To boost trade and promote growth, an increasing number of countries seek trade liberalization. Free Trade Agreements and regional economic integration lately became priorities on the national agenda in many countries. The Pacific region is not an exception. In “Australian Beef, Cheese Favored in Trade Deals with Japan, Korea”, an article published on Bloomberg.com, Australia sealed a deal with Japan and Korea to boost its export of beef, canned tomatoes and iron ores, in return for lower tariffs on Japanese and Korean car import. Australia described the trade pact as a “major windfall” for Australian beef, the country’s biggest agricultural export to Japan. Japanese and Korean automobile producers also welcomed the deal.
This trade pact is a part of the trade liberalization effort that makes a world flat. According to the readings, “The World Is Flat: A Brief History of the Twenty-First Century”, written by the author Peter Begley, the tearing down the walls of trade barriers allows the easy access to local markets of diverse countries. Friedman uniquely describes it by referring to the fall of the Berlin Wall as a global democratic shift towards free market economies. The Bloomberg article on Australia’s trade deals with Japan relates to this week’s reading by pointing out the beneficial side of boosting two-way trades. Australia, one of the world’s top ten beef producing countries, would benefit from “significant new duty-free access.” to Japanese market. In the same manner, Japan, world’s leading auto producing country, can tap an emerging market in the South Pacific. Consumers in both countries also can enjoy less pricey beef and cars.
Yet, there is also a wrong side of globalization. As the article “On the wrong side of gl...
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...-win solution so that everyone could equally benefit from the best offer, not just serving the wealthy at the expense of others. Unless it is founded on ethics in international trade practices, TPP cannot ensure sustainable growth over the long term.
The largest takeaway from the article is the enormous effect the free trade has on local economies involved. Looking at the negotiation process of TPP and its controversies helped me to understand amazing impacts that globalization plays in our daily lives. Thanks to free trade and globalization, I can afford clothes and consumer electronics at a cheaper price. However, for a free trade to succeed, it should create synergy in which every party involved could thrive by nurturing each other. This article convinced me that without mutually nurturing strategy, economic integration through free trade cannot be successful.
It has to do with eliminating barriers that are put in place to protect the producers in a country. The barriers that countries implement include tariffs and taxes, quotas, rules and regulations and government subsidies or tax breaks (pg 58). The primary goal of a trade agreement is to lower these barriers so that any international company involved in the agreement(s) can be competitive in another country that is also involved in the agreement(s). One of the key features of the TPP agreement is to eliminate tariffs and some of the other barriers in order to create new opportunities for workers and businesses and to also benefit
After Sir John McEwen, the former Minister for Trade, signed the Australia-Japan Commerce Agreement in 1957, the trading aspect between the two nations has developed ...
The signing of the US treaty by Townsend Harris in 1858 opened more of the Japanese ports to trade, and also fixed tariffs. “The West made the Japanese agree that Western countries would determine import tariffs. This place, Japan at a distinct economic disadvantage in its ability to be competitive domestic or internationally.” (Woods, SW. (2004).
The meeting of minds between Chile and the United States has brought about a long awaited union pertaining to free trade. Chile responded enthusiastically when presented with the opportunity to become a part of 1994's North American Free Trade Agreement (NAFTA) but because of the issue of presidential fast-track trade negotiation authority, the merger did not come to fruition. Now, nearly a decade later -- after negotiations began in the year 2000 -- Chile and America have come to their own agreement with regard to free trade, one that is both historic and comprehensive in nature.
The United States has for over two centuries been involved in the growing world economy. While the U.S. post revolutionary war sought to protect itself from outside influences has since the great depression and world war two looked to break trade restrictions. The United States role in the global economy has grown throughout the 20th century and as a result of several historical events has adopted positions of both benefactor and dependent. The United States trade policy has over time shifted from isolationist protectionism to a commitment to establishing world-wide free trade. Free trade enterprise has developed and grown through organizations such as the WTO and NAFTA. The U.S. in order to obtain its free trade desires has implemented a number of policies that can be examined for both their benefits and flaws. Several trade policies exist as options to the United States, among these fair trade and free trade policies dominate the world economic market. In order to achieve economic growth the United States has a duty to maintain a global trade policy that benefits both domestic workers and industry. While free trade gives opportunities to large industries and wealthy corporate investors the American worker suffers job instability and lower wages. However fair trade policies that protect America’s workers do not help foster wide economic growth. The United States must then engage in economic trade policies that both protect the United States founding principles and secure for tomorrow greater economic stability.
As Ian Fletcher pointed out in Free Trade Doesn’t Work: What Should Replace it And Why, nations need a well-chosen balance between openness and closure toward the larger world economy (Fletc...
One of the main factors that caused globalisation in Australia was a reduction in protection, the act of National trade barriers being removed. A reduction in protection of international trade is done by governments who work together to develop agreements with each other to reduce trade barriers and allow tariffs on imported goods to be reduced. Australian governments have been involved with countries such as Singapore and Malaysia in an effort to help reduce the tariffs and quotas on imported goods, resulting in free trade agreements between other countries. For example, when National trade barriers are removed, opportunities are opened up to Australian business to import goods at a cheaper price and then export other goods to new markets in other countries. Evidence of this was recently reported on the ABC news program, the reporter quoted that ‘our government should not sign any free trade agreements with Japan, until the tariffs on Australian beef and dairy products are reduced.’ This news report showed local Australian farmers who are trying to convince our Prime Minist...
While free trade has certainly changed with advances in technology and the ability to create external economies, the concept seems to be the most benign way for countries to trade with one another. Factoring in that imperfect competition and increasing returns challenge the concept of comparative advantage in modern international trade markets, the resulting introduction of government policies to regulate trade seems to result in increased tensions between countries as individual nations seek to gain advantages at the cost of others. While classical trade optimism may be somewhat naïve, the alternatives are risky and potentially harmful.
They explain that, with the reduced or zero tariffs imposed making foreign suppliers easily lowering their prices, local companies have to compete with the prices, which they should do even if it is difficult for them, or consumers will go for imported goods over their locally produced products- Opponents of free trade say that with the increasing competition this treaty offers, some businesses might close down or decide to do business elsewhere. When this happens, workers will be displaced. Regardless of the reduced prices, this will still have an effect on these workers because they will be unemployed or paid with lower wages. - the opponents of free trade will continue to espouse the old argument that "the jobs created by globalization are often less sustaining and secure than the livelihoods abolished by it [in poor countries]." (froning)
In order for international trade to work well, governments must allow the world market to determine how goods are sold, manufactured and traded for all to economically prosper. While all nations may have the capability to produce any goods or services needed by their population, it is not possible for all nations to have a comparative advantage for producing a good due to natural resources of the country or other available resources needed to produce a good or service. The example of trading among states comprising the United States is an example of how free trade works best without the interve...
Free trade in today’s economy allows so much more than just jobs and goods at lower prices for Americans. Compared to the foreign competition, the free trade benefits outweigh any risks the foreign competition might impose on the US. As said by Denise Froning in her article, free trade benefits in four ways. “Free trade promotes innovation and competition, Free trade generates economic growth, Free trade disseminates democratic values, and Free trade fosters economic freedom.” Societies that enact free trade policies create their own economic enthusiasm, nurturing freedom, job opportunities, and success that benefit every citizen. Free trade is the only type of fair trade because it offers consumers the most choices and best standards to improving their type of living. Also by fostering opportunitie...
Trade is more than the exchange of goods and services; it sows the seeds for growth, development and provides the knowledge and experience that makes development possible (Cho, 1995). Trade is considered one of the main driving forces behind economic growth and poverty reduction, especially in Africa (Fosu and Mold, 2008). Adam Smith’s 1776 theory of absolute advantage states that a trading nation can gain by specialising in the production of the commodity of its absolute advantage and exchanging part of this output with other trading partners for the commodities of its absolute disadvantage (Llorah, 2008). This process enables countries to extend beyond their borders, allowing greater specialisation in production, enhanced effectiveness in use of thin resources, the growth of national income, the capacity to accumulate independent wealth and enhances the growth of the economy (Cho, 1995). According to DFID’s report, Trade Matters, other positive derivatives include raised employment, increased household income and the chance for people to earn their way out of poverty, independent of aid (DFID, 2005). The role of trade, while strongly advocated, is still highly debated (Collins and Graham, 2004; Madeley, 2000) and many recent studies question the positive role of economic growth on open trade (Bene, 2009). The extensive arguments surrounding this controversial discussion empirically highlight the difficulty in isolating the effect of trade liberalisation on economic growth, although it is clear that it does, and will continue to have, an important role in poverty alleviation.
Globalisation has been one of the most significant developments of the last half century, and issues such as trade and international commerce have become increasingly important. In consequence, problems such as poverty, unfair wages and poor working conditions in third world countries have been drawn to the attention of consumers (Hayes and Moore, 2007). This is a growing global issue which cannot be ignored by anyone concerned about the problems in developing countries. Free trade and Fair Trade have both been offered as solutions to these issues.
Finally, everything in the world has a positive side and a negative side and globalization is one of them. It is up to us the people of the world to maximize the positive aspect of globalization and minimize its negative aspect.
Fletcher, I. (2011). Crumbling of Free Trade – And Why it’s a Good Thing. Retrieved from