Home Free Lab ReportsGlobalization can be defined as the process of social

Globalization can be defined as the process of social

Globalization can be defined as the process of social, political, economic, cultural, and technological integration among countries around the world. Globalization presents challenges and opportunities in different world regions for the global economy but one of the prime benefits is in global trade. Many possess conflicting beliefs that some benefit from globalization more than others due to the investment from those countries that are more developed. Those opposing globalization argue that self-interested, multinational companies exploit the resources of developing countries and impair development, but multinational companies tend to offer higher wages than domestic companies (Akinon & Sadayuki, 2011).
Through global trade agreements, communications, jobs, technology and wealth all increase. Global trade limits are set primarily through trade agreements. For the purposes of this paper, we will focus on North America/South America (the Americas), Europe/The European Union (EU) and Asian countries in the Pacific Rim. The North American Free Trade Agreement (NAFTA) and the Central American Free Trade Agreement (CAFTA) both affect the Americas.
The Comprehensive Economic and Trade Agreement (CETA) affect the EU and Canada. Next, the Asia-Pacific Trade Agreement (APTA) established for the first time, trade agreements in the Asia Pacific. Trade agreements expand markets to buy and sell and import and export (Lynch, 2018). This reduces trade barriers and allows market expansion for wealth, jobs, communications for those that otherwise may not receive that opportunity. It is critical to take into account that China is working at an East Asia Free Trade Area (EAFTA), while Japan has counter-proposed with a Comprehensive Economic Partnership in East Asia (CEPEA) (Hamanaka, 2012).
NAFTA is designed to remove trade barriers between the US, Canada, and Mexico. CAFTA represents an expansion of NAFTA linking countries of the Western Hemisphere, including five Central American nations (Guatemala, El Salvador, Honduras, Costa Rica, and Nicaragua), and the Dominican Republic. CETA cuts tariffs and makes easier to export goods and services and is designed to remove trade barriers between Canada and the European Union (EU) (Sardinha, 2017). The primary goal of APTA is to attract FDI to countries of Brunei, Indonesia, Malaysia, Philippines, Singapore, Thailand, Myanmar, Cambodia, Laos, Vietnam. AFTA does possess some challenges. For example, tariffs and/or quotas are in place for all members except for Singapore, which has eliminated tariffs completely (Okabe & Urata, 2014).
Globalization opens barriers to international trade and helps countries develop at a more rapid paste through international trade (Gurgu & Cociuban, 2016). Trade costs come in two key categories, costs imposed by policy (tariffs, quotas) and costs imposed by the environment (transportation, insurance against various hazards, time) (Anderson & Wincoop, 2004). North America is currently the largest trading blocs in the world with the United States leading international trade and investment. Canada remains the most active trading partner of the United States. From 1970 to 2000, in Canada, relative trade cost measure declined 30% while US trade costs with major trading partners declined on average by about 40% (Novy, 2013).
Mexico and Canada are experiencing the most significant reductions (Novy, 2013). Europe/The European Union (EU) countries have been most successful in integrating their economies but are remote and expect to infer more trade costs (Novy, 2013). In Asian countries the benefits of globalization to the ASEAN bloc are also key to growth, advancing trade in the region. By removing trade barriers and expanding its markets to foreign companies, the entry of the WTO has affected every facet of China (Ching, HSIAO, et al.). The cost in Asian countries shows that, as demographics change, growth rate increase. This causes the distribution of economic power to continue to shift. China is growing rapidly and is expected to represent the most massive economic power by the mid-century.
Globalization is key to the creation of expanded markets and has helped to increase wealth in many underdeveloped parts of the world. Technological advances have made it easier and quicker to complete international and financial transactions (Siwar, 2000). Foreign Direct Investment helps MNCs to enter global markets quicker and lowers of barriers to trade investment. The decline of distance and culture barriers have presented enormous opportunities for organizations to expand the market for their goods and services through exports and investments in foreign countries.