ng domestic economies to global competition? Use examples to support your argument.The growth of international trade and investments across the world is referring to economic globalisation, which is the cross-border trade in goods and services. In other words, imports, exports within free markets and companies that have many branches on foreign countries have shaped this term. In addition, many companies moved to the other side of the world seeking for a better atmosphere for their business. In this enormous interaction between the individuals, governments and economies of different homelands, many governments believe that economic globalisation is real and cannot be avoided even if it has a strong economy. This essay will point out why many governments believe there was no alternative to open its domestic economies to global competition by illustrating three major free trading areas.
First and foremost, the North American Free Trade Agreement (NAFTA), which represents three countries, Canada, Mexico and United States. This agreement reduced the obstacles between these countries by free market and this improved its business and trades. As a consequence, NAFTA’s agreement has remarkable benefits on the economies of the three members. To exemplify, after joined NAFTA, Mexico has become the second-largest marketplace for NAFTA-producing goods and services, and that led to a raise its exports in the United States to about sixteen percent. Another example, the U.S. sales on Mexico have doubled in three-year period. Likewise, Canadian investment in Mexico has quadrupled in 1998; they are investing in banking, mining and communications.
Second, the European Union (EU) has expanded, in 1995, to fifteen members without any frontiers, and the removal of all the domestic barriers has opened its markets and allowed them to trade and invests in a more efficient and competitive way. For that reason, According to (de Percy 2009), the significant change on EU’s policies led them to be the biggest marketplace in the world. They became a high-income market for many advanced products and services. Furthermore, This Union committed by encouraging economic prosperity and creating new jobs to make its companies more competitive and to improve workers with new skills. For example, Boeing, one of the largest U.S. exporters, use engines made by Rolls-Royce. Otis Elevator, one of the worldwide industry leaders, has subsidiaries in Germany, French and Spain. Presently, EU has twenty seven member countries.
Finally, the Association of Southeast Asian Nations (ASEAN), which represent ten members, Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei, Lao PDR, Myanmar, Cambodia and Vietnam working together to diminish barriers. In 1992, ASEAN has a commitment to increase economic collaboration between its members and created the ASEAN Free Trade Area (AFTA). ASEAN aimed to develop the region into a global base by the commercial and investment relationships among its members. However, at the beginning ASEAN faced some difficulties, especially as its neighbour China is becoming a major world center of the low cost production of goods. In the meantime, ASEAN has a series of free trade agreements such as China, Australia, India and United States in process. As a result, ASEAN has a significant growth in its economies, more skilled workers and new job opportunities.
All in all, these major free trading areas make a clear vision for many governments that looking forward to improving and rise up its economies, so they can afford a high level of living standards, variety of products and services at lower prices, improve workers' skills, create more jobs and increase wages, and offer better working conditions. Therefore, many governments that have opened its domestic economies to global competition believe that was the only possible way and logical choice.
Reference list:
De Percy, M. (2009) Introducing Government Business Relations : History Theory And Cases. Frenchs Forest: Pearson Education Australia.
Gate way to the European Union. Retrieved September 18, 2010, from http://europa.eu/index_en.htm
The Association of Southeast Asian Nations. Retrieved September 19, 2010, from http://www.aseansec.org/index2008.html
The NAFTA Secretariat. Retrieved September 18, 2010, from http://www.nafta-sec-alena.org/en/view.aspx
The NAFTA’s Impact, Trade Results. Retrieved September 18, 2010, from http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/nafta-alena/nafta5_section04.aspx?lang=en
Yentaku, M (2010, September 20). ASEAN has come of age as a market and producer. The Japan Times Online. Retrieved from http://www.japantimes.co.jp
