Whenever there is an exchange of goods, products or services among countries, global trading occurs. Such a business can be both beneficial and detrimental to countries. Having that competitive edge in the global market would entail businesses increasing their revenues while, at the same time, reducing their costs. The most common way by which companies reduce costs is through the reduction of labor costs by firing unneeded workers and employees. In contrast, an increase in revenue is best attained through foreign market expansion, especially in countries where there is a large demand for their products, goods and services. We shall go into the specifics of the pros and cons.
As was mentioned in our introduction, companies can increase their revenues through global trading. Also considered a pro of global trading is that, because the products and services are available locally, more and more consumers can purchase said goods at reasonable prices. Such is the importance of global trading so that it directly affects the living standards of nations. Obviously, countries that engage in foreign trade can see improvements in their living standards. Let us take look at African countries as an example. Because there is a great need for medicine and medical products, active trading in these products has helped prevent the deaths of millions of people living in this continent. Because of this, it is a must for countries to engage in global trading.
Not only does it bring in millions of dollars in investments, it also provides jobs for a number of people. By investing in innovative technologies and products from foreign nations, many countries have been able to provide their citizens with the basic needs of food, clothing and shelter. Global trading has also helped to build bullish economies in countries that were previously floundering economically. On the part of small- and medium-scale entrepreneurs, global trading has enabled these enterprises to flourish in the world market.
If there are pros to global trading, there are also a number of cons. It is a sad fact that certain political, social and economic issues of global trading have only driven poor people even deeper into poverty.
In his article Sallyport article (Fall 2005) “Examining the Pros and Cons of Global Capitalism”, Doug Schuler summed up best the cons of global trading…
“The basis of uneven development is that international exchange is inherently unequal and that international capitalism through foreign trade and investment tends to exploit the underdeveloped world.”
Indeed, global trading agreements like the North American Free Trade Agreement (NAFTA) has been persistently criticized for undermining both the working and environmental conditions of underdeveloped countries that have signed with these agreements. The statistics alone will show just how depressing the impact of global trading is upon the affected countries. For example, the US Bureau of Labor statistics has reported that around 50 percent of garment companies in the US are more appropriately labeled as “sweatshops”. In a BusinessWeek article (Oct. 9, 2008), it was reported that a supplier of Wal-Mart in Bangladesh has been makings its workers work for 19 hours per day. Even the U.S. has seen a tremendous loss of close to 2.7 million manufacturing jobs in January 2001 alone.
Per se, it can be a major factor in affecting economic and living conditions worldwide. However, what has made global trading more of a bane than a boon is the flawed economic policies that have only served their greed and not their helpless citizens who are striving to earn an honest living. Just take a look at some of the major headlines in the world today. Libyan rebels have toppled Muammar Gaddafi because of unfair labor practices, ranging from abysmally low wages to bans on strikes. Another dictator, Egypt’s Hosni Mobarak, was ousted from his position because of the citizens’ complaints of soaring food prices in the country. Similar events are also presently occurring in Syria. In most of these upheavals, global trade is a major factor. Because of greed for power and money, governments have been using global trading to further their gains, but at the expense of their people.
Such conditions have existed during King Solomon’s time, which led to his commenting in Ecclesiastes 8:9…
“All this I have seen, and there was an applying of my heart to every work that has been done under the sun, during the time that man has dominated man to his injury.”
Indeed, global trading has become a means of the continuing oppression of those in power upon their fellow man.