International Trade Current Issues in Thesis

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The problem with this argument is that the world is not purely economical in its activities or its planning. The notion that state -- i.e. political -- entities have ceased to matter in global trade issues, though increasingly popular among certain scholars and pundits, is a perspective that is at best "profoundly misleading" (Krasner 1976, pp. 317). The fact is, states act according to perceived threats both to their security and to their sovereignty. These reactions are not always purely rational, at least not from an economic sense of the word, and therefore the pure rationality of economics cannot be used to predict state action -- which is still hugely important -- in the area of free trade (Krasner 1976). Despite the hegemonic decline of the United States that Milner notes, it is still a country with an enormous amount of international clout that can easily appear threatening in international bargaining.

Free Trade and the Poor

The primary breakdown in the global free trade talks exists because of the perceived disparity of globalization's effects on poor countries and those that are already sufficiently economically developed. As Frank ( points out, the misconception that underdeveloped countries are merely at an earlier stage of development and simply need to "catch up" to the developed world is demonstrably false; South America has shown cycles of regional development and underdevelopment that essentially amounts to a stagnation, and this process is observable in many other "developing" regions of the world. Dollar and Kray (2002) are quick to point out that the most rapid economic growth in recent decades has occurred in some of the world's poorest areas, but this sidesteps the real issue. Their growth might be outpacing the developed world's currently, but the sustainability of that growth and the distribution of its effects to the truly poor are matters of debate.

This outlines a key difference between a country and its people in economic terms.

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Free trade is likely to be beneficial to many poor countries, especially those that that have abundant natural and raw materials to offer for export, and those that have large populations of willing and capable workers. But it is often governments and the already well-off in these countries that reap the majority of globalization's benefits. This can often lead to reduced opportunities for these nation's poor, and thus create greater injustices and disparities in wealth. An economy growing on paper does little to help a farmer priced out of his crop.

There is even a lack of conclusive evidence that free trade and a global economy actually serves poorer countries well as entities in and of themselves. As Kapur points out, "global financial markets bring high risks and high rewards," and though poorer countries have more to gain they are less capable of handling risk (1998, pp. 120). The recent global financial crisis is indicative of the greater risks these countries bear, and the poorer citizens of the world are certain to be hit the hardest by slowdowns in production and consumption. Proponents of globalization argue that moving manufacturing to underdeveloped countries affords their workers opportunities for growth that were not present before, but the lack of regulation that these countries purposefully mandate in order to attract business allows for a complete lack of protection and exploitation of the workforce. Things might be good for these workers when the global economy is growing, then, but they will be the first and hardest hit by any problems or corrections the economy undergoes.

Conclusion

Globalization might be good during prosperity, but the negative effects of free trade are hugely magnified by economic downturns. If countries and workforces are regularly decimated by the global economy after losing the self-sufficiency of their pre-modern economies, it can hardly be suggested that globalization is a good thing overall. Only a system that leaves.....

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