Multiple Essays on Globalization, Trade Liberalization & More

Resource Description

Discuss the impact of globalization and trade liberalization on the global economy

Globalization is a process of increasing integration among people, firms and nation. Trade liberalization has the potential to accelerate globalization as it is the removal of barriers to trade between nations. Globalization and trade liberalization have greatly impacted upon the global economy, and this is seen through increases in global economic growth and investment. However, globalization and trade liberalization have not been entirely beneficial to the global economy, as they have also facilitated an increase in income equality and a decrease in environmental sustainability. Perhaps, as globalization and trade liberalization has had both beneficial and negative impacts on the global economy, we must consider whether it is beneficial to continue to pursue globalization and trade liberalization.

Globalization and trade liberalization have both impacted upon the global economy by increasing levels of economic growth and development. Economic growth represents an increase in the capacity of an economy to produce goods and services, and is measured globally by changes in GWP. Globalization has resulted in nations becoming more interdependent on each other, and trade liberalization has ensured nations exports have greater penetration into foreign markets, both of which have resulted in increases in GWP, and hence economic growth. Over time, world economic growth has increased, albeit slowly (was 3.5% in 1980 and is now 4%), and this is likely due to the large impact lag of microeconomic reform which is used in the implementation of trade liberalization. Despite this impact lag, according to the WTO, world merchandise trade volume – another measure of global economic growth – “is expected to grow 4.4% in 2018, accompanied by GDP growth of 3.2% at market exchange rates” demonstrating how economic growth should continue to grow in the future. While world GDP growth has remained fairly stagnant in the past decades, regional economic growth, particularly in areas where emerging economies are present, has increased largely. This is largely due to globalization and trade liberalization, which has, according to the IMF “increased regional demand and potential market size” and allowed for emerging economies to participate in the global production process. Indeed, the is is evident as East Asia region has witnessed approximately 10% economic growth per annum for last ten years. Hence, it is apparent how globalization and trade liberalization have increased economic growth in emerging economies and should increase global economic growth in the near future.