Running head: IMPORTANCE OF GLOBAL TRADE
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Discussion Board Forum 1: Importance of Global Trade
Key Term and Why You Are Interested in It
Global trade is something that impacts all facets of American daily life. It impacts what
and how we buy as consumers, it impacts domestic and foreign political discussions, and it
impacts the stability of our financial institutions and investments. As a military officer, US policy
decisions regarding global trade can have immediate and potentially violent repercussions for
military forces. The ongoing trade war between China and the US is one ongoing example that
could be cited for potential future conflict. The issues that can arise from global trade and its
importance in an era of great power competition cannot be understated. Historically, global trade
has generally provided positive impacts to those affected by it. It interest me because sustaining
its positive impacts requires continual development, communication, and innovation.
Explanation of the Key Term
Global trade is a key output of globalization. It is the result of the growing integration of
economies and societies globally (Satterlee, 2018). Global trade creates interdependencies
between nations. An example of this economic interdependency is found in the Chinese-US
economic relations expansion from $2 billion in 1979 to $579 billion in 2016 (Li & Lin, 2018).
The increase in global trade between different countries is an important factor in raising living
standards, providing employment, and enabling consumers to enjoy a greater variety of goods.
As trade has increased, political decisions regarding policies that control global trade have also
increased. By seemingly yielding some aspects of sovereignty, nations have been able to increase
the prosperity of the citizens that it is mandated to serve. This concept tends to go through cycles
and can be dependent on the success of the domestic environment. Finally, global trade impacts
our social and cultural understanding of the world. As a result of global trade, the norms and
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systems that were considered a foundational aspect of each nation have gone through change.
Global trade has required individuals and nations to cooperate for mutual success and as a result
our social and cultural understanding has evolved to have a greater appreciation for diversity. All
of these factors contribute to clearly defining and understanding the role that global trade has in
our lives.
Major Article Summary
Klaus Meyer wrote about the importance of global trade and the need to understand the
economic and institutional arguments motivating the anti-globalization movement. Specifically,
Klaus addresses how globalization generally benefits most societies, but some groups do not
benefit unless specific remedial action is taken. It has been shown that if these fringe groups are
not supported, they can cause political disruption to global trade and as a result, impact the
economic prosperity enjoyed by the majority of people within the system (Myer, 2017). The
author outlines how an era of anti-globalization can create significant challenges for international
business practice, research and education.
The author identifies and analyzes two sets of concerns of the anti-globalization
movement: the unequal distribution of the benefits of globalization and emergent constraints on
national sovereignty. By addressing these two common grievances, Klaus demonstrates how in
fact globalization has been a major source of economic growth and prosperity. The journal
highlights how global trade allows greater specialization of national economies and pooling
resources across nations, which increases productivity and economic growth (Myer, 2017). The
result of the global trade systems is that is has made people around the world better off on
average.
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In addressing the issues of global trades unequal distribution of benefits, Klaus Meyer
conceded that it is difficult to design policies that remedy the negative side effect of free trade on
people with industry-specific qualifications or with low skills. He demonstrates how
contemporary economic debates suggests that free international trade continues to provide the
most potential to do good for participating societies, yet there are still well-founded concerns
regarding the unequal benefits of international trade and the substantive adjustment costs for
people with specific or low skills (Meyer, 2017). The challenge is for leaders in the public and
private sector to develop solutions to better share the benefits of global trade. The author
recommended that more countries could develop systems similar to countries in Europe, in
which they have extensive training schemes for manually skilled workers to enter. The European
apprenticeship system offers opportunities because it not only generates a workforce that is the
backbone of productivity in Germany, Switzerland and neighboring countries but also provides
career perspectives for those who do not find the intellectual pursuits of a university degree
appealing (Meyer, 2017).
Regarding individual sovereignty, the author addresses the concern that committing to
various international trade and investment agreements impose constraints on national policy
makers to regulate their country according to the preferences of their citizens. The overall
deduction suggests that globalization has some negative side effects on some aspects of national
sovereignty (Meyer, 2017). These concerns, however, do not outweigh the potential benefits of
globalization for societies at large. They call for targeted intervention and modification of some
of the rules of the global economy.
The article concludes by admonishing the public to continue actively seek improvement
to the global trade system, communicate ideas across cultures and political parties, and hold the
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system accountable to do what it was intended, which is promote greater prosperity for all. The
overriding concern is that continued improvement will not occur, the anti-globalization and
global trade movement gains further momentum within national governments and as a result,
policies are enacted that force each country and the overall system into an economic downward
plummet.
Discussion
The Klaus Meyer study relates to the topic of global trade and my explanation of it in
several ways. First, the study highlights the importance of global trade by demonstrating how it
benefits most members of our society. Second, it discusses the limitations of the system and
identified areas for potential future improvement. Finally, it provided specific recommendations
for sustaining global trades positive impacts and how the system is dependent on continual
development, communication, and innovation. The study also supplements the assigned course
content by further solidifying the fact that global trade is a key output of globalization. Global
trade creates interdependencies between nations (Satterlee, 2018). Global business encourages
companies to export and facilitates information flow across different markets which helps
companies realize opportunities and launch more diversified products. Global trade as an aspects
of globalization is continuously adjusting to various developments. In the last 20 years, global
trade has been most changed by transportation and communication technology. More recently the
world has seen an increased shift in global trade as a result of politics. These political
developments historically act much like a pendulum swinging back and forth with time. Both
readings from Meyer and Satterlee tie to the core concept of this week by discussing how
globalization may best be described as a combination of continuous technological advances and
a swinging pendulum of government policies that drive global trade.
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The Klaus Meyer study relates directly to the additional four articles I researched this
week. The first article addresses the economic impacts of a possible China-US trade war. In the
article, the authors identify many of the same positive outcomes of global trade that Meyer and
Satterlee address. It specifically discusses how China now is the US’ second-largest merchandise
trading partner, third largest export market, and biggest source of imports. China-US mutual
trade and investment relations benefit both countries, the US provides China a big exporting
market, and the US imports of lower-cost goods from China greatly benefit US consumers.
China is also the second-largest foreign holders of US Treasury securities, which helps US to
keep interest rates low (Li, He, & Lin, 2018). The key linkage of a trade war between these
countries as it relates to global trade is the impact that two countries could have to the whole
system. Effects of the China–US trade war to the world as a whole are negative. World total
welfare, GDP, manufacturing production and employment, export, import, and total trade all
decrease except non-manufacturing production (Li, He, & Lin, 2018).
The study focusing on the global trade effects of cross-border e-business also highlighted
the importance of digital purchasing methods on the global system. Cross-border e-business
overcomes the problems of geographic distance and can be less expensive than having a physical
presence in a country. The Internet can have a positive effect in lowering operation costs and
expanding the accessibility of information to companies. The Internet can help companies make
efficient foreign market expansions based on international transactional efficiency, experiential
learning, and reduced sunk costs (Huo, Hung, Wang, & Xiaoli, 2017). When discussing global
trade, it is clear that the internet plays an important role in the international expansion of
companies. In the Internet era, information is perceived as a resource that generates value by
sharing.
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As the Meyers and Satterlee readings discussed areas of improvement in global trade
practices, the article on redefining corporate social responsibility provided tangible concepts that
could reduce the benefits gap in some consumer classes. The article articulated the increasing
call for corporations to take responsibility for their impacts on stakeholders and for greater
transparency with regard to corporate nonfinancial risks and environmental and social impacts.
The notion that corporations should engage in socially responsible business practices, also
known as corporate social responsibility, has become embedded in the landscape of law and
business. Many governments have also enacted policies that mandate socially responsible
behavior and regulations intended to strengthen further corporate social responsibility. It can also
be found in international voluntary corporate social responsibility codes, including the United
Nations Global Compact (Global Compact) (Berger-Walliser & Scott, 2017). The Global
Compact provides companies with ten principles to guide their business activities in a socially
responsible manner as well as a set of sustainable development goals to eliminate extreme
poverty while protecting the environment. The Ten Principles, which include the protection of
human rights, elimination of discrimination, and initiatives to promote greater environmental
responsibility, are drawn from other international codes, including the U.N. Universal
Declaration of Human Rights and the OECD Guidelines for Multinational Enterprises (OECD
Guidelines) (Berger-Walliser & Scott, 2017). This article is a great example of how
organizations, governments, and corporations are continually striving to maximize the benefits of
global trade to all groups that are part of the system.
The final article tied all the concepts together by researching globalizations current issues
and directions for future research. The author acknowledges that definitions within global studies
remain diverse, globalization scholars all emphasize that the world is not only becoming more
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connected but that people are also increasingly becoming of increased connection. Some people
are clearly more resistant than others being interconnected and instead prefer emphasizing
national sovereignty and protectionism, in order to better insulate themselves for foreign forces
beyond their immediate control (Janssens, Maddux, & Nguyen, 2019).
Global trade and a result of globalization has clearly brought with it positive changes,
such as increased GNP and national wealth, exposure to new ideas and customs, increased
quality of life, and sense of global solidarity with humanity. Inversely, at times it has also led to
greater division between rich and poor, exploitation of labor forces, and a loss of national
sovereignty to foreign powers and multinational corporations. It is clearly evident that global
trade is important to us now and in the future. It is our responsibility to continue to create
opportunities to balance competition and cooperation with individuals, groups, cultures, and
societies.
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References
Berger-Walliser, G., & Scott, I. (2017). Redefining Corporate Social Responsibility in an Era of
Globalization and Regulatory Hardening. SSRN Electronic Journal. doi:
10.2139/ssrn.3054199. Retrieved from: http://web.a.ebscohost.com.ezproxy.
liberty.edu/ehost/detail/detail?vid=0&sid=8f4fbd55-23fc-4ca4-83ec-
4a89bd492ab8%40sessionmgr4008&bdata=JnNpdGU9ZWhvc3Q
tbGl2ZSZzY29wZT1zaXRl#AN=127766232&db=tsh
Huo, D., Hung, K., Wang, H., & Xiaoli, X. (2017). Country of origin and online promotion in
cross-border e-business: A study of consumer behavior for quality management.
The International Trade Journal, 32(1), 140–149. doi: 10.1080/08853908.2017.1387082.
Retrieved from: https://wwwtandfonlinecom.ezproxy.liberty.edu/doi/full/10.1080/088539
08.2017.1387082?scroll=top&needAccess=true
Janssens, M., Maddux, W. W., & Nguyen, T. (2019). Globalization: Current Issues and Future
Research Directions. Negotiation and Conflict Management Research, 12(2), 174–185.
doi: 10.1111/ncmr.12149. Retrieved from: https://onlinelibrary-wiley-
com.ezproxy.liberty.edu/doi/full/10.1111/ncmr.12149
Li, C., He, C., & Lin, C. (2018). Economic Impacts of the Possible China–US Trade War.
Emerging Markets Finance and Trade, 54(7), 1557–1577. doi:
10.1080/1540496x.2018.1446131. Retrieved from: https://www-tandfonline-
com.ezproxy.liberty.edu/doi/full/10.1080/1540496X.2018.1446131
Meyer, K. E. (2017). International business in an era of anti-globalization. Multinational
Business Review, 25(2), 78–90. doi: 10.1108/mbr-03-2017-0017. Retrieved from:
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https://search-proquest-com.ezproxy.liberty.edu/docview/1922852359?pq-
origsite=summon
Satterlee, B.C. (2018). Cross border commerce: third edition. Raleigh, NC: Synergistics
International Inc
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