| Facts | | | | they will save themselves the hassle of moving and |
| The things that come to many minds when | | | | talking to people with different languages and |
| globalization is mentioned are loss of United States' | | | | accents all over the world. But organizations operate |
| jobs, NAFTA, CAFTA, APEC, outsourcing, and | | | | their businesses like puzzles, and for each puzzle, it |
| low-wages. The perception to most people is that if | | | | requires a lot of the pieces to be put together in |
| outsourcing is bad, then globalization must be bad. | | | | order to complete a puzzle. Going global is what it |
| The fact is that globalization is good for the United | | | | might take for most organizations to compete in |
| States of America and the market economy. It | | | | order to control costs and produce at an efficient |
| promotes prosperity for participating countries. What | | | | capacity. |
| needs to be done is to educate people on the | | | | Only winners are created in global trading, because |
| diversity and multiculturalism in the work place, and | | | | selling a product creates an increase in the demand |
| the sensitivity in the culture of the participating | | | | for that product because net demand by foreigners |
| countries. Listed below are the benefits of | | | | is added to domestic demand. Therefore, with the |
| Globalization and international trade: | | | | increase in demand, the price will rise. On the other |
| (1) Opportunity cost | | | | hand, buying a product will create an increase in the |
| (2) Comparative advantage | | | | supply of the product because net foreign supply is |
| (3) Cheaper to buy than to produce | | | | added to domestic supply. Hence, with the increase in |
| (4) The terms of trade | | | | supply, the price falls. No one loses; it is all a win-win |
| (5) Balance trade | | | | situation for all the participating countries. |
| (6) Changes in production and consumption | | | | Market economy is dynamic due to continuous |
| Role of Trade | | | | research and development, and the change in |
| The United States represents a major exporter of | | | | technology, and as such individuals will need to keep |
| raw materials and agricultural products, and imports a | | | | up with the movement and change by continuously |
| large volume of services. Market is efficient when | | | | attend seminars and undergo retraining. The old style |
| trading is concentrated on specialization. By | | | | of static market is over. |
| concentration, cost is minimized, profit is maximized, | | | | The argument has been made concerning exploitation |
| production is increased, and efficiency is maximized. | | | | of the poorer people in the developing countries. It |
| Specialization is achieved when participating countries | | | | also went further to compare their wages to slave |
| shift their scarce resources toward producing goods | | | | wages. The fact is, whenever the people of these |
| and services in which they have a comparative | | | | developing countries have opportunity to obtain jobs |
| advantage over other countries, and in turn, increase | | | | and earn more than they originally earn, it is |
| the consumption of all goods. | | | | improvement. Most parents in these countries are |
| To workers, this may not make sense if they are | | | | illiterate and do not know the importance of |
| losing their jobs, but organizations are in business to | | | | education, and because of that they send their |
| make money, and they understand what it takes and | | | | children to work at these production plants. They |
| how long it takes to break-even and to start making | | | | need to be educated on the importance of education |
| profits. Businesses do not intentionally try to hurt | | | | in order to begin sending their children to school |
| workers by laying them off. They rather keep the | | | | rather than to the production plants. |
| jobs in the United States, and by keeping it here, | | | | |