Trade and Globalization as Seen Through Developing Countries

    The economic principle I examined was that “People gain when the trade voluntarily” with the overall question “Is the current system of globalized trade really voluntary trade and do both sides benefit to the same extent?”. The inspiration behind my topic came from the idea that if the trade is globalized, lesser developed “third world” countries can easily be taken advantage of by the more developed “first world countries”. There are many examples of how this economic principle can be applied to the real world. While studying a globalized trade, I found many examples.

Graph Showing Size of Global Economies by Nation

    First, in the article “Against the grain; Quinoa” in the magazine “The Economist”, a non-partisan stance about current economic subjects, the idea that fads across the global such as quinoa cause harmful spikes in the smaller country developing the good. What happened in 2013 was that the boom in quinoa’s popularity caused farmers in the Andes to overproduce the grain while also making it too expensive to buy themselves because the price selling it overseas was higher than what they’d buy it for in their home countries. Then, after other countries started to produce quinoa and Peru wasn’t the only supplier—they now had to compete globally—it harmed the local economy. It shows how the globalization of trade benefitted the consumers and middlemen buying the grain from the farmers, but not the farmers themselves, so both sides did not gain when they traded volunteers. The issue comes in when the Andes people soon began farming the grain for millions of more consumers and the increase in the price hit the villages hard when they could not afford to buy their food staple, which brings up the question: does increased economic opportunity really help small societies?
    Second, in the article “A Better Way to Buy One, Give One”, written by Ashoka, a contributor group that focuses on bringing attention to pioneers of social change, discusses how the business strategy of TOMS Shoes, Inc., a show, and fashion brand, uses its status as a “change making brand” to boost their own sales. Toms is well known for donating a pair of (poorly made) shoes for every pair it sells to children in Africa, which on the surface seems like a great idea, but under the surface, not only do the shoes fall apart after a few weeks, it stills the local shoe economy. The article offered two solutions: either don’t use donations as a business tragedy to boost sales or the better idea: set up factories in places in need of jobs and stimulate the local economy. It shows that not all times where globalized trade harms is because of greedy corporations and that even “good deeds” can have negative repercussions because of the complicated nature of the globalized economy.  The overall idea is that companies cannot expect to just donate a good, but instead, to be non-profit, they must enact change for the solution to poverty, otherwise, they just hurt local businesses.
    Third, in the source “European Union’s 10 Point Argument Defending Globalized Trade”, the counterargument to the idea that globalization trade only harms comes from the European Union, who would be biased because the European Union represents one of the major trade country unions. The arguments the article supplied were: the GDP of countries have increased because of global trade, which may be true, however, the post doesn’t prove that individual incomes rise along with the GDP, and if corrupt business practices such as too low wages or child labor went into supporting the GDP rise, then it’s not beneficial to the third world countries, just to the first world countries who profit, “Trade plays a role in the improvement of quality, labor, and environmental standards through increased competition and the exchange of best practices between trade partners” it offers quality control, however, it does not offer protection against employee abuse, as global trade promotes sweatshop labor. It does, however, give employment that would not exist otherwise.  It also promotes the idea that trade creates a peace treaty of sorts: countries who depend on each other economically won't go to war and harm the balance.
Overall, you can see that globalized trade has many benefits and when two nations both gain from the trade it’s great! More efficency, more peaceful relations, and more prosperity overall, however, it’s incredibly easy for larger nations to take advantage of smaller ones which leads to sweatshopp labor, control of economies, and manipulation of trends to suit only the larger economy.