Topic paper
The Pros and Cons of Globalization
BUSN 342
Current Topic #1
Recap
The Forbes article debates the pros and cons of globalization and provides
solutions on how to keep our trade partners accountable and trade agreements fair, so that
all nations can benefit equally from a global market. The primary objective of
globalization is to support multinationals expansion and economic gains by geo political
cooperation (Collins, 2015, para. 1). To conclude, the idea is all nations that choose to
join in a global economy will contribute and shift the world toward a more integrated and
interdependent world economy (Hill, 2014, p.6).
Discussion
The article specifically relates back to chapter one in the textbook on the topic of
globalization, and discusses the sub issues such as pros and cons, trade barriers, and
solutions to unfair trade practices (Collins, 2015, para. 34). In today’s world, economies
are integrated and dependent on each other for their imports and exports. The impact of
this is creating a concern though, on how and what should be allowed, in relation to free
trade and the wavering sometimes malleable agreements that go along with them. Critics
of globalization believe that by allowing free trade, with all importing and exporting
barriers removed between nations, may cause certain issues (cons) between more
economically developed nations and the lesser developed ones. Some would say that
GAAT (General Agreement of Tariffs and Trade) is enough as well as the creation of the
WTO (World Trade Organization) and others (Hill, 2014). An interesting polar mindset is
that Collins’ article points out is when you allow free trade globally, you are taking jobs
from developed nations and forcing the undeveloped to change quickly to factors of
production. (2015, para. 23).
The textbook gives another example of the U.S. and Western Europe
economization moving globally. These nations are known to be more economically
advanced than most. Some consequences of removing free trade barriers can be found in
manufacturing activities from these nations, allowing them to move elsewhere in pursuit
of advantages such as a cheaper labor force and steeper tax breaks of the lesser nations.
(Hill, 2014, p. 26). Social injustices are also on the rise as a result of exporting jobs.
Businesses are taking advantage of workers from less industrialized nations and paying
them wages that are drastically lower than developed nations (Hill, 2014, p. 26). Case in
point, look at Harwood Industries from the textbook. Harwood is a U.S. based or
headquartered clothing manufacturer. When they closed their U.S. operations and moved
it to Honduras, they went from paying former U.S. textile workers $9 dollars per hour to
paying Honduran workers 48 cents per hour (Hill,2014, p.26).
Another negative aspect of free trade is that regardless of established trade
agreements, some nations will not adhere to them in original form. Living proof of this is
China (Collins 2015, para. 37). China continually disregards trade rules with their
partners by means of currency manipulation which gives them unfair price advantages on
goods. China also imposes barriers, such as tariffs, on imports, and has been also known
to steal technologies from other nations, selling them as their own (Collins, 2015, para.
37). Collins’ article gives solutions on how to combat these issues. Collins believes that
the U.S. needs to elect strong leaders who will hold our trade partners accountable to
established trade agreements (Collins, 2015, para. 34-37). Inadvertently, this is actually
what the current administration of President Trump has spoken often on in media and
business correspondences.
When we think of a globalized economy, we tend to think only of major firms
who aid in or benefit from a global market. This is not the case though. Yes, large firms
do participate in a global market place, but they are not alone. Proof in case, according to
International Trade Administration, 98 percent of U.S. goods exported in 2010 were from
over 286,000 small and medium-sized domestic firms (Hill. 2014, p. 6). This as you can
see, benefits any to all sized businesses with free trade agreements. Supporters of
globalization conclude, by embracing a global market, several things can be
accomplished. Stimulated economic growth, lower cost of goods and services, increased
wages and job creation are a few of these (Hill, 2014, p. 24).
Reflection
Our Team believes globalization of markets is beneficial to all nations, so long as
trade is open and transparent for all nations to get a fair shot of the market and not just
specific ones. Furthermore, nations like China cannot keep manipulating the market and
stealing technologies and jobs through unfair labor practices without having some form
of recourse taken against them. If this does not change we would then be more adamant
with the anti-globalization mindset for as a nation, we would just be ideally working for
nothing, gaining likewise.
Secondly, accountability is a thing of the past, absenteeism and quickly dismissed
buyouts and mergers crossing all borders and even oceans is unanswered by our
government. Free market and competition is what drives economies making some better
than others due to how bad or intuitive their products are. Without this, nations will not
be able to reach their full economic potential, thus the concept of free trade that promotes
global economic growth, creates jobs, competitiveness, and lowers prices for consumers
will not be attainable (Collins, 2015, para. 6).
Thirdly, clear, concise contract language must be put down and enforced without
this, everything id a free fall. Skilled labor and must be attained and promoted within not
just America, but the world if they hope to stay competitive. Ultimately, nations and
firms will have to tailor their services or products to world markets with the ability to
adjust and adapt to changing trends or flows.
Additional Articles
An article published in the Economist was found that supports the idea that
globalization in general, is contributing more to society economically. The article informs
us that historically, there has been a vast improvement in global living standards due to
world trade, since the end of the Second World War (“Why they're wrong,” 2016, para.
4). Evidence shows that exports of goods rose from 8% of world GDP in 1950 to almost
20% a half-century later (“Why they're wrong,” 2016, para. 4). The textbook further
expands on this by stating, according to World Trade Organization (WTO) data, the
volume of world merchandise trade (not services) has grown faster than the world
economy since 1950 (Hill, 2014, p. 12). This is further evidence that the world is viewed
as a global market and that all nations can reap the benefits of free trade by lowering of
barriers.
References
Collins, M. (2015, May 06). The Pros And Cons Of Globalization. Retrieved from
http://www.forbes.com/sites/mikecollins/2015/05/06/the-pros-and-cons-of-
globalization/#3e4519a62170
Hill, C. W. (2014). Globalization. (8th ed.), Global business today (pp. 3-33). New York,
NY: McGraw-Hill/Irwin.
Why they're wrong. (2016, October 01). Retrieved from
http://www.economist.com/news/leaders/21707926-globalisations-critics-say-it-
benefits-only-elite-fact-less-open-world-would-hurt