How do you think globalization has affected trade?

What is the role of regional trade

versus global trade in developing and developed countries? In answering this question, be

sure to think about your understanding of globalization, the role of trade in varying

environments, and the costs and benefits of trade for particular countries. (Think about

our reading on regional food trade to answer this question.)

Globalization has resulted in greater interconnectedness among markets around the world.

During this period, countries have been able to enjoy better communication and awareness of

business opportunities across the globe. Investors have therefore been able to access various new

opportunities in the market and study those markets. With these opportunities, it is easier to

identify potential risks and profit opportunities which will help the growth of trade between these

countries. It is therefore important to identify the various effects of global trade in local

economies in order to understand the effect of globalization on trade.

The integration of national economies into the global economic system has been one of the most

important developments of the 20th century. During these period, globalization has materialized

into a remarkable growth between countries. Products and services previously available within

one country have become available to new markets outside those countries due to globalization.

Further, countries that have been able to maintain positive relations between each other have

been able to unify their economies through increased investment and trade.

During the period of globalization, countries and companies have been able to increase their

competitiveness in the industry. Companies have been able to broaden their target area therefore

expanding their local areas and home countries to the rest of the world. With this growth,

companies start fighting stiff competition from outside their home countries. They therefore have

to source raw materials and outsource labor from other countries. It is therefore clear that
globalization opens up trade opportunities especially in labor and raw materials. The sourcing

and outsourcing of labor and raw materials has made many companies into global ones helping

them seek production locations and partners for new ventures. Globalization has therefore made

it easier for companies to transition into global markets.

In the beginning, globalization focused on trade in goods. As times went by, the trade of services

has increased over time. This has led to a focus in telecommunications, financial service,

computer and information systems and has therefore created various industries in various

markets and frequently better jobs of a nature as compared to around the past. It is evident over

the last few years, globalization has opened up various opportunities for people in the global

trade market. With the expansion of the extent of global trade individuals have been able to

access better jobs and services that have grown both local and international economies.

Over these period, capital economies have also been truly globalized. Foreign investment has led

to the creation of jobs and the improvement of living standards mostly in developing countries.

Companies have been able to position themselves in competitive positions through geographical

diversification. This has made it possible for companies, individuals and various investment

trusts to invest in their local markets hence influencing trade on a larger scale.

Globalization has influenced regional trade with countries making regional trade blocks to ensure

better trade regulations and tariffs for their countries. Due to this tariffs and regulations,

countries are able to enjoy better rates that help them be more competitive in the international

market and ensure that they perform better in regional market. This protections ensure better

profits between common trading partners and better access to various markets. Globalization

ensures better market negotiations and prudent market practices.