Globalization and Trade

6P_0A core element of globalization is the expansion of world trade through the elimination or reduction of trade barriers, such as import tariffs.  Greater imports offer consumers a wider variety of goods at lower prices, while providing strong incentives for domestic industries to remain competitive.  Exports, often a source of economic growth for developing nations, stimulate job creation as industries sell beyond their borders.  More generally, trade enhances national competitiveness by driving workers to focus on those vocations where they, and their country, have a competitive advantage.  Trade promotes economic resilience and flexibility, as higher imports help to offset adverse domestic supply shocks.  Greater openness can also stimulate foreign investment, which would be a source of employment for the local workforce and could bring along new technologies—thus promoting higher productivity (IMF StaffScheuerman).

Multinational companies based in the United States reap all the benefits of trade, as we receive the low-cost goods and we export our own products.  While free trade is not always beneficial to developing countries or even for competing powers, trade in the U.S. has impacted large companies beneficially, and even people like farmers (Rivoli) can participate and excel in this global endeavor.


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