International Trade Argumentative Essay Example

country will benefit from these subsidies; however, this choice may not always be beneficial for the recipient nation as it can cause investment competition with negative repercussions. This paper pertains exclusively to manufactured goods, and developing countries account for more than 80% of their exports and roughly one third of global trade.

In the early 1990s, clothing was a prominent export of manufacturers during the rise of the anti-globalization movement. A well-known example that sparked controversy was a clothing line made by underpaid workers in Honduras for an American supermarket. By the late 1990s, this movement gained significant media attention and became a topic of discussion at various meetings including the WTO talks in Seattle in November 1999 and other trade summits worldwide.

As the anti-globalization movement gains traction, activists view advocates of free trade as a threat to national sovereignty and autonomy. They are blamed for worsening the situation of workers in countries like Honduras where skilled laborers in the export manufacturing industry are in high demand, leading to widening income and employment disparities. This phenomenon affects both developed and developing economies.

Despite the expectation that trade liberalization would decrease income inequality, it has been noted that this is not always the case. In the 1980s, Mexico experienced an increase in the wage gap between skilled and unskilled workers, resulting in a wider income disparity. Furthermore, developed countries still prefer to manufacture their products in developing nations due to their considerably lower wage rates.

During the late 1990s, the average wage in the apparel industry varied greatly among different countries. The Dominican Republic had an average wage of 69 cents, while Mexico ranged from 50-54 cents and China

was only at 23 cents. Indonesia's average wage was a mere 10 cents, and Burma (Myanmar) lagged behind with a meager four cents. In contrast, the United States boasted a much higher average wage of $8.4 for its workers.

Although these nations may have been appealing to producers due to low or non-existent costs for environmental and occupational health protection, workplace safety regulations were lacking or not properly enforced because of limited resources in developing countries such as human capital, finances, and technical capabilities. Corruption also played a significant role in regulatory development that hindered workplace health and safety enforcement on all levels. These issues are preventing change due to a lack of political interest.

The concept of countries being in debt is widespread, and policies discouraging investment from developed nations are avoided. This passage explores Ricardo's theory, which was later refined by Heckscher-Ohlin. The theory examines comparative advantage using two factors of production: labor and capital. Some countries possess an excess of labor while others have a surplus of capital. Developing countries have a significant comparative advantage in the labor market due to their surplus labor and according to HO's model, they are regarded as periphery compared to core developed countries. It is natural for these labor-abundant countries to concentrate on manufacturing and producing goods that require extensive manual work, whereas capital-rich nations focus on producing items that demand substantial monetary investments. These observations lead us to the topic of Foreign Direct Investment (FDI), which has two classifications.

There are two types of foreign direct investment (FDI) - one that aims to generate benefits for the host country, such as factories; and another that concentrates on boosting

exports, especially in developing nations with abundant labor resources and comparative advantage.

Due to having the lowest wages in the world, developing countries are often the suitable choice for producing various products like the aforementioned clothing and other manufactured items. Multinational organizations providing foreign direct investment take advantage of these countries, earning higher profits despite the extremely low salaries paid in their factories. Globalization has made strategic trade policies more common, with lower trade/transport costs and fewer market barriers making trading cheaper. Unfortunately, the majority of these countries lack independent unions to enforce labor rights and freedoms. As a result, workers cannot fight for their health and safety in the workplace or have any impact on issues such as working hours, production goals, and sexual harassment on the job. Essentially, globalization stands in the way of developing countries improving working conditions because they cannot afford to do so with the high opportunity cost of lost investments and production.

According to "The Global Threats to Workers’ Health and Safety on the Job" by Garett D. Brown, the Chinese term for crisis is composed of two distinct elements, where one signifies "danger" and the other "opportunity," ultimately forming the meaning as a whole. Notably, six of the largest corporations worldwide generate higher revenues than any country excluding the USA and play a significant role in seeking out the most economical labor across the world.

The formidable power of large corporations is a major hindrance to enhancing labor conditions. Financially strapped workers worldwide often cannot refuse dangerous job situations, making them easy targets for companies with abundant resources. Various organizations and people in developed countries are presently striving to tackle this

issue.

The improvement of working conditions in factories worldwide has been successful due to campaigns against companies like Nike and Disney. However, there is a need for global solutions to address environmental damage caused by climate change, cross-boundary water and air pollution, and over-fishing. The globalization of production has worsened pollution and resource depletion since developing countries have less strict environmental regulations. The current economic growth is unsustainable, with powerful nations such as the United States, Europe, Japan, China, and India facing capacity constraints. To overcome these environmental challenges requires international cooperation.

The globalization of investment can lead developing nations to reduce environmental protections, attracting the storage of hazardous waste and misuse of banned pharmaceuticals and pesticides. This intensifies competition among developing countries to lower their standards further. The race to the bottom affects both developed and developing economies as corporations seek out locations with low wages, insecure labor conditions, weak environmental regulations, and poor health and safety standards worldwide.

In terms of environmentalism, it is crucial to recognize that Peru and Ethiopia, as developing nations, prioritize the preservation of their distinct ecosystems. They achieve economic growth by implementing ecotourism initiatives, educational opportunities for tourists, and utilizing low-impact methods to protect natural resources. It's important to note that enforcing more stringent environmental standards may negatively impact these countries' attractiveness to businesses because of increased production costs. Moreover, pollution levels are exacerbated by air travel and commuting as worldwide traffic continues to increase. Despite efforts made through agreements like the Kyoto Protocol by global regulators to address these concerns, negotiating and reaching a consensus can be challenging.

Despite the numerous environmental concerns, they are not exclusively caused by the

rising exports of developing countries and instead have global implications. The importance placed on environmental sustainability varies across societies in different stages of development, with those who have met basic needs prioritizing natural resource preservation over those focused on material possessions that can impede economic stability. However, developed countries still significantly contribute to environmental damage even if resolving developing nations' issues. Thus, it is crucial to restrict the environmental impact borne by developing countries for developed ones. Additionally, production agglomeration is a third major concern of the anti-globalization movement.

Due to globalization causing a continuous reduction in trade costs, the manufacturing sector is expected to relocate from developed nations to developing nations. The unequal clustering of economic activities can be attributed to rising economies of scale, as evidenced by the Model of Economic Geography and new theory. Despite lacking significant comparative advantages, imperfect market conditions permit agglomeration. Paul Krugman's research illustrates this concept and provides insight into why developed countries favor production in developing nations.

Natural comparative advantage can lead to spatial agglomeration, but there is another important factor to consider. A small initial asymmetry or difference between regions can be magnified by cumulative causation or other interactions, causing the gap between these regions to widen. This theory suggests that developing countries have historically been chosen to specialize in certain economic activities, which then spread to nearby regions. For example, Japan's manufacturing production has spread throughout East Asia as investors sought out low-wage opportunities. This idea seems unfair, as developing countries should not be limited to low-paid labor and environmental destruction. Multinational organizations need to allow for proper development in these countries to avoid stagnation and failure.

However, this situation also harms developed countries, leading to lower wages and potential loss of production.

The transfer of dirty production to countries with weak environmental policies despite the fact that environmental damage is a cross-border issue is illustrated by the instance of India, where ships from around the globe are dismantled. This ship-breaking industry not only results in occupational accidents but also contributes to water pollution in the Alang region of India. Nonetheless, the locals take pride in their new industry and fresh job opportunities.

In today's world, the notion of prioritizing profit over considering the high cost behind it is deemed inappropriate. Multinational organizations, however, view this idea favorably as they frequently possess monopolistic power and solely focus on maximizing profits. Unfortunately, this approach often proves disastrous for developing countries. The difficulty of fighting against global trade injustice reflects not only on the country but also on its citizens. Furthermore, it demonstrates that developing countries may not necessarily desire to pursue similar standards as those of developed countries due to various factors such as ineffective labour unions, low political power, debt, and other issues. Consequently, these developing nations continue to be exploited for nefarious purposes.

Despite the generally accepted idea that free trade is beneficial to society, in this essay I have examined numerous reasons why it should be abandoned. While there is considerable evidence supporting the notion that free trade is welfare-enhancing, a more recent analysis of the distribution of winners and losers reveals a darker side to the expanding practice of free trade. The subject is quite extensive and there is no definitive answer as different opinions and movements abound.