International Trade and Globalization Essay Example for Free

International Trade and Globalization Essay According to Hill, globalization refers to the shift toward a more integrated and interdependent world economy (2009). Globalization has several facets, including the globalization of markets and the globalization of production. Globalization of markets is to the merging of historically distinct and separate national markets into one huge global marketplace. Globalization of production is to the sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of production (such as labor, energy, land, and capital) (Hill, 2009). There are several traditional international trade theories that would support the concept of globalization. The first theory is free trade that refers to a situation in which a government does not attempt to influence through quotas or duties what its citizens can buy from another country or what they can produce and sell to another country. Another theory is mercantilism, which is an economic philosophy advocating that countries should simultaneously encourage exports and discourage imports. The final theory is the theories of Smith, Ricardo, and Heckscher-Ohlin. Smith, Ricardo, and Heckscher-Ohlin show why it is beneficial for a country to engage in international trade even for products it can produce for itself. According to Adam Smith, â€Å"countries should specialize in the production of goods for which they have an absolute advantage and then trade these good for the goods produced by other countries† (2009). Heckscher-Ohlin theory predicts that countries will export goods that make intensive use of those factors that are locally abundant; while importing goods that make intensive use of factors that are locally scare (2009). Finally, Ricardo’s theory suggest that countries should specialize in the production of those goods they produce most efficiently and buy goods that they produce less efficiently from other countries (2009). There are two major factors that drive globalization. The first driver is the decline in barriers that allow the free flow of goods, services, and capital that has occurred since the end of World War II (2009). For example with the decline in barriers, countries can export merchandise freely without any disruptions in hipments. During the 1920s, many of the world’s nation-states erected formidable barriers to international trade and foreign direct investment (2009). Many of the barriers to international trade took the form of high tariffs on imports of manufactured goods (2009). The second driver of globalization is technology change (2009). For example, the constant change in technology allows companies the ability to produce more, which in turn allows other countries to participate the building of developments. Another example is throughout time, the progress in technology permits communication to be more advanced by allowing people to access the Internet and the World Wide Web. The final example of technology change is the change in transportation. The change in technology such as commercial aircrafts and freighters that are tractor trucks and cargo ships that allows shipments to be packed in containers and shipped across the world. The effects of globalization have impact to the military, especially during a time of war. Armed Forces Network (AFN) is the main source of television communications throughout Europe. AFN supplies network to the military in Afghanistan and Iraq so the troops can unwind and watch television. AFN provides cross-border flow of television services. Another effect of globalization that impacts the military while being deployed is food services. Food that the local nationals transport to different military posts in Afghanistan is shipped in from other countries and cross through Iran. The third effect on the military of globalization on the military is the acts of violence against the military overseas. A poor country such as Afghanistan, rely on their local grown produce but instead is being taken over by products foreign product verses using the locals products. The final effect of globalization that impacts the community is the problem of outsourcing jobs. American’s have a high unemployment rate due to the lack of jobs in the market. The military is over strength because of citizens not able to find work. In the deployment zone, many civilians are risking their own lives to work as a contractor for the government because they cannot find work.