For one the employment opportunities are methods through which the people in the host countries is seized, can create personal wealth. The improved roads, schools and hospitals are also one of the most direct benefits that the host country realises. Urban areas are able to grow, and this is an effect that improves the standard of living of the host country and the people in these countries. As Multi-National Companies enter different foreign markets, they are able to widen the international and domestic markets. This is a benefit that can be seen from the onset.
In a free trade system, both economies can technically experience accelerated growth rates. Free trade facilitates the concentration of goods and services by domestic workers, giving them a clear advantage. By broadening the economy’s diversity of products and proficiency, free trade also encourages specialization and the division of employment. Economists who advocate for free trade believe that it is the reason why certain civilizations even prospered economically in the first place. Adam Smith, for example, who is mentioned as being one of the fathers of free trade, pointed to expanded trading as being the
FDI contributes to the integration of the host country into the global economy, particularly through the financial flows received from abroad (OECD, 2002). This relationship is also demonstrated by Mencinger (2003), who provides evidence of a clear link between the increase of FDI and the rapid integration into global trade. This integration generates economic growth which is increased as the country becomes more open (Barry, 2000). The local firms’ integration in the global market is also made by copying and attaining of knowledge held by the multinationals. Multinationals have higher knowledge about internationalization because they have already gone through this process.
Globalization reduced trade barriers. This helped Economic Efficiency and Transboundary Trading grow and benefit our economy. The reduction of trade barriers allowed for countries to specialize in industries and grow the efficiency of their economies. If one
Similar to economic liberalization, protectionism has both its upsides and downsides, and impacts various parties differently. Our antithesis statement is that it is more beneficial for a country to keep its economy closed. Protectionism protects certain companies or industries that are important to the country. When tariffs are implemented by these countries, the overseas competitors will be discouraged to trade with the local companies. Hence, with less competition for the local companies, many would start buying products from their own country made by the local companies.
Lastly, companies can source cheaper and/or better raw materials from import making them more sustainable and profitable. More choices & competitive price: Monopolies or oligopolies are reduced in certain industries because international trade encourages greater competition which leads to more competitive prices. Consumers not only have the access to the new products or services that are not available in their country but also they get bigger bang for the buck ("The benefits of international Trade,” n.d.). Some negative aspects of international trade:
Similarly, improved efficient financial markets promote economic growth resulting in net welfare gains. Firms can easily fund their operations and expand or improve their production and technologies. The outcomes are an increase in productivity and wages as well as new jobs leading to welfare gains in the respective
Free Trade is a scheme followed by some international markets in which the countries’ governments allow imports from, or exports to other countries without any restrictions. Countries that engage in Free Trade usually lower trade barriers such as tariffs and import quotas. Many economists recommend Free Trade as the best way to maximize the potential of the global economy because it generates economic growths, fosters economic freedom, enables foreign direct investment and so on. However, some economists argue against Free Trade after highlighting its disadvantages. The following are the disadvantages of engaging in Free Trade; 1.
Free trade helps communication and bolsters the exchange between different corporations leading to more co-operation and innovation which has resulted in much more innovative products which are helping to combat climate change. Researchers widely agree that trade is responsible for more than 75% of technology transfers. It is similar to the approach of multi-national corporations (MNC 's), where technological expertise is exported to the host country to increase production and efficiency. The co-operation between corporations tend to emphasize on more environmentally friendly production methods leading to better and more eco-friendly goods to be produced. Another possible way of looking at it is the increased transfer of modern (and thus cleaner)
Globalisationhas also reduced trade batrriers and has allowed free flow of gOods, services and labour from one place to another which has allowed countries to specialize in production of goods whichas a result has increased the productivity of firms in countries and minimised thier costs as well.Globaliosation also allows countriesto obtain goods at cheaper prices which could prove to expensive to produce in thier own country.This process also enhances competition between countries through easierflow of goods and services between countires whichis an effective way of enhancing innovation to produce better quality goods. the rise in globalisation has increased capital flow into developing countries. Foriegn direct investment into developing countries stabalises the countrie 's ecomomic situation. However thier will be net capital outflow that couldlead to negative effects on trade. Large capital inflows into countries could be caused by appreciation in exchange erates and inflATIONARY PRESSURE that impacton country 's current acount.