Essay on Globalization: International Trade and Globalization

Submitted By Eugenia-Madrigal
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Globalization has affected the way of making business, trading, information systems, organizations and even tourism has changed impressively thanks to the open world in which we live now a days. Globalization has opened a lot of opportunities for a lot of people, but also has complicated some sectors in different countries.

For starters we should know that “international trade and cross-border investment flows are the main elements of this integration“.1 This is cause by the governments that are less concerned of protecting their own economies, and are in favor of reducing tariffs and non tariffs barriers. Plus this global trade has been encourage and support by the World Trade Organization, giving more security and opportunities to lots of countries to import and export.1

Also trading has grown extremely since globalization, because of the economics benefits that it brings. “An absolute trade advantage or a comparative advantage extends the range of possible mutually beneficial exchanges. In a globalized business environment, companies argue that the comparative advantages offered by international trade have become essential to remaining competitive.“ 2 These benefits exist because some countries can have lower production rates than other ones, or because some have better opportunity cost than other ones, giving the people lower prices and more products. 2

With more trading opportunities, companies also had the necessity to go width and large, therefore they had to open to the globalization movement. With this movement they will be able to increase their profits and revenues; they will have more chance of investments and brand position. 3 As existing global companies, also global organizations have been created to help resolve problems around the business, environmental and human rights matters, between others. These organizations are the WTO, UNESCO, and also the United Nation and the FMI are involved.

Tourism has also increased since globalization started. Today “tourism is one of the largest industries worldwide, accounting for 10 percent of the world GDP ($7-8 trillion) and 10 percent of the US GDP ($1.2 trillion dollars).4 The increasing effect on tourism is due to a reduction of boundaries and new attractive destinations. 5 But also what makes this commotion is “information and reservation systems; decreasing costs of air travel and the possibilities of having access to destination with relatively low price and income levels, as well as relatively low social standards; emerging new destinations.“ 6 Today each destination is competing with any city, town or village around the world, Las Vegas vs. Paris vs. Cancun vs. any part you want, because possibilities had opened since the world has become global.

Therefore tourist have more knowledge of what they want and what exists out there, in addition to de increase in wealth that globalization has encouraged.7 For example in Mexico tourism has been growing 3.9 % annually according to the INEGI 8, which was more before all the drug dealing situation in which it has been involved. So all the countries has been competing in the international tourism with natural resources, hotels, transportation, hospitality and each country’s competitive advantage. “Mexico for instance got 191.5 millions of visitors in 2011” 9 and the Tourism Secretary is willing to go up, all of these since globalization started.

As we already mentioned, communication and information system are the main impulse of globalization. The Internet specifically has had a great impact, “allowing everyone to express her or his views to anyone and to all the world without having to go through the tiresome, time-consuming or expensive filters of newspaper editors, publishers or other media.“ 10 Like the Japanese Times mentions they have been the key of development of the fast-growing economies, bringing them instant communication to be connected all over the world within minutes.
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