Economic Globalization And Its Impact On The World

1331 Words6 Pages
Economic globalization is one of the most powerful forces to have shaped the postwar world. (Frieden, Lake and Broz 63) Free trade is the hallmark of a globalized system; reduced costs in transport and the elimination of trade barriers have led to a surge of international trade between developed countries and lesser-developed countries. The benefits of free trade extend internationally. Free trade promotes economic development in lesser-developed countries and increases imports to developed nations. But does this system of global trade benefit only manufactures and businesses or does it open up the market to everyone by creating new global business opportunities for the developing world. Free trade occurs when there are no artificial blockades put in place by governments to restrict the flow of goods and services between trading countries. When trade barriers, such as tariffs and subsidies are put in place, they protect domestic producers from international competition and redirect, rather than create trade flows. (Edge, n.d.) The problem with trade barriers and protectionism in general are the fact that the current world monetary system encourages financial market integration. The delegates who met at Bretton Woods in 1944 had a design for the world monetary system that explicitly did not accord financial markets the presumption that was accorded trade in goods, the presumption was that international integration was good and that barriers should be liberalized as rapidly
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