International Trade and Globalization
International trade refers to the trade that is conducted between countries or beyond any such country’s jurisdiction. On the other hand, globalization refers to increased consciousness in the world that has been due to increased interdependence between countries. These interdependencies coupled with increased inter-country investments have facilitated culture exchange between countries which have ultimately lead to shrinking in the societies across the world. No any country can produce all that it needs to consume. Simply put just like no man is an island so is any country! Globalization has accelerated majorly due to two factors: Liberalization and Technological advancements.
Liberalization is the uplifting of the trade-barriers that would otherwise protect a country’s economy against foreign importation and exportation. Most countries in the world have done away with these trade-barriers hence leading to increased international trade as more and more countries are now in a position to import and export freely. This has strengthened international trade among the various countries involved and as people interact in a single global marketplace, ideas and cultures are exchanged. Growth in economy due to liberalization has been more pronounced in East Asian countries such as Singapore and China and also in some Latin America countries though this cannot really be said of most Sub-Saharan Africa developing countries. Uplifting of these protection tariffs has been facilitated by global institutions such as WHO and IMF that were formulated in 1940s after World War II.
The major influence of technological advancement has been on transportation and communication facilities which have consequently lead to increased international trade. One important economic factor in production is cost as it directly dictates the price of the final product. Advancements in technology has reduced the cost of communication and transportation to a level whereby firms can feasibly locate their production units or part of their production phases in other countries. Aviation technology advancement for instance has played a major part in increased international trade as goods can be transported across long distances around the globe within a short time.
Flanagan, R. J. (2003). International labor standards: Globalization, trade, and public policy. . Stanford University Press.