Globalization and Trade

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Globalization is how different parts of the world are connected. People, ideas and goods move more easily around the world.

Globalization also changes the way companies and countries trade with each other. This shows how globalization affects economies. Globalization has improved people's lives in poor countries. However, sometimes globalization doesn't bring new jobs or money to other countries.

Globalization In the Past

Globalization is not new. People have always traded goods with their neighbors. At one point, people began traveling to distant places. People traded their own goods for other products.

The Silk Road is an example of early globalization. The Silk Road was an old system of trade routes. The routes connected the continents of Europe and Asia. China is a country in Asia. The Silk Road was helpful because there were no trains then. Europeans traded products made of glass and other goods for Chinese silk and spices.

Image 2. This map shows the main routes of the Silk Road. Photo from: Wikipedia.

Later on, trade developed between Europe, Africa and America. Sadly, most of it involved slavery. This showed how globalization can truly hurt people. European ships carried products from Europe to Africa. In Africa, the products were traded for enslaved Africans. These enslaved Africans were then forced to go to the Americas. From the Americas, the ships carried raw materials like sugar, tobacco and cotton back to Europe. In Europe, the raw materials were used to make products. Then those products were brought back to Africa again. The cycle started over. This cycle was called the Triangular Trade. 

Globalization has grown in recent years. It is easier to send money and products to other countries. It is simpler for companies to contact other countries. Countries signed agreements that make it all easier for them.

Benefits Of Globalization

Globalization gives large companies an advantage. Companies can get materials for less money in poorer countries. They can pay less money to workers in those countries.

Also, different parts of a product may be made in different countries. T-shirts made of cotton are one example. Cotton is a plant. It might be grown in one country. Then, in another country the T-shirt is woven from those pieces of cotton.

Image 3. A McDonald's in Morocco. This restaurant chain is sometimes seen as a sign of globalization, called "McDonaldization. Photo from: Wikimedia Commons / Soman.

The result is more jobs in countries where jobs are needed. More jobs make people's lives more comfortable. People who buy the products are doing better, too. In general, globalization makes prices of goods lower. For example, globalization makes t-shirts cheaper.  Also, there are more goods for people to choose from.

Downsides

Not everything about globalization is good. Many jobs were moved to different countries. The people who had those jobs before were left without jobs.

In poorer countries, the working conditions of people are often very difficult. People there are paid very little for a whole month of work. A worker in the United States may get more money in one day than they do in a whole month. Also, children of poorer families may quit school so they can work.

Into The Future

Globalization is not perfect. However, globalization will continue. The result is a more connected world.