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Global Business Environment

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In a committee meeting of the United Nations you are considering the following questions:

1.When is international trade an opportunity for workers? When is it a threat to workers?
2.What are some of the major challenges confronting the international trading system?

According to Ricardian trade theory, nations are better off when trade barriers are removed; each nation specializes in the area where they have a comparative advantage, and they trade. What does that imply for a country's workers? What does this imply for workers in the industrialized countries? What does this imply for workers in developing countries? Does it matter in which industry they work?
This assignment points out that there are gainers and losers to this approach. American workers in heavy industry have certainly felt changes. There must be some areas where the United States would have a comparative advantage -- and one would expect workers in those industries to do well. ie, how would workers in high-tech industries fare? What industries should the US specialize in? What about workers in the countries from which we import goods? When will they benefit? When will they lose?

The response addresses the queries posted in 1216 words with six references.

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The response addresses the queries posted in 1216 words with references.

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The response addresses the queries posted in 1216 words with references.

// Nations perform better when trade barriers are removed and each nation specializes in the area where it has a comparative advantage. This paper will help in understanding how international trade brings about opportunities and threats to the workers and the major challenges confronting the international trading system along with some other related topics//

International trade has always been viewed and considered as having an effect on the broader context of the national economies and the world economy as a whole, but there is less focus on the effect of globalization on the workers, who actually make the things come to life when a company wants to turn global. The internationalization of trade does have some positive and negative effects on the workers and brings about some opportunities as well as threats (Crain & Lee, 2005). The following are some arguments that help in understanding, when does international trade becomes opportunity and when does threat for the workers.

Comparative advantage is one of the most essential concepts while looking at the opportunities raised by globalization. A country possesses comparative advantage when it is able to produce a product in comparatively lesser cost than other countries producing the same product. If a layman thinks over the matter, he/she will say that international trade leads to reducing of the job opportunities in a country, because the companies hire the workers from outside, who are ready to work on lower wages. But the fact is completely contrary that international trade directs the workers in a country for the jobs where they can have a comparative advantage, as the domestic jobs are eliminated in order to have cheap labor from abroad. We can release and divert the workforce for producing more valuable product that they can make more cheaply as a result of their comparative advantage. Therefore, the result of international trade is that the domestic workers are paid high because of the simple fact that greater productivity leads to higher pay (Crain & Lee, 2005).

Now, looking at the threats of international trade, it can be ...

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  • MBA (IP), International Center for Internationa Business
  • BBA, University of Rajasthan
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