INTERNATIONAL BUSINESS AND WTO

ASSIGNMENT 3
DUE DATE: 29TH MARCH 2021

SUBMITTED BY: AQSA

REGISTRATION NUMBER: 5207/FMS/BBA/S18
INTERNATIONAL ISLAMIC UNIVERSITY ISLAMABAD | BBA 38
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Globalization generates wealth but it also takes away. How??

Globalization can be defined as the process in which businesses, organizations, and countries begin operating on
an international scale. Globalization aims to benefit individual economies around the world by making markets
more efficient, increasing competition, limiting military conflicts, and spreading wealth more equally.

Globalization Benefits World Economies

The Milken Institute's "Globalization of the World Economy" report of 2003 highlighted many of the benefits
associated with globalization while outlining some of the associated risks that governments and investors should
consider, and the principles of this report remain relevant.

Some of the benefits of globalization include:

Globalization provides businesses with a competitive advantage by allowing them to source raw materials where
they are inexpensive. Globalization also gives organizations the opportunity to take advantage of lower labor
costs in developing countries, while leveraging the technical expertise and experience of more developed
economies. With globalization, different parts of a product may be made in different regions of the world.
Globalization has long been used by the automotive industry, for instance, where different parts of a car may be
manufactured in different countries. Businesses in several different countries may be involved in producing even
seemingly simple products such as cotton T-shirts. Globalization affects services too. Many businesses located in
the United States have outsourced their call centers or information technology services to companies in India. As
part of the North American Free Trade Agreement (NAFTA), U.S. automobile companies relocated their
operations to Mexico, where labor costs are lower. The result is more jobs in countries where jobs are needed,
which can have a positive effect on the national economy and result in a higher standard of living. China is a
prime example of a country that has benefited immensely from globalization. Another example is Vietnam, where
globalization has contributed to an increase in the prices for rice, lifting many poor rice farmers out of poverty.
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As the standard of living increased, more children of poor families left work and attended school.
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Consumers benefit too. In general, globalization decreases the cost of manufacturing. This means that companies
can offer goods at a lower price to consumers. The average cost of goods is a key aspect that contributes to
increases in the standard of living. Consumers also have access to a wider variety of goods. In some cases, this
may contribute to improved health by enabling a more varied and healthier diet; in others, it is blamed for
increases in unhealthy food consumption and diabetes.

Foreign Direct Investment:

Foreign direct investment (FDI) tends to increase at a much greater rate than the growth in world trade, helping
boost technology transfer, industrial restructuring, and the growth of global companies.

Technological Innovation:

Increased competition from globalization helps stimulate new technology development, particularly with the
growth in FDI, which helps improve economic output by making processes more efficient.

Economies of Scale:

Globalization enables large companies to realize economies of scale that reduce costs and prices, which in turn
supports further economic growth. However, this can hurt many small businesses attempting to compete
domestically.

Globalization has led to increases in standards of living around the world, but not all of its effects are positive
for everyone. People living in communities that had been dependent on jobs outsourced elsewhere often suffer.
Effectively, this means that workers in the developed world must compete with lower-cost markets for jobs;
unions and workers may be unable to defend against the threat of corporations that offer the alternative between
lower pay and losing jobs to a supplier in a less-expensive labor market. The situation is more complex in the
developing world, where economies are undergoing rapid change. Indeed, the working conditions of people at
some points in the supply chain are deplorable. The garment industry in Bangladesh, for instance, employs an
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estimated four million people, but the average worker earns less in a month than a U.S. worker earns in a day.
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Globalization may contribute to income disparity and inequality between the more-educated and less-educated
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members of a society. This means that unskilled workers may be affected by declining wages, which are under
constant pressure from globalization. It also results in to following

Job displacement:

Globalization redistributes jobs by moving production from high-cost countries to lower-cost ones. This means
that high-cost countries often lose jobs due to globalization, as production goes overseas.

Exploits cheaper labor markets:

Globalization allows businesses to increase jobs and economic opportunities in developing countries, where the
cost of labor is often cheaper. However, overall economic growth in these countries may be slow or stagnant.

Increases potential global recessions:

When many nations’ economic systems become interdependent, the likelihood of a global recession increases
dramatically—because if one country’s economy starts to struggle, this can set off a chain reaction that can affect
many other countries simultaneously, causing a worldwide financial crisis.

Studies also suggest that globalization may contribute to income disparity and inequality between the more-
educated and less-educated members of a society. This means that unskilled workers may be affected by declining
wages, which are under constant pressure from globalization.

Interdependence:

Interdependence between nations can cause regional or global instabilities if local economic fluctuations end up
impacting a large number of countries relying on them.
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National Sovereignty:
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Some see the rise of nation-states, multinational or global firms, and other international organizations as a threat
to sovereignty. Ultimately, this could cause some leaders to become nationalistic.

Equity Distribution:

The benefits of globalization can be unfairly skewed towards rich nations or individuals, creating greater
economic inequalities. Economists suggest that nowadays, cross-border investments are not being made so much
to build capital infrastructure as they are to seek countries with the lowest taxes. Some form of globalization may
be inevitable over the long-run, but the historic bumps spurred by economic crises and other consequences suggest
that change is the only reliable constant.

In short, globalization takes jobs from one country and provides them to another. This can be negative or positive
depending on what part of the world we are in.

What is the symposium of WTO?

A symposium is generally defined as a meeting organized so that experts in a given field can meet, present papers,
and discuss issues and trends or make recommendations for a certain course of action.

The World Trade Organization was the venue of a symposium on critical issues confronting the world trading system
on 6 and 7 July 2001.Representatives from governments, non-governmental organizations, the media and members of
the academic community were invited to participate.

The first Symposium was held at WTO on 26 April 2018 and examined the nexus between natural disasters and
the multilateral trading system. It highlighted the impact of recent natural disasters on several Members' trade and
development. On 14 December 2018, a second Symposium surveyed hazards, risks and losses from natural
disasters and provided an economic and trade case for investing in resilience. Also outlined was a preliminary
scoping of issues arising from the WTO research.
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AIM OF SYMPOSIUM

The aim of the two-day symposium on the state of the world trading system was to provide as much time as
possible for both general and specific, issues-based discussion. An opening plenary on the morning of the first
day of the symposium was followed by five separate work sessions, each with a moderator and several
discussants. Specific subjects under each general heading were addressed by the discussants and ample time was
allotted during each session for comments, questions and debate. The work sessions started in the afternoon of
the first day of the symposium and continued the next morning.

The closing plenary session was held on the afternoon of 7 July. At that time, the chairpersons of the five work
sessions made oral summaries in a personal capacity of key points raised during their respective sessions. Reports
providing a short and factual summary of all interventions made during each work session will be issued a few
days after the symposium.

Special work sessions during the two-day symposium focused on trade in agriculture, food safety and sanitary
and phyto-sanitary standards, intellectual property rights (the TRIPS Agreement), development and environment
issues and trade in services (the GATS). A fifth working session addressed the relationship between the WTO
and civil society.

overview:

Many Governments across the world are facing an increasing burden of economic losses and dislocation caused
by natural disasters. Within an interlinked global economy, local events quickly become regional and global
shocks. Ensuring that economic systems are robust enough to withstand hazards and risks, both predictable and
unforeseen, will help better deliver the 2030 Agenda and support implementation the Sendai Framework for
Disaster Risk Reduction.

The aim of the Third Symposium on Natural Disasters and Trade is twofold:

• First, to elaborate the link between trade and disaster resilience. After welcome remarks by WTO Deputy
Director General Agah, a key note address will be given on this topic by the Director, United Nations Office for
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Disaster Risk Reduction. Ms. Madi's address will cover ongoing discussions and policy action at the global,
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regional and national levels in other fora to strengthen the resilience of countries and communities against
disasters and options for the trade community to engage therein.

• Second, to present the findings of disaster-affected country research for Members' consideration and discussion.
Country research has been undertaken looking at the macro-economic impact on disaster-affected countries, and
trade issues arising in disaster response, recovery and resilience. Research has focused on Nepal, in the Caribbean
on Dominica and Saint Lucia and Fiji, Tonga and Vanuatu in the Pacific.
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