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International Trade Opportunities for Workers

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

When is international trade an opportunity for workers? When is it a threat to workers?

What are some of the major challenges confronting the international trading system?

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Opportunity

According to the theory of comparative advantage, if each country specializes in the production and trade of those goods in which it has a comparative advantage, total output and total welfare increases for the world as a whole. International trade also increases competition and competitiveness of domestic producers. Thus it brings more jobs to the nation and there by increasing employment opportunities and also salary hikes to the workers.

Threat

Export of jobs is becoming a threat to the workers of the developed countries as this has led to the shift of the jobs from developed countries to developing countries. For example shifting manufacturing from USA to China as Chinese labour are cheap. Already a significant share of manufactured goods is sourced in China; and similarly, there is a significant market for Outsourced software and other services from India. Major automation suppliers like Honeywell, Invensys, Emerson, Rockwell and General Electric are transferring software development to India and manufacturing to China.
(Business today)

Thus outsourcing has led to the unemployment and job losses. US Companies instead of valuing their employees the term "downsizing" is given to long standing employees with their pink slips. This is giving bad indication and there is job insecurity in the minds of working class. American workers are now faced with a lack ...

Solution Summary

The solution discusses international trade and how it may or may not threaten workers.

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