lead to destruction of habitats and forests (including rainforests) in order to create more things to export. Free trade also affects people, on a scale from an individual to an entire workforce of people.

Free trade has long be seen by economists as being essential in promoting effective use of natural resources, employment, reduction of poverty and diversity of products for consumers. But the concept of free trade has had many barriers to over come. Including government practices by developed countries, under public and corporate pressures, to protect domestic firms from cheap foreign products. But as history has shown us time and time again is that protectionist measures imposed by governments has almost always had negative effects on the local and world economies. These protectionist measures also hurt developing countries trying to inter into the international trade markets.

Those who oppose free trade do so because they view it in zero-sum terms instead of absolute terms. President Trump’s views on trade is similar to this zero-sum way of thinking. He claims that trade has decimated manufacturing in America, despite evidence that says that automation and productivity are the main culprits for this decline. Writing in Foreign Affairs, Douglas Irwin, points to “one representative study, by the Center for Business and Economic Research at Ball State University, [that] found that pro¬ductivity growth accounted for more than 85 percent of the job loss in manufacturing between 2000 and 2010” (Irwin, 2016). The president also seems to not understand that trade lowers prices for consumers. A Mercatus Center paper

mm One of the central problems of international trade is a debate about the feasibility of, on the one hand, free trade, ie, trade is not limited to any barriers to the movement of goods between the two countries, and on the other -.. to establish such barriers in order to protect national Producers from more competitive foreign suppliers. Supporters of both free trade (free trade) and protectionism put forward a number of arguments in support of their position.

”Free trade policies have created a level of competition in today's open market that engenders continual innovation and leads to better products, better-paying jobs, new markets, and increased savings and investment” (Denise Froning). Though Free trade plays a huge role in the economy today because of what and where it is used. Free trade allows for traders to trade across national boundaries and other countries without government interference. Meaning that traders have very few regulations that allow for them to do this without the government intervening. Free trade makes things for traders much easier and also allows for many more jobs in the US, such as exporting jobs, or jobs in the auto industry and plants. Though there are many

Globalization is the process of increased interconnectedness among the countries most in the most known popular areas of economics, politics, social, and culture. All of these areas are key aspects of each country and what makes them individualized. Globalization allows for countries to be able to be individuals without the conflict of their differences because of the power used to work as a whole globe. Globalization is a positive thing for the entire world, it allows for lots of development in our world by the connection there is between all of the countries interdependence on each other. The different points of globalization claim that it will lead to convergence of income, access to knowledge and technology, consumption power, living standards, and political ideas.