This goal of growth in economy can be achieved through international trade, which involves many countries. Despite the obvious gap between developed and developing countries, economic globalization can manage to bring out positive results for both countries. Benefits arising from economic globalization can be shared among different organizations in various nations. When countries get involved in global trade, companies in those respective countries also benefit from such a move. Nations as well as business organizations are able to explore new markets and therefore increase their output leading to economic growth.
Two main areas have impacted employment in developing countries, namely trade liberalisations and FDI. Both have contributed towards a changing working environment, especially in the current era were economies are integrating and borders are opening up.
Globalization can be defined as the system of interaction among the countries of the world in order to develop the global economy. It also refers to the integration of economics and societies all over the world (http://hotbabefatchicks.hubpages.com/hub/Definition-of-Globalization). Globalization can be both advantageous and detrimental to developing countries. Some of its advantages are increased external finance, improved technology and political conformism. Disadvantages of globalization include death of small and medium businesses, loss of cultural identity and the effect of foreign policies on domestic economic development.
The advantages of free trade can be seen through domestic markets and the growth of the world economy. T... ... middle of paper ... ...ystem primarily responsible for promoting global competition. Free trade also promotes shifts in production so as to fit the “comparative advantage” model. Though free trade is widely practiced concerns with how to regulate free trade, something supposedly unregulated, countries have to subject themselves to the controversial institutions of the IMF and WTO. Fair trade policies while potentially creating smaller markets support workers’ rights in both the U.S. and developing nations.
Changing of trends and lifestyle of people will also affect the demand of the products. Technological development has led to an increase of technological advancements in textile industry. Textile industry is facing competition from foreign industry including our neighboring countries like Sri Lanka, Pakistan and Bangladesh where they took advantage of unilateral tariff preference schemes. Research and studies are conducted by the government to improve textile export and competitiveness of the Indian textile industry. It was also estimated the domestic household market size of textiles.
Effect of Trade and Investment Liberalisation on Individual Economies The liberalisation of trade and investment has increased greatly alongside the upsurge in globalisation due to financial and trade deregulation inturn bringing unprecedented benefits to individual economies. The removal of trade barriers such as tariffs, quotas and subsidies has caused a 16-fold increase in world trade since 1950. Consequently this has allowed for greater efficiency through specialisation, the expansion of markets for local producers, diffusion of technology and new ideas, greater consumer sovereignty and finally economic growth. Financial liberalisation on the other hand exists through foreign directory investment or portfolio flows which allows for higher labour productivity and income levels, an increase in the standard of living, technology transfer and the creating of new jobs and markets stimulating the exporting of capital and intermediate goods bringing benefits to both developing and developed countries. Critics of globalisation have placed much blame for the growing environmental and job insecurity around the globe to the globalisation phenomenon, however studies prove that market liberalisation promote labour and environmental standards.
At the national level, globalization plays a very important role for both the developing and the developed nations. The developing nations can imbibe new technology in the production of goods from the developed countries. The developed countries can make use of cheap labor and also available resources in the developing countries. The developed countries can establish multinational corporations in other countries which gives employment opportunities to the members of those countries. This paper aims to study the meaning of globalization and much importance is given to it in the recent times.
The Political Economy in International trade focuses on understanding the many causes of economic growth in developing and transition economies, the different role of international trade in increasing economic welfare around the globe, and the many different impacts of the international financial system on the global economy. As we take a look at the United States and Poland different economic systems and understand how these two countries are effected by the political economy in international trade, we will become familiar with how both are able to become skilled at improving their economic conditions in the globalized world economy. One of the most important objectives for both economies is to increase economic development and also to enhance the international economies of both countries in international trade system. As we look closely at the fundamental aspects of the international trade key point (Increasing market size, having an insurance motive, protectionism, and increasing bargaining power) we will begin to understand what makes and breaks countries in the political economic in international trading between large and small nations. To begin with, Poland trade policy opening up in the early 1990s was the most important step for Poland economy transformation.
Globalisation vs Regionalism By-Devika Rajeev Introduction The advent of international trade has helped economies all over the world. Be it a developed country which is looking for the best option in terms of skilled and unskilled labour, natural resources etc, or a developing country looking to increase employment opportunities, investments etc. Not only has this helped economies, but has helped to share popular culture around the globe. This started with the process of globalisation but recently there is increasing trend of regionalism in place. Even though technically both lead countries to open up it’s economies for trade there are some important differences between the two which will be identified here.
Standards of living rise because the depreciation and other cash flows of industries employing older, increasingly obsolescent, technologies are marshaled, along with new savings, to finance the production of capital assets that almost always embody cutting-edge technologies. This is the process by which wealth is created incremental step by incremental step. It presupposes a continuous churning of an economy in which the new displaces the old. The process is particularly evident among those nations that have opened their borders to increased competition. Through its effect on economic growth, globalization has been a powerful force acting to raise standards of living.