Prompt 4 (Global Issues 2014)


What are the virtues and drawbacks of trade liberalization?

Scholars and political commentators are divided about the effects of trade liberalization—that is, the globalization of free market principles, or the elimination of barriers to free trade.  Some have charged, e.g., that trade liberalization causes a race to the bottom. Whereby, in adopting free market principles, developing countries open their borders to foreign investors and multinational corporations to establish manufacturing facilities within their countries; but in doing so, developing countries must compete with each other to attract this investment and business, which gives them strong incentives to keep their environmental, labor, and human rights standards weak, and to refrain from effectively enforcing these standards.  This is because the absence of strong regulations makes it cheaper for foreign companies to produce goods in these developing countries.

Such considerations should lead us to ask: are the benefits of trade liberalization (or economic globalization more generally) outweighed by its costs?  In answering this question, choose one historical or contemporary example in which a developing country seems to have been harmed by liberalizing its trade policies, and argue what you believe the actual causes of these negative effects are.  Is trade liberalization to blame?  Why or why not?  Have other potential causes been overlooked—such as war, environmental catastrophes, corrupt politicians, etc.?


12 Comments

Filed under 110_2014: Global Issues

12 responses to “Prompt 4 (Global Issues 2014)

  1. Melissa S.

    Trade Liberalization: Endeavoring to be Beneficial

    Trade liberalization has allowed trade between countries to be much more accessible and has in turn created a more globally connected world. The benefits of trade liberalization can be easily seen through our ability to get products from almost anywhere in the world. The trade laws and taxes are much more lax than they have been historically and as a result, we especially, in the United States, have become very international friendly. However, with increasing trade liberalization the costs may in some cases outweigh the benefits. Trade liberalization has negative effects as well. Many countries, especially the poorer countries have not benefited from trade liberalization and have in fact suffered economic loss instead of growth. The report for 1999 of the UN Conference on Trade and Development shows that rapid liberalization of trade has in fact contributed to a trade deficit in developing countries. In addition an increase in imports but declining rate of exports can be seen as well as a decline in the value of export commodities.

    Countries specifically in Africa struggle with balancing exports and imports with new trade policies. Often times developing nations are purposefully holding back their economies in hopes that a “economic giant” will come to their aid by planting factories and business that will boost the country’s economic growth. However, this more often than not has negative effects as the countries’ economies become poorer and even less stable. The UN Food and Agriculture Organization believes that eliminating world hunger should be the world’s top priority and that increased trade liberalization is not going to be enough to help developing countries out of poverty. Many believe that globalization can have a positive impact on these developing countries by stimulating growth through improved technology and education however over stimulation of trade liberalization and information is often too much for a countries system to handle. It must be slowly introduced and trade liberalization must be phased in carefully. When trade liberalization is too quickly introduced or too much of it is allowed before the economy is ready it can overload the system and the countries imports quickly outgrow the exports leading the country into a pathway of debt and an unbalanced market.

    Trade liberalization is good and can be very beneficial when used correctly and used to benefit both or all parties involved. When used to benefit the more powerful, it often can be devastating to the lesser of the two parties involved. In my opinion, as seen in many African countries, throughout history and currently, trade liberalization must be handled in a way as to help the country grow and stand on its own two feet. Not simply as a crutch or a band aid to cover up the problem.

    Diouf, Jacques. “Global Trade Alone Will Not End World Hunger.” New York Times 18 Feb. 2000, sec. Opinion: n. pag. Print. Retrieved from: http://www.nytimes.com/2000/02/18/opinion/18iht-eddiouf.t.html?module=Search&mabReward=relbias%3Ar.

    Khor, Martin. “Liberalize Trade?Yes and No.” New York Times 31 Jan. 2000, sec. Opinion: n. pag. Print. Retrieved from: http://www.nytimes.com/2000/01/31/opinion/31iht-edkhor.2.t.html?module=Search&mabReward=relbias%3Ar.

    • Sam D.

      Trade Liberalization: Paved with Good Intentions

      Response to Melissa

      I have to agree with your assessment of trade liberalization. While it can be beneficial, often times the costs do outweigh the gains. While we in America can see the obvious benefits of liberalization, and therefore should be able to encourage it, looking at a poorer country or those less fortunate often shows us the truth of things. Not only does trade liberalization itself hurt, the idea of wanting trade liberalization can hurt a country as well.

      While you looked at Africa for such examples, I was able to find many of them in Asia too, during the economic crisis that occurred in 1997. There was a massive influx of money into the developing Asian countries (such as Malaysia, Thailand, and Indonesia) from foreign investors. This meant businesses started borrowing a lot of money from these investors, and no one really watched where it went, while they could never hope to pay it all back. Once investors started really looking into these economics, however, they found out about all the bad practices and began to sell off the local currency as fast as they could, tanking the economy. This led to the IMF interfering, which caused a massive economic collapse. These countries were introduced to and tried to capitalize on global trade liberalization far too quickly, leading to an absolute destruction of their economy, of which only a few Asian countries came out of the crisis no worse for wear.

      Looking at the African stage, we can see how trade liberalization hurts just by the idea of having it (or not having it). For instance, Kenya. During a small crisis regarding prices of food and necessities raising, the government passed a bill that allowed the Prime Minister control of maximum prices for goods. However, economists feared that this would simply drive businesses away, as one business chairman in Kenya stated, “If a manufacturer finds the cost of inputs too high, he will simply close shop until they come down or sell his products to countries which have no price controls.” This causes an idea of ‘trade liberalization or no trade at all’, which can only lead to more hardship, especially for those who aren’t well off already.

      Dr. Adam Fong, University of Northern Colorado. Asian Civilizations 1500-Present. The 1997 Financial Crisis.

      “Kenya Warning after MPs Pass Price-fixing Bill.” BBC News. BBC, 24 June 2010. Web. 26 July 2014.

  2. Amanda O.

    Trading Waste

    Trade liberalization (or economic globalization) can produce outcomes such as economic growth and poverty reduction to developing countries yet, we must look at what consequences that may arise and question is it ultimately worth it? Trade liberalization has led to the dumping of “e-waste” in third world countries such as Ghana and India with severe repercussions. E-waste consists of “used computers, cell phones, televisions, batteries, all kinds of things that contain mercury, lead, and heavy metals that are dangerous to people’s health and the planet” (BAN, 2011). Agbogbloshie, Ghana, has become one of the world’s largest dumping grounds where hundreds of millions of tons of e-waste piles up each year (WGBH Edcuational Foundation, 2009). Once a pristine wet lands is now the most polluted bodies of water on earth (WGBH Edcuational Foundation, 2009). Referenced now as “the bitter end of the supply chain where children, instead of going to school, wander barefoot gathering bits of salvaged metal for pennies (Gobel, 2014). American e-waste disposal facilities are exploiting third world countries by shipping this waste to dispose of it for cheaper costs. “There is an ugly underbelly of economic globalization that few wish to talk about. Under the guise of simply utilizing the “competitive advantage” of cheap labor markets in poorer areas of the world, a disproportionate burden of toxic waste, dangerous products, and polluting technologies are currently being exported from rich industrialized countries to poorer developing countries” (BAN, 2011). Allowing situations that produce outcomes such as those in Agbogbloshie is not justifiable. “Some kids drag speaker magnets strung on cords behind them, wandering the grounds for hours so bits of metal stick to the magnets. They then sell their catch – bits of circuit board, screws, aluminum, copper – to metal traders next door” (Gobel, 2014).

    Now there is India, where about 80 percent of United States e-waste resides (BAN, 2011). India however takes the e-waste to yet another level. In India e-waste is separated and reused, remade into products which are resold to the United States. “Sometimes the companies will mix that plastic with virgin plastic to lower their production costs. No one knows. They are able to skirt regulations and toxic standards this way. Or else they just go ahead and make new toys of it, even with all that lead, and sell them on the informal market” (BAN, 2011). The ramifications of trade liberalization in countries such as Ghana and India has resulted in harmful effects, not only to the environment and public health within their countries but globally. Banning the exportation of waste should be implemented and strictly enforced. Even though Europe has bans against this export e-waste is continuing to arrive, cleverly labeled as used goods (Gobel, 2014). Either way the trade of waste to this extent is not justifiable.

    BAN. (2011, 06 25). As e-waste piles up, disposal issues grow. Retrieved 07 23, 2014, from Basel action network: http://www.ban.org.

    Gobel, A. (2014, 07 01). Home for some, e-wast dump for the world. Retrieved 07 23, 2014, from Deutsche Welle: http://www.dw.de.

    WGBH Edcuational Foundation. (2009, 06 23). Ghana: Digital Dumping Ground. Retrieved 07 23, 2014, from Frontline World: http://www.pbs.org/frontlineworld/stories/ghana804/video/video_index.html.

    • Jason B.

      Apple, an Example of How a Multinational Corporation Behaves in Regards to “E-waste”

      Response to Amanda

      Amanda, I really enjoyed reading your blog post. There was a lot of interesting points that highlight the pitfalls of the world’s obsession with technology. Nowadays, with technology changing at an ever exceeding pace, multinational corporations (MNC) need to lead the way in finding new solutions in regards to e-waste. Contrary to this idea, one multinational corporation, Apple, is leading the way and setting an example for other MNC’s in how they can reduce their e-waste footprint.

      Apple, is one of the world’s greatest MNC’s and according to statistics on their website; Apple has sold over 1.3 billion devices. This makes for a lot of e-waste and poses substantial environmental hazards. According to Anthony Austin, who wrote an article in the Golden Gate University Environmental Law Journal stated that, “80 to 85 percent of electronic products were discarded in landfill or incinerators, the latter releases harmful toxins into the air” (Austin 2014, 226). Another interesting fact according to the Silicon Valley Toxic Corporation, e-waste only represents 2 percent of the trash in United States landfill, however that 2 percent equals to 70 percent of the overall toxic waste. Only 12.5 percent of e-waste is currently recycled (Voakes 2014). Apple realized this problem in the early 2000’s and has started some of the strictest recycling programs of any MNC.

      Apple’s Recycling Program strives for what other MNC’s should live up to and operates in 95 percent of the countries where Apple is present. Apple recycles or reuses any iPad, iPhone, iPod, Mac or PC and is free of charge and anybody is welcomed from individuals to small business owners. According to the Environmental Protection Agency (EPA), a large number of what is considered e-waste is not actually waste at all, but equipment or parts that can be readily marketable for reuse of recycled (EPA 2014). According to Apple’s website, their recycling policy states, “No waste from Apple’s U.S. recycling program is shipped outside North America. All recovered materials are processed domestically, with the exception of some commodity materials that can be recycled for future use” (Bertolucci 2009). It is this “commodity materials” that according to Jim Puckett, founder of Basel Action Network (BAN) that gives Apple a loophole. BAN is trying to pressure MNC’s, including Apple and other tech leaders to sign a Manufacturer’s Commitment. This commitment is a pledge for MNC’s not to export e-waste to developing countries, particularly India. With e-waste expecting to grow as worldwide demand for technology grows, MNC’s must follow the lead of Apple in reducing the amount of e-waste by implementing recycling and reuse programs and by making a conscious effort to leave the environment in a better place than you found it.

      Austin, Anthony A.. “Where Will All the Waste Go?: Utilizing Extended Producer Responsibility Framework Laws to Achieve Zero Waste.” Golden Gate University Environmental Law Journal. 6.2 (21 June 2013): 226.

      Voakes, Greg. “The Lesser-Known Facts About E-Waste Recycling.” Business Insider. 17 October, 2012.

      Bertolucci, Jeff. “How green is Apple: Where does the e-waste go?” Macworld. 21 April 2009.

    • John L.

      Response to Amanda

      Trade liberalization has increased the number of electronic waste (e-waste) dumpsites in third world countries, which has become a health hazard to many people in the surrounding areas. Businesses exploit the open land and deprived economy without much regard for local health. Although trade liberalization has an influence, I would hardly say that it is the main cause of such dump sites. You do not need to travel to third world countries to see the effects of e-waste. According to a report on waste disposal in the United States, in the year 2010 we had to dispose of over two million tons of e-waste. Although the rate of waste disposal goes up every year, this is a trend that should have been expected. Humans’ rates of production for most any products are constantly going to go up, and with that come the need for disposal and increase of overall waste. In the modern world, societies are always finding ways to be more eco-friendly. Although the rates of waste disposal have gone up over the years, so have the rates of recycling. From 2000 to 2012 the rate of recycling electronic waste has gone up nearly twenty percent, from %10.0 at the start of the century up to %29.2 in 2012.

      The issue of e-waste in third-world countries is not a matter of trade liberalization but of underdeveloped societies with little to not infrastructure within their government. Without structured government, a nation cannot enforce necessary laws and regulations for proper disposal of wastes. Third-world countries and other underdeveloped nations do not have strong governments, so businesses may exploit the lack of regulations as a means to get rich. No matter how much you want to blame trade liberalization as the root cause of e-waste and the ensuing health hazards, it is really based upon the strength of a government in enforcing rules and regulations.

      (n.d.). Retrieved July 26, 2014, from http://www.electronicstakeback.com/wp-content/uploads/Facts_and_Figures_on_EWaste_and_Recycling.pdf.

  3. Katie L.

    In order to have a full picture of the effects of trade liberalization on developing countries, it is first necessary to recognize that trade liberalization is in and of itself not the full picture of the economies in those countries. There are more factors that either help or harm a country’s economy, and there are more factors that should be a part of the solution when thinking about supporting growth and development in these countries.

    Former UK trade and industry secretary Stephen Byers writes about several examples of trade liberalization failing to help developing countries in The Guardian newspaper. For example, in the 1990’s, Mexico experienced economic growth as a result of trade liberalization. This would seem like a good thing, but the reality was that the number of people living in poverty increased by 14 million compared to the 1980’s. Though the economy grew, it did not benefit the poor (Byers 2003).

    It’s not that trade liberalization was specifically to blame in this instance, but more of a case that the trade liberalization was not implemented along with other policies. In this case, specifically that the benefits of liberalization were only felt by large, commercial interests, whereas smaller scale interests were ignored.

    Matthew Davis writes in a report for the National Bureau of Economic Research that the cause for this disconnect was not because trade liberalization failed the Mexican economy, but because it had a focused impact on people living in northern “high-exposure states”, where they were directly impacted by the increase in trade (Davis 2005). Comparatively, people living in the southern states had little exposure to the increased trade and as a result did not reap benefits.

    Trade liberalization in and of itself is not the cause of harm in developing countries. Rather it’s bumpy implementation in countries like Mexico shows that it is necessary to monitor its effects and, in some cases, create corresponding solutions for countries with diversified economies that cannot be helped solely by improving trade.

    • Jennie F.

      Response – Trade Liberalization and the Environment

      Response to Katie

      In the business of global trade and industry, companies race to get the best products for the lowest cost. By going overseas to lesser-developed countries, large companies have been able to save on labor costs while supposedly providing jobs and opportunities for the locals. But as you’ve already stated, there should be other policies in place to prevent many of the problems we find in trade liberalization, but as increased poverty, the decrease of local and small businesses, and most importantly to the whole world, a rise in pollution, specifically to our sources of water.

      In a brief overview of the pros and cons, it seems in general that trade liberalization really boosts economies that are already well established and the fortunate few in the countries where industries decide to expand to (Pettinger). Most other people are still fraught with poverty, because while the economy expands, the gap between the rich and the poor grows with it. However, the biggest concern to be found in this era of vast global economics is the pollution of the world’s water sources.

      To be fair, the declining quality of drinking water is due to many factors, including “human population [growth], industrial and agricultural activities [expanding], and climate change” (“Water Quality”). However, according to the UN, unsafe water kills more people per year than all forms of violence, including war (“Water Quality”). In this way, both the growing population and commerce contribute to this issue. However, a case could be made for laws to be passed so that businesses reduce their waste and rely on more ecologically-friendly means of production. If then treating sewage was really the only problem a country had, then couldn’t additional money and jobs be made out of making treatment plants?

      It is not just drinking the water that is the issue. Unclean water makes for lots of issues with sanitation, which if sanitation is virtually unattainable, disease is more likely to spread, either from the water itself or into food like crops and animals. This lack of clean water on multiple fronts puts an unfortunate setback to the growth of access to clean water around the world, which grew by 2 billion people between 1990 and 2011 (UNICEF, 2013). While this is good, the pollution caused by population and businesses who have no regard for the environment are making it increasingly difficult for people around the world to have clean water.

      So yes, not everything about trade liberalization is bad. However, without the right policies put in place (and fast), the world faces an increasingly more urgent problem of water contamination. With as little freshwater as there is one the planet (compared to saltwater), and with how fast the global population is growing, it is imperative that clean water be the top of everyone’s priority list, which is something that trade liberalization and big, global businesses could make a huge change for the better.

      Pettinger, Tejvan R. “Trade Liberalisation.” Economics Help. WordPress.com, n.d. Web. 26 July 2014.

      “Water Quality.” UN News Center. UN, n.d. Web. 23 July 2014.

      “Water Quality.” UNICEF. N.p., 24 May 2013. Web. 26 July 2014.

  4. Meghan J.

    What Price Does Third World Countries Have to Pay, to be on The Same Playing Field as Developed Countries?

    Trade liberalization is a major part of a county’s success, “No country in recent decades has achieved economic success, in terms of substantial increases in living standards for its people, without being open to the rest of the world” (IMF staff, 2001). By trading resources, it creates many benefits for both developing and developed countries, like decreasing the poverty rate for example.

    Yes, economic globalization does have its benefits, but most of those benefits are directed more towards developed countries; like the Unites States for instance. Besides China, the United States is one of the most powerful, dominant countries. By increasing trade, and making its own resources (i.e. oil), it makes it almost impossible for developing countries, like Iraq, to keep up. I say this because these third world countries are trying to “catch-up” to the other more developed countries. And they are so far behind I do not know if they ever will. Globalization is expanding; rapidly, countries are becoming more and more interdependent, which is ultimately going to raise the prices of taxes and trade. With the higher prices it is going to make developing countries fall even further behind because they simply cannot afford to keep up with the other competition.

    One idea that I personally do not agree with, is the idea that trade liberalization is directly to blame for this “catch-up” game developing countries are playing. The main reason this expanding economic globalization has had such negative effects on developing countries, is mainly because of the trillion dollar debt. There are also more issues like the rise in terrorism, which also affects this trade liberalization. But if we could eliminate the monstrosity of a debt in developing countries alone, I believe they would have more of a chance to at least be on the same playing field as the developed countries. Even though the recessions have hit everybody hard, they have hit the developing countries even harder. That means that, countries that do not have the luxury of having access to endless amounts of resources are suffering.

    “In the area of capital movements, it is noticed that the net official flows of “aid” or development assistance from the advanced economies to the Third World Countries have dwindled significantly since the early 1980s” (Ekwuruke, 2005). Sure, some developing countries have alliances with developed countries, and while that may be working for now, what happens when the developed countries become even more powerful? I do believe that when it comes to third world countries, the benefits of trade liberalization most definitely outweigh the cost of achieving those benefits.

    Ekwuruke, Henry. “Globalization and Third World Countries – Panorama – TakingITGlobal.” Globalization and Third World Countries – Panorama – TakingITGlobal. N.p., 2 Aug. 2005. Web. 24 July 2014. http://www.tigweb.org/youth-media/panorama/article.html?ContentID=5964.

    Staff, IMF. “Global Trade Liberalization and the Developing Countries — An IMF Issues Brief.” Global Trade Liberalization and the Developing Countries — An IMF Issues Brief. N.p., Nov. 2001. Web. 24 July 2014. https://www.imf.org/external/np/exr/ib/2001/110801.htm.

  5. Carly P.

    The Trouble with NAFTA

    “In a 2009 study, Robert Blecker of American University and Gerardo Esquivel of the Colegio de México found that for all its promise NAFTA had failed to close the development gap between Mexico and the United States” (1). The North American Free Trade Agreement took off with a start in 1994, promising strengthened economies for Canada, Mexico, and the United States. NAFTA was supposed to curb immigration (2), boost production of exports (3), and bring jobs and a higher quality of life (2) to the people of Mexico. Each positive aspiration came with a flagging reality, however, as local businesses were unable to compete with new market prices. As The New York Times notes: “Mexican manufacturers, once protected by tariffs on a host of products, were driven out of business as less expensive, higher quality merchandise flowed into the country” (2). In fact, manufacturing employment in Mexico “declined to 3.5 million by 2004 from a high of 4.1 million in 2000” (2), and Mexico’s average working wages “are lower now than they were when the agreement was adopted despite higher productivity, income inequality is greater there, and immigration has continued to soar” (3).

    1.) “NAFTA at 20: Ready to Take Off Again?” The Economist. Jan 4th 2014. Web. http://www.economist.com/news/briefing/21592631-two-decades-ago-north-american-free-trade-agreement-got-flying-start-then-it.

    2.) “NAFTA Should Have Stopped Illegal Immigration, Right?” The New York Times. February 18th, 2007. http://www.nytimes.com/2007/02/18/weekinreview/18uchitelle.html?_r=0.

    3.)“Report Finds Few Benefits for Mexico in Nafta.” The New York Times. Nov. 19th, 2003. Web. http://www.nytimes.com/2003/11/19/world/report-finds-few-benefits-for-mexico-in-nafta.html.

    • Anna Green

      Mexico Sees Many Benefits of NAFTA, but Still Falls Short of Promises Made

      Response to Carly

      While Carly is absolutely right about NAFTA’s failure to close the wag gap as promised, NAFTA has been able to bring other benefits to Mexico. Mexico has seen a ten fold increase in its exporting since 1994, with a total of $1 billion worth of exports each day (Beltrame 2013). Another benefit of NAFTA to Mexico is a swelling middle class, which does not share standards as high as the U.S. or Canada, but it does indicate that there are more people with higher living standards than before NAFTA was introduced. As a result of NAFTA, more people have been freed from poverty, which means more people can have their own cars, and enjoy more luxuries than before (Beltrame 2013). Mexican people have seen a huge increase in their selection as consumers. Before NAFTA, there was not much of a selection for consumers to choose from, but now Mexican people have a much larger selection of food products, clothing, and other products that they did not have access to before (Stevenson). Trade between the Canada, Mexico and the U.S. has increased about 3.5 times what it was in 1994. There are many benefits of NAFTA, although as Carly has said, the benefits clearly do not measure up to what was promised of NAFTA in its beginning. According to economist Jaime Serra Puche, “NAFTA has been excellent for Mexico,” although this does not take into consideration that Mexico still suffers from notoriously low wages (Beltrame 2013). Another downside to NAFTA is that despite North American Development Banks spending $1.33 billion as a side project of NAFTA to improve waste water and sewage treatment, these developments still fall short of the quality that can be observed in the United States. Untreated sewage continues to flow, and the air quality still remains very low in many communities (Stevenson). While many benefits have been seen due to NAFTA, they certainly do not equal the promises that were made on its behalf.

      Beltrame, Julian. “NAFTA’s Biggest Winner? Mexico.” Huffington Post. The Canadian Press, 29 Dec. 2013. Web. 25 July 2014.

      Stevenson, Mark. “20 Years after NAFTA, a Changed Mexico.” The Boston Globe. Associated Press, 3 Jan. 2014. Web. 25 July 2014.

  6. Francesca S.

    Trade liberalization is a large part of America and it’s trading systems. Although many would argue that trade liberalization has larger benefits then it does negative qualities, such as lower consumer costs, and fosters economic growth (Trade, 2014). trade liberalization contributes more negative qualities two countries involved. A few of those qualities include; cost jobs, lives, and in the quality of the goods may decrease (Trade, 2014).

    In 2013 China was ranked the number third most popular trading partners with the US and exports in the number one US partner and imports (Top, 2013). And although over the years there has been much controversy with the trading involving China due to their lack of labor laws, it is still a top trading country for the US. Big businesses are able to move their businesses to China to get cheaper labor, therefore making more of a profit off of their goods. This removes jobs from the US, and is putting money into another economy that is not ours.

    Even though the US does not support China’s labor laws, we are not doing too much to stop them. Although the poor labor laws you bald not due to the US’s trading specifically, the US is in support of the companies that abuse these labor, allowing for more of a reason to keep doing what China has been doing.
    According to nation master, china’s minimum wage sits around $1.73 in comparison to The US is minimum-wage of $7.25. China’s unemployment rate currently is at 4% while the US is unemployment rate is at 9.7% (China Labor Stats). Between the two statistics there is a correlation in regards to china’s low minimum wage cost and their increased employment, providing facts that the US is losing jobs to China.

    Trade Liberalization Definition | Investopedia. (2014.). Investopedia. Retrieved July 24, 2014, from http://www.investopedia.com/terms/t/trade-liberalization.asp.

    Top U.S. Trade Partners. (2013). Trade . Retrieved July 25, 2014, from http://trade.gov/mas/ian/build/groups/public/@tg_ian/documents/webcontent/tg_ian_003364.pdf.

    “China Labor Stats”, NationMaster. Retrieved from http://www.nationmaster.com/country-info/profiles/China/Labor.

    • Mich B.

      The issue with outsourcing isn’t liberalization, it’s human greed

      Response to Frankie

      Trade liberalization is definitely a huge part of the trading system of the United States. Trade liberalization only has negative qualities due to extraneous circumstances that really have nothing to do with the idea of trade liberalization itself.

      According to the business dictionary online trade liberalization is: “The removal of or reduction in the trade practices that thwart free flow of goods and services from one nation to another. It includes dismantling of tariff (such as duties, surcharges, and export subsidies) as well as nontariff barriers (such as licensing regulations, quotas, and arbitrary standards)” (businessdictionary) Outsourcing labor to China kind of falls under the category of trade liberalization. I would argue that it both does and does not as outsourcing is a strange little loop of avoiding cost.

      The problem mentioned in your second paragraph is actually one with capitalistic greed on the part of big business in the United States. Bringing factories to other countries with fewer labor regulation laws is not in itself a bad practice. American businesses could, theoretically, provide jobs with decent pay for lots of Chinese people. A columnist in a Wisconsin paper talks about how outsourcing actually helps business in Wisconsin as everything they need to buy cannot possibly be produced in the United States (Madison).

      I would argue that simply saying we need to stop outsourcing isn’t really the solution. The solution would be a regulatory board that makes sure American businesses are paying decent wages to the people they hire in other countries. Regardless, this isn’t really even an issue of liberalization. They are tied together but strictly speaking the issue to be addressed here is corporate greed hurting people in other countries instead of global trade.

      An argument to my point would be that there needs to be more regulation on such matters on a global level (like tariffs specifically on outsourced goods, international unions, etc) but this won’t fix the fact that people are greedy and will do things to try to cut costs and increase profits.

      BusinessDictionary.com. web finance, 27 July 2014. web. http://www.businessdictionary.com/definition/trade-liberalization.html.

      Madison, Tom. 2014. “’Outsourcing’ part of modern economy” LaCrosseTribune. 27 July. http://lacrossetribune.com/news/opinion/tom-still-outsourcing-part-of-modern-economy/article_a9844d7a-cc3d-5ae5-8081-8779483e4aa8.html.

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