International Trade
Sep 1st, 2008 by Scott Hebert
International trade presents unique opportunities and threats to workers. Workers in developing countries experience the most opportunities from international trade. Thanks to direct foreign investment, new job opportunities and technological innovation leads to increased wages for workers in developing countries. These opportunities in developing countries may even lead to worker migration as workers in some countries move to find new and better opportunties (IMF Staff, 2000).
As these opportunities increase in developing countries, there is a perception in developed countries that their work force is threatened. The fear experienced by most workers is that jobs in developed countries will move to developing countries. Fortunately, these fears are generally not well-founded. As jobs move from developed to developing countries, high-skill and service-oriented jobs appear in developed counties effectively filling the void. Unfortunately, the transition is not perfect and workers in some industries may find it difficult to transition into the new opportunities (IMF Staff, 2000).
The international trading system is not self-regulating. It relies on the World Trade Organization (WTO) to create rules and standards by which countries should trade. Jeffrey J. Schott (1996) describes three areas that present challenges to the WTO and international trade: (1) traditional trade barriers, (2) new forms of protectionism, and (3) regionalism (p. 17). Traditional trade barriers seek to limit trade liberalization and undo any advancements made to increase internation trade. New forms of protectionism are often embedded into domestic policies and must be unraveled to promote trade. Increasing regionalism seeks to diminish support for the WTO and block international trade in favor of inter-regional trade (Schott, 2006). Individually, these challenges are enough to cause concern for members of the international trade community. Together, they present a major threat that must be addressed in order to ensure a healthy market for the entire world.
IMF Staff. (2000). Globalization: Threat or opportunity? Retrieved September 1, 2008.
Schott, J. J., (1996). The World trading system: Challenges ahead. Washington, DC : Institute for International Economics.