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