The Heavy Price of Globalization
We all know that "Made in the USA" is basically none existent, nowadays. Our clothes come from China and other parts of the Far East. Our primary goods, such as fruit, come from many parts of Latin America. And Japanese corporations make half of our cars. Our US firms are heavily involved in foreign commerce, both by lending money abroad and owning firms in foreign countries. In the early 1990's US profits from foreign investment was more than thirty (30) percent, while domestic profits fell. That was up from thirteen (13) percent in the 1960's. The US export of goods and services rose from five (5) percent to ten (10) percent, between 1965 and 1990. The contributing factor for all of this activity is what we call globalization. So why does this exist and who pays for this globalization? First lets explore why these practices exist. Why do we involve ourselves in trade? The primary reason why countries trade is the comparative advantage phenomenon. Comparative advantage is simply one country would produce a product in which it is most efficient in and trade with another country for the thing(s) that it gave up. With this everyone is supposingly happy, but is that the case?
Correcting the massive dysfunction that economic globalization has created will not be easy. The starting point must be a clear recognition that this dysfunction is inherent in a globalize economic system. We should also be clear that this system was put in place through intentional policy choices orchestrated by the powerful and well-organized economic interests that have benefited from it. As a solution, we can just as well put in place policies that result in a sharing of the benefits of technological change, and return both economic and political power to the local communities where people live and work. Although, in its 47 years, the basic legal text of the GATT remained much as it was in 1948, there were additions in the form of voluntary membership, agreements and continual efforts to reduce tariffs. Much of this was achieved through a series of "trade rounds." Trade rounds offer a package approach to trade negotiations, an approach with a number of advantages over issue-by-issue negotiations. First, the "round" allow participants to seek and secure advantages across a wide range of issues. Second, concessions which are necessary but would otherwise be difficult to defend in domestic political terms, can be made more easily in the context of a package which also contains politically and economically attractive benefits. Third, developing countries and other less powerful participants have a greater chance of influencing the multilateral system in the context of a round than if bilateral relationships between major trading nations are allowed to dominate. Finally, overall reform in political sensitive sectors of world trade can be more feasible in the context of a global package. The latest and most extensive "trade rounds", under the auspices of GATT was the Uruguay Round. It went into effect in 1996. The reason behind the GATT finally coming to an end was one, the deterioration in the trade policy environment, globalization of the world economy, international investment, and trade in services. Besides trade policy being affected by the high rise of globalization, the common consumer is the one
Some common words found in the essay are:
Uruguay Round, America Japanese, Nations Charter, GATT NAFTA, Trade GATT, World War, Monetary Fund, Organization WTO, Globalization USA, free trade, Organization ITO-, world trade, trade rounds, economic globalization, pool jobs, job security, trade policy, international trade, comparative advantage, united nations,
Approximate Word count = 1433
Approximate Pages = 6 (250 words per page double spaced)
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