FREE TRADE AND GLOBALISATION

SUBMITTED BY-MAMTA RANA

SUBMITTED TO –MR.GURDEEPAK SINGH

What is free trade

Free trade is a system of trade policy that allows traders to trade across national boundaries without interference from the respective governments. In another words we can say that the act of opening up economies is known as "free trade" or "trade liberalisation." It usually benefits the larger, wealthier countries whose big companies are looking to expand and sell their goods abroad. In the one sector where developing countries have the most to gain - agricultural goods - wealthier countries maintain the highest level of "protection" of their own markets.

features:-

Ø Trade in services without taxes or other trade barriers.

Ø The absence of "trade-distorting" policies (such as taxes, subsidies, regulations, or laws) that give some firms, households, or factors of production an advantage over others.

Ø Free access to markets.

Ø Free access to market information.

Ø The free movement of labor between and within countries.

Ø The free movement of capital between and within countries.

What is Globlisation?

Globalization is a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology. This process has effects on the environment, on culture, on political systems, on economic development

Globalisation implies the following features:-

1. It means free access to the markets in the world without any physical (quota) or fiscal (tariff) or any other governments) restriction.

2. Globally standardized products need be marketed ail over the world..

3. Globalization requires resources like raw materials, finance and technology. Free access to quality raw materials, latest technology and cheap finance are important characteristics of this process at less cost.

4. In globalization. Free mobility of managerial personnel and entrepreneurs result into mergers, takeovers and structural regrouping in countries across the globe.

Disscusion Between free trade and globlisation:-

For globalism to work, America can’t be afraid to act like the almighty superpower that it is.…The hidden hand of the market will never work without a hidden fist—McDonald’s cannot flourish without McDonnell Douglas, the designer of the F-15. And the hidden fist that keeps the world safe for Silicon Valley’s technologies is called the United States Army, Air Force, Navy and Marine Corps.

— Thomas Friedman, What the World Needs Now, New York Times, March 28, 1999. Quoted from Backing Up Globalization with Military Might

The world is becoming more globalized, there is no doubt about that. While that sounds promising, the current form of globalization, neoliberalism, free trade and open markets are coming under much criticism.

The interests of powerful nations and corporations are shaping the terms of world trade. In democratic countries, they are shaping and affecting the ability of elected leaders to make decisions in the interests of their people.

Elsewhere they are promoting narrow political discourse and even supporting dictatorships and the “stability” that it brings for their interests. This is to the detriment of most people in the world, while increasingly fewer people in proportion are prospering.

Global Financial Crisis

Following a period of economic boom, a financial bubble—global in scope—has now burst. The extent of this problem has been so severe that some of the world’s largest financial institutions have collapsed. Others have been bought out by their competition at low prices and in other cases, the governments of the wealthiest nations in the world have resorted to extensive bail-out and rescue packages for the remaining large banks and financial institutions.

Criticisms of Current Forms of Free Trade

Last updated Friday, March 31, 2006.

While internationalism and equitable global trading allowing fair development is probably what most people would like to see, the current model of corporate-led free trade and its version of globalization that has resulted, has come under criticism by many, many NGOs, developing nation governments and ordinary citizens

Public Protests Around The World

Last updated Tuesday, November 25, 2003.

As more and more people around the world are being negatively affected by the current corporate-led form of globalization, there are an increasing number of protests. While most have heard of the Seattle and Washington D.C. demonstrations against the WTO and the IMF/World Bank, respectively, there have been many around the world. Media portrayal by the corporate-owned mainstream of course, has been biased against the protesters.

Resources:-

Ø Goggle

Ø Wikepedia

CONCLUSION

Free trade is a trade policy that allows traders to transact business without any sort of interference or intervention from the government. It is believed that free trade leads to mutual benefits for both the trading partners. It differs from other forms of trade in that there is no creation of artificial prices, or a false demand and supply of products. In a protectionist trade economy, government intervenes in the form of subsidies, taxes, tariffs, etc to lower prices of goods or adjust supply of products