However, production is cheaper if they are made countries where regulations are less strict (Wood 25; Stephanie para 1). Despite the profits made from this technique, it can have some repercussions on the U.S. economy and the environment of nations occupying those factories (Marquis 39; Ahmed 192; Zhang 776). This springs a debate to whether more concern should be held for the outcry of Americans to bring jobs back to the U.S. (Ahmed 192; Stephanie para1) or to the freedoms of the businesses and their right to seek a profit (Salanţă 270). Both sides can agree that outsourcing can be desirable for a business do to the potential profit. It allows goods to be made cheaper, management to run smoother, and money to be made faster (Salanţă 270).
Companies who provide cheaper made products, can cause a deficit for any country by flooding their economy with these exports. Fair trade prevent this and provides developing countries with the opportunity to provide merchandise that is not readily provided to the consumer. Fair trade helps provides jobs in developing countries and protect them from the abuses of monopolization. To solve this problem, there must be a fair exchange for goods and services. If these practices are allowed to continue, we as the consumer, will be paying higher prices at the stores.
Aid is an instant remedy. Not cure. Trade is better than aid because trade improves the efficiency of a country since there are some products which may be being found in the developed countries but not in the developing ones therefore I will go for trade and not aid. Definitely trade is better than aid as the aids given in form of funds are not utilized properly for development and large sum of money goes inside the pocket of ministers. But with the trade any developing country can be benifited in two ways one it will get money for growth and development and secondly it will abridge the gap between a... ... middle of paper ... ...e between them.
With knowing more about other countries, it will become easier to help each other in times of need. With every upside there is a downside to economic globalization. With all the positive sides of globalization, there are just as many downsides and bad things that come along with it. One of the biggest downsides to globalization is that it makes the rich, even more rich, and the poor even poorer. This is because of the fact the rich find ways to get what they want made to be produced at a cheaper price, thus increasing their profits on the product.
Trade allows people to specialize in their comparative advantage without causing any major amount of long-term unemployment, but the scale of international trade is significant as many workers most times have to accept jobs that offers a lesser amount in pay or fewer benefits than they had before, which means that nations do not have any guarantee that the jobs outsourced caused by international trade will be replaced with better jobs that require similar skills in a short period. Workers can acquire skills that will help them obtain better jobs than they used to have, but the process of these skills could take some weeks or a couple of years. Developed economies are typically richer than developing economies, and will buy assets from developing economies when they feel it’s economical to do so. Foreign direct and portfolio investments by a nation may feel like exploited as buying their natural resources and using the cheap labor available in the country. In the long-term a developing economy will become richer and get closer to purchasing-power parity with their trading partners, but it’s not a quick transition.
This will lead to an Win-Win situation for companies to trade in terms of export and import products. Firms in developing countries produce goods based on technology which was leveraged by developed country having greater global market share. This also leads developing countries using that technology but do not try to innovate the technology. Developing countries who identified and brought new technologies are now making more income for example India leveraged heavy machinery and Information technology, China got leveraged with electrical, office, telecommunication products and data-processing products. This is defined as product classification in paper "How Rich Countries Became Rich and Why Poor Countries Remain Poor: It’s the Economic Structure" by Jesus Felipe, Utsav Kumar and Arnelyn Abdon.
One of the main arguments against globalization is that large corporations take advantage of poorer nations. Opponents argue that corporations take advantage of the labor force by giving them unfair working conditions as well as having a disregard for the environment (“Economist” 2001). While this may have been the case in the past most multinational corporations are working to clean up their practices in developing countries. Regardless of the way that the standard of living is measured, there is clear evidence that economies that adopt free trade policies outperform their counterparts that maintain protective trade barriers. This economic performance has lead to clear increases in the standard of living in these countries, providing clear examples that free trade can be used to help underdeveloped economies catch up to more developed nations.
Free trade is an economic policy in which one country has open imports and exports with another country, or countries. Edward E. Leamer discusses in his book, Sources of international comparative advantage: theory and evidence, the purpose of free trade is that some countries are able to produce more efficiently than other countries, which could be because they offer lower labor and environmental-protection costs. This allows certain countries to focus on producing what they do best, and trading that product away to other countries in exchange for other necessary goods. This can either be extremely helpful to the economy, or devastating depending on how you look. As other countries have developed new manufacturing plants, they also include
Free trade benefits few but not the masses, is in favor of rich companies with large corporations, means a loss of power and political control on a national, regional and local levels of government, as well as allows for child labor and there for loses out economically. Many people here in the United States are not well informed about Free Trade or its drawbacks. By giving people the information and steering them toward a better form of trade such as Fair Trade we could possible help those other counties that are dealing with the effects of free trade. When dealing with free trade the commercial benefits are hard to miss, more choices on cars and products, lower coasts on goods so consumers can by more products and live the good life. (p.68) However, digging deep in to the effects of free trade shows us that that it benefits few but not the masses.
Consumer can benefit in cheaper goods, when presented with two products that offer similar benefits, customers vote with their purchases and decide which product will survive. Customers also determine the ultimate price point for a product, which requires producers to set product prices high enough to make a profit, but not so high that customers will hesitate to make a purchase. Except consumer can benefit in cheaper goods, corporate access to larger markets means that firms may experience higher demand for their products, as well as benefit from economies of scale, which leads to a reduction in average production costs. Providing an incentive for countries to specialize and benefit from the application of the principle of comparative advantage. Globalization enables worldwide access to sources of cheap raw materials, and this enables firms to be cost competitive in their own markets and in overseas markets.