Essay: Negative impact of globalization (Page 2 of 2)

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  • Subject area(s): Geography essays
  • Reading time: 8 minutes
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  • Published on: March 23, 2018
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Here is a graph that shows just how many people in Bangladesh are working in garment factories. It is graphs like this, as well as the tragic building collapse that really puts things into perspective on how important human safety and ethics is. Unfortunately, because of globalization and the business selfishness that comes with it, these simple safety measures are put on the back burner.

A final negative point that is made in regard to globalization is a political aspect that many argue. Critics argue that despite what seems to be benefits of free trade and an interdependent global economy, it is actually hurting national governments. This shift in power takes national government power and puts it in the hands of global organizations like the World Trade Organization and United Nations. Though these organizations are important, they are mainly being run by unelected parties who now have power to make policies that effect entire governments. This thereby undermines the authority of those states and limiting the nation’s ability to control its own economy. The organization that receives the most criticism is the World Trade Organization. The World Trade Organization was founded in 1995 and is the only global international organization dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments. The goal is to ensure that trade flows as smoothly, predictably and freely as possible. The WTO arbitrates trade disputes between over 160 member states. There is then an overall panel who can issue rulings and instructions to the member states. Then if a member refuses to follow the put forward policies the WTO will impose appropriate sanctions. As a result of this power, many argue that power is then taken away from state governments who should be the overall power to tariffs, trade, and overall control of their economy. Some also argue that small countries face difficulties in meeting the cost of the WTO compliance because the rules are written by and for corporations with inside access to the negotiations and that proceedings are held in secret. This makes them technically undemocratic and therefore struggle to make regulations that fit different forms of governments to be as successful as possible. A prime example of how the WTO has had a negative impact is the Russian Automotive industry. Russia joined the WTO in 2012 after several years of negotiation. An economic area that was severily impacted by Russia joing the WTO was the automotive industry. This industry is politically and economically a very important part of the country’s economy. It directly employs around 600,000 people or 1% of the country’s total work force and supports around 2–3 million people in related industries. In a study done in 2012 it was found that a short-term negative effect will take place on supply due to higher competition and bigger presence of car producers on the market. The main risk is the reduction of duties on used cars that leads to a significant gap in price between new and used cars. Following the announcement of Russia’s WTO accession and new regulations in the automotive industry, the growth of imports of used trucks, the Russian truck fleet will age and that will negatively affect the safety, reliability and efficiency of transportations. Overall, the argument makes an important point that the WTO in a lot of ways runs a risk business. One where the basic rights of a democracy are challenged and then put into a potential overall risky power.

The globalization debate will always be there. For every positive aspect found, there will be people finding double negative aspects. The first step to identifying what side of the argument you land is understanding that globalization means reduction of barriers for international trade. That means any company can sell their output freely in the other economies. Globalization is the process or the outlook in which the firms acclimatize to the international markets for their products or services. The process of globalization requires the firms to adapt to the global market rather than being confined to a single location. Firms adapt the globalization policy as an expansion strategy for their products to keep up their profit margins. Once you understand Globalization from a border aspect, you are able to see the positive and negative sides of the spectrum. Personally, after researching both sides of the argument, I see the effects of globalization as predominantly a good thing. Consumers across the globe are provided with a large number of options to meet their needs. Global markets ensure that the consumers are provided with the options or solutions to their problems that the domestic country does not provide. Globalization opens doors for new products and services in the economy. Efficient markets ensure that the consumer can get products at a much lower or optimal rate in an open market than a closed economy. Global products in the domestic markets increase competition and the suppliers are required to provide goods at competitive rates and the product variety is large for the consumers to choose from. The consumers can benefit by saving money or acquiring the goods at cheaper prices. Globalization also ensures that the quality of product that the consumer gets is good. If the domestic market lowers the prices to match that of the international companies, it is also important that the companies match the quality of the goods or even surpass it to ensure product differentiation and attract customers. Another benefit of globalization is that the consumers can get the same products irrespective of the country that they live in. The consumer can buy the same product that suits his taste or preference around the globe. So though negative aspects will and can always be found, these crucial positive aspects out way the negative and therefore come to a conclusion that the concept of globalization is the future.

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