Information Technology Reference
In-Depth Information
The World Trade Organization (WTO) is an international body that devises rules
for international trade and promotes the goal of free trade among nations. The WTO
and other proponents of globalization support free trade with these arguments:
1.
Free trade can increase everyone's standard of living.
Every country has a
comparative
advantage
at producing certain products and services, meaning it can produce
them at a lower opportunity cost than any other country. Consumers get better
prices when each area produces the goods or services it does best—corn in Kansas,
automobiles in Ontario, semiconductors in Singapore, and so on—and then these
products and services are bought and sold without trade barriers. When prices
are lower, the real purchasing power of consumers is higher. Hence globalization
increases everyone's standard of living.
2.
People in poorer countries deserve jobs, too.
When they gain employment, their pros-
perity increases.
3.
Every example in the past century of a poor country becoming more prosperous has
been the result of that country producing goods for the world market rather than trying
for self-sufficiency
[46]. Contrast the remarkable success story that is South Korea
with the economic basket case that is North Korea.
4.
Creating jobs around the world reduces unrest and leads to more stability.
Countries
with interdependent economies are less likely to go to war with each other.
Ralph Nader, American trade unions, the European farm lobby, and organizations such
as Friends of the Earth, Greenpeace, and Oxfam oppose globalization. They give these
reasons why globalization is a bad trend:
1.
The United States and other governments should not be subordinate to the WTO.
The
WTO makes the rules for globalization, but nobody elected it. It makes its decisions
behind closed doors. Every member country, from the United States to the tiniest
dictatorship, has one vote in the WTO.
2.
American workers should not be forced to compete with foreign workers who do not
receive decent pay and working conditions.
The WTO does not require member coun-
tries to protect the rights of their workers. It has not banned child labor. Authori-
tarian regimes such as the People's Republic of China are allowed to participate in
the WTO even though they do not let their workers organize into labor unions.
3.
Globalization has accelerated the loss of both manufacturing jobs and white-collar jobs
overseas.
4.
The removal of trade barriers hurts workers in foreign countries, too.
For exam-
ple, NAFTA removed tariffs between Canada, Mexico, and the United States. Be-
cause they receive agricultural subsidies from the US government, large American
agribusinesses grow corn and wheat for less than its true cost of production and
sell the grain in Mexico. Mexican farmers who cannot compete with these prices
are driven out of business. Most of them cannot find jobs in Mexico and end up
immigrating to the United States [47].
