Question

Give two problems of international trade benefits of globalization

Answer 1

Globalization has brought about significant benefits and challenges to international trade. Here are two key problems related to the benefits of globalization in international trade:

1. **Income Inequality**: While globalization can lead to economic growth and increased trade opportunities, it often exacerbates income inequality both within and between countries. Wealth tends to concentrate among those who are more skilled or have capital to invest, while low-skilled workers may face job losses or wage stagnation due to competition from foreign labor. This disparity can lead to social and political tensions, as those left behind may feel disenfranchised or alienated from the benefits of globalization.

2. **Environmental Concerns**: Increased trade driven by globalization can lead to environmental degradation. The rise in production and transportation can result in high levels of pollution, overexploitation of natural resources, and greater carbon emissions. Countries may engage in a "race to the bottom" by lowering environmental regulations to attract foreign investment, which can further harm ecosystems and contribute to climate change. The challenge lies in balancing economic growth with the need for sustainable practices in international trade.

These problems illustrate that while globalization can foster economic development and create new markets, it also requires careful management and policy considerations to ensure that the benefits are shared equitably and sustainably.