Globalization and International Free Trade

The enhanced technological developments have led to the proliferation of international free trade and globalization over the recent years. Generally, globalization refers to the process used by organizations and businesses to gain influence worldwide or begin operating internationally. On its part, free trade denotes business activities or operations conducted globally without quotas, tariffs, or other restrictions. Diverse opinions exist over the framework of international free trade and globalization. Some policymakers claim the imposition of import quotas and tariffs weakens the overall economic welfare. They also argue that globalization has opened new trading avenues, transforming the world into a global society. However, opponents say that reducing or eliminating trade barriers negatively affects the local traders due to intense competition from foreigners (Kantor & Judd, 2013). They argue the government has the mandate to protect its people from external investors. Essentially, the subject of international free trade and globalization has attracted two opposing sides, each group supporting its arguments based on economic development, consumer exploitation, and loss of trading control, among other factors.

Proponents use the merits of international free trade and globalization to support their arguments. Firstly, they claim the free trade encourages specialization, thus strengthening a country’s comparative advantage (Kantor & Judd, 2013). Globalization inspires producers and companies to embrace the division of labor. As a result, nations capitalize on producing products, which they have a comparative advantage over their trading partners. The specialization ensures that consumers get high-quality commodities that meet their needs. Additionally, countries with a comparative advantage in a specific sector will produce goods at low costs leading to reduced pricing of the products in local and international markets. Indeed, in a global free trade system, nations utilize their resources prudently and efficiently by selling the commodities, they produce better than other countries. In this way, they avoid misuse of the available capitals by engaging in business activities requiring complex production procedures. Therefore, a comparative advantage emanating from globalization and free trade promotes income growth in open economies.

Secondly, free trade and globalization promote the accessibility of goods and services. With the restricted trade, some countries find it challenging to access commodities, which they cannot locally produce. The insufficiency of the goods and services leads to price increase and proliferation of the illegal market (Kantor & Judd, 2013). Free trade comes to save the world from these commercial ills. For instance, globalization and free trade enable nations to get products, which they do not produce at a low cost. Consequently, they are not compelled to manufacture or produce goods at a loss or inefficiently to meet the increased demand because they can access them elsewhere. Free trade also allows swift procurement of raw materials unavailable domestically at affordable prices. Globalization and free trade increase the accessibility of essential goods and services and promote the exchange of raw materials among industries and countries.

In addition, free trade and globalization have revolutionized infrastructural development and increased government revenue. According to Kantor & Judd (2013), free trade eliminates bureaucratic interferences and corruption, thus promoting legitimate business activities. With free trade, many people ranging from small to large-scale traders can engage in commercial activities with domestic and global clients. The government benefits from augmented trading operations through levies and licenses. The revenues gained from globalization inspire the international administrations to develop their infrastructure. As a result, many countries globally have well-established transport systems, industrial parks, and communication channels. For example, developing countries have embraced teleconferencing and online payment platforms, contributing to expanded global revenues. The international community has to adopt free trade system to reap its economic and infrastructural benefits.

Finally, globalization enhances global cooperation, thus strengthening trade and peaceful coexistence. Free trade promotes openness in international commercial operations leading to the spread of democracy. According to Kantor & Judd (2013), globalization and free trade safeguard business ethics, which protect people, especially the low- and middle-class traders, from discrimination. With transparency and accountable trading rules and regulations, leaders can promote global stability and peace through political and economic partnership. The commercial benefits accrued by different segments of the population lead to equity in the distribution of wealth and prosperity. Accordingly, there is the empowerment of less privileged individuals resulting in lessening the absolute poverty rate.

Notwithstanding, the antagonists of free trade and globalization also raise some rational concerns. For instance, they argue that countries have lost their state sovereignty with increased globalization. According to Kantor & Judd (2013), local cities cannot compete with established urban towns in different spheres due to financial limitations. Equally, the same fate awaits the developing nations because they cannot match the technological prowess of the developed countries. Global trade restricts the capacity of individual states to control local economies. The international laws and organizations also limit the decision-making abilities of the respective countries. With these restrictions, the local companies and businesses lose their revenues to established foreign organizations and developed nations.

Globalization has also pursued the interests of the elite groups leading to increased inequality. The citizens hardly participate in making free trade and globalization regulations (Kantor & Judd, 2013). They depend on the decisions of political leaders who represent them. Unfortunately, the majority of them pursue selfish interests at the expense of the welfare of their people. For instance, there was a significant public uproar during the passing of the North American free-trade agreement (NAFTA) policy due to underlying personal interests of business-media elites. Nevertheless, the mass media utilized propaganda to ensure the proposal became law. This example demonstrates how some globalization policies are shaped to benefits some people or groups at the expense of others. With such undemocratic processes, free trade and globalization fail to guarantee equal distribution of benefits and costs, leading to overburdening less privileged countries and society members.

Lastly, opponents claim that free trade and globalization cause environmental pollution and dumping. Least developed countries (LDCs) often have less effective pollution legislations compared to developed nations. Accordingly, foreign companies capitalize on these loopholes to release untreated gases and effluent to the environment. Such behaviors lead to the increased spread of illnesses such as chronic respiratory diseases, cholera, and lung cancer. LDCs have also become overdependent on the goods and services from the developed nations with increased globalization. This dependency has escalated the dumping and smuggling of products across borders (Kantor & Judd, 2013). The low costs of dumped or smuggled goods have rendered local production unprofitable. As a result, LDCs find it challenging to empower domestic industries leading to their collapse, and ultimately job losses.

Based on the arguments of both sides, globalization and free trade seem inevitable in the contemporary business model. People cannot disregard technological developments and the dire need to embrace diversity. The enhanced global interactions have helped individuals from different parts of the world to appreciate cultural diversity. Such engagements have promoted international cooperation and formulation of policies, which facilitate the economic stability worldwide. However, opponents raise some critical issues such as dumping and the control of factors of production by the elite groups. With appropriate policing, the international community can reap the benefits of globalization and free trade as a whole. It is illogical to criticize globalization on accounts of dumping and pollution, yet the developing countries have failed to enact the necessary regulations. Moreover, even before increased globalization, local industries were struggling due to ineffective marketing and administration barriers. The selfish interests of the political elites in the developing nations hinder their efforts towards industrialization and capitalizing on their comparative advantage. Therefore, it is upon the LDCs to develop practical and feasible legislations, which best suit, their economic models to benefit from free trade.

The hot debate on free trade and globalization has led to two sides, one group-opposing while the other supporting the idea. The supporters argue that globalization increases government revenue, promotes international cooperation, encourages specialization, and improves infrastructural developments. For instance, they say that globalization is inevitable in the information age due to enhanced global communication and payment channels. People can engage in business activities with foreigners within minutes without physical movements. Indeed, the seller can ship products to the buyer with ease with transportation and communication infrastructure development. The enactment of international free trade agreements has made globalization become a reality. Indeed, globalization and free trade are inseparable, as the two seem interdependent. Nevertheless, there are some concerns relating to job loss, elimination of the local industries, and control of the trade by the elites. Although these challenges exist, the majority of them can be addressed through practical and rational policies. Therefore, it would be irrational to criminalize free trade and globalization, yet their merits substantially surpass the demerits.

Reference

Kantor, P., & Judd, D. R. (Eds.). (2013). American urban politics in a global age: The Reader (7th ed.). Pearson Education.

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