chapter  5
26 Pages

Going Global

The term globalization has generated much political debate, with those on the left generally mobilizing against globalization and the ills that are seen to be associated with it. Those that favor free markets and free trade have generally welcomed the globalization of economic activity, claiming that global competition can only benefit consumers. Certainly the 1990s saw a dramatic expansion in global trade and a general lowering of trade and tariff barriers. As indicated in Figure 5.1, during the 1970s and 1980s trade and foreign direct investment grew at roughly the same rate as economic output more broadly. However, from the late 1980s onwards trade (expressed in Figure 5.1 as exports) not only grew significantly but at a rate well in excess of the growth of the global economy as a whole (measured as global gross domestic product, or GDP). It follows that over the course of the 1990s and into the twenty-first century an ever greater share of the goods and services produced were traded across national borders. Some have argued that this significant expansion of crossnational trade is compelling evidence that we live in a truly global age in which the products and services that we consume are likely to be produced in quite distant places.