International Trade and Competitiveness

International Trade and Competitiveness

International Trade and Competitiveness

International trade can be viewed from a number of perspectives, but globalization is arguably the most compelling. When globalization became a reality, all of the old international trade paradigms from centuries past became history. From the ancient silk route to modern air freight, they all had to take a step backward to make way for the new global economy. In a sense, globalization creates a virtual community of the entire world. Regardless of where any country is located, it is ôright next doorö in terms of trade. Desert nomads with a laptop can trade online right along with big corporate executives in major cities around the world. Globalization brings everyone to the table, and everyone has an equal shot. The inconvenience of a bad location is irrelevant, and the inability to gain access to the game has been circumvented.

The beauty of globalization is its ability to make the trading field more even. Super powers like the United States and China belly up to the table right next to peasant communities in remote villages around the world. What matters in the global economy is who can provide the best product for the lowest price. It is easy to see how this can benefit the less fortunate countries. If a little Indian tribe can make handwoven blankets that outstrip anything available anywhere else, that little Indian tribe can become rich selling to the world market. Once the little tribe achieves success, the flow of capital into the area raises the standard of living for the whole area. Globalization creates a trade environment where everyone has a chance, and growth can be exceptionally rapid.

Prosperity is not the only advantage of globalization, however. Globalization is drawing the world more tightly together in a number of ways. First, it effects the movement of people across international borders. Second, knowledge and technology also migrate across borders….