Trade and Globalization

Overview:

Although 'globalization' has become a controversial buzzword in the past few years, international trade has been an important part of the world economy for a very long time. The 'opening up' or 'liberalization' of most country's domestic markets to trade has occurred gradually over the past 50 years, in large part due to the success of the General Agreement on Tariffs and Trade (GATT), which has now become institutionalized as the World Trade Organization (WTO). Access to other markets brings opportunities, but it also creates vulnerabilities like any competitive market. As trade becomes more open, there will be winners and losers among the producers and consumers in participating (and non-participating) countries. Differences amoung countries in their health, safety, environmnetal and labor standards are also sources of contention, because they are sometimes perceived as unfair sources of competitive advantage, or because of perceived pressures to harmonize standards and policies across nations.      Over the past 50 years, the US economy, including both producers and consumers, have seen large gains in economic activity and growth that most economists attribute at least partially to an increasingly open, efficient, and competitive world market. Economic growth globally has been about 2.5 times higher in the post-WWII period compared to the pre-WWII period, with trade's share of US GDP rising from 9% to 27%, and US merchandise exports rising from 4% to 40%. US consumers have benefited by having a wide range of choices among goods differing in quality, price, and kind. US producers have benefited from having access to a potential customer-based far larger than what exists in the US alone.      The relationship between trade, trade liberalization and growth has been a contentious issue in recent years. The analysis of economic data shows a positive correlation between the openness to trade of a country and the economic growth of that country. Critics claim that such results do not tell us much about the causes and limits of growth. And although many countries have benefited from policies that try to integrate them into the world economy, some lagging countries have not benefited. The reasons for this include civil conflicts, macroeconomic policies including exchange rate overvaluation, and the trade distorting policies of high-income countries. {less}

Frequently Asked Questions (FAQs)
	Isn't trade unfair when foreign workers are paid such low wages?
	Isn't the US trade deficit proof that our trade agreements aren't benefiting us?
	Has NAFTA been good or bad for the US, and Oregon's, economy?
Other Resources and Internet Links
	The US Trade Representative's mission
	Globalization: Threat or Opportunity?(IMF)
	OREGON'S FUTURE: A Forum on International Trade(IMF)
Publications, Presentations and Working Papers
	WTO, NAFTA and Oregon (by Barbara Dudley)[PDF]
	NAFTA and WTO are good for Oregon (by Ray Mikesell)[PDF]