Globalization: Benefits and Drawbacks

Topics: World Trade Organization, International trade, North American Free Trade Agreement Pages: 4 (1367 words) Published: October 31, 2008
Critical Thinking Assignment #2: Globalization

Countries engage in international trade for the following reasons, a lack of raw materials and natural resources such as coal, gas, steal, lumber, and oil to fuel industry and development, processed foods and crops not able to grow or be produced in some climates, finished products, specially products exclusive to there countries of origin, inexpensive labor, and need of land. Japan is a perfect example of the need for importing goods and exporting products. Because it is an island with few natural resources Japan imports massive amounts of fuel and raw materials much of whitch goes into industry. Then take the raw materials and turn them into finished products. Japan builds and exports goods for many companies like Toyota, Honda, Nissan, Suzuki Mitsubishi, Yamaha, Kawasaki, Mazda, Hitachi, and Subaru and many others. The United States is also a good example of international trade. The U.S. exports raw material and parts and imports assembled goods. Wealthy countries do this with poorer countries because the cost of labor is so low.

The North American Free Trade Agreement (NAFTA) was created on January 4, 1994 it is a treaty that presides over all of North America. Mexico, Canada, and the United States NAFTA was engineered to promote better trade between the three countries. NAFTA reduced the amount of taxes placed on traded goods which has lead to Mexico and Canada buying more American goods. Over the years NAFTA has had additional treaties added to it like the North American Agreement for Economic Cooperation (NAAEC) the North American Agreement for Labor Cooperation (NAALC)and the Security and Prosperity Partnership of North America (NASPP). Many democrats and republicans don’t like NAFTA because it removed import taxes, by doing this it has brought a lot of cheap foreign goods and has led to the outsourcing of American jobs. “The World Trade Organization (WTO) is the only global international organization...
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