Free Trade and Globalization

Question: Describe about the Article for Free Trade and Globalization. Answer: Introduction: Free trade is an economic term use to describe the import and export relations among various companies. Countries get engaged in the Free Trade relation when both companies and countries get the opportunities to import and export goods without any governmental intervention. It has been pointed out that Free Trade is a double edged sword. The business phenomenon is both advantageous and disadvantageous for a nation. Keeping this point in mind, a report is made to derive at a particular conclusion regarding the issue (news.vice.com, 2016). Discussion: In the era of globalization and open economy, opportunities for better business and a transparency in the business has increased. No wonder this has opened many scope for various countries and companies to spread their wings and increase their profit, there are many instances when this approach has proved to be a threat for the operating country. As per the view point of Irwin (2015), free trade has both pros and cons. Some of the advantages of free trade are: Lowers the cost of import and export: By the means of free trade, companies are able to lower their cost using the cheapest resources available. Free trade allows companies to import the raw materials from other countries that are not available in that particular country (Irwin 2015). Again, goods that are exported to the domestic region have little or no intervention. Competitive advantage: With the intervention of import and export of the goods among the countries, it is expected that there will be a certain level of competitive advantage between the various products available. Cons of free trade: Privatization of the companies: With the intervention of the companies in the other countries, many companies are gaining privatization in the country where they are operating (Korhonen 2013). It has been found that many state owned enterprises established their privatization and operate like a private business. These companies are achieving their goals without any concerns regarding the benefits of the country where they are operating. Non co operation of government of the countries: At many instances, it is found that the government of some developed countries does not allow other companies to operate in their countries. Due to this non-cooperative approach relationship between these nations are seemed to get hindered. Political slavery: In the greed of launching their product in a developed country, some companies even get ready to become a political slave of the country (Jaffee 2014). This results in huge corruption practices that decline the ethical standard of both the company and the country. Conclusion: There are both advantages and disadvantages of free trade. In the contemporary period, it can be said that although globalization has opened up great operational areas for the companies to operate in various countries, there are certain threats that both the domestic and the international countries have to suffer. As suggested from the articles strict guidelines and rules are to be set up in order to keep a grip of the incoming or outgoing of the trade that various companies are carrying in their business journey. Reference list: Irwin, D.A., 2015.Free trade under fire. Princeton University Press. Jaffee, D., 2014.Brewing justice: Fair trade coffee, sustainability, and survival. Univ of California Press. Korhonen, P., 2013.Japan and the Pacific free trade area. Routledge. news.vice.com, 2016 Available at: news.vice.com/article/wikileaks-says-secretive-trade-agreement-paves-way-to-corporatization-of-public-services [Accessed on: 29-5-2016]