Globalization Cons

Under what conditions would a company decide against going global?

A company may decide against going global for the following reasons:

Many governments and free trade institutions exist for the good of transnational (or multinational) corporations (e.g. Microsoft, Monsanto, etc.). They allow multinationals to move freely across borders, extracting desired natural resources, utilizing a diversity of human resources, while doing permanent damage to the natural capital and diversity of nations, imposing a kind of global monoculture, and enforcing the position of the industrialized nations.

Globalization is simply exploitive: it increases joblessness, inequality and poverty in developing countries by reducing work forces, destroying small farms and businesses, and raising the cost of food, fuel, healthcare and education, it lowers wages and degrades working conditions, via cut-throat competition for foreign investment; it undermines democracy and public health and safety by allowing international trade laws and unelected "dispute settlement committees" to invalidate national and local legislation; it leads to environmental degradation and the destruction of natural resources, as countries plunder their soils, forests, fisheries and minerals in order to earn export income, and magnifies the power of global finance and trans-national corporations at the expense of ordinary people.

"As with NAFTA, the United States Trade Representative (USTR) proposals for the FTAA would result in greater rights for investors, without establishing any corresponding responsibilities. The USTR's position is that investors should have the right to move funds into and out of countries without delay - meaning that provisions such as capital controls or performance requirements to ensure that investments serve to promote development goals would be illegal under an FTAA." (Hansen-Kuhn)

Further proof of exploitation can be seen when examining the problems with the free trade of the Americas Agreement (FTAA). The U.S. government is promoting an approach to the FTAA based in large part on NAFTA, despite the failure of that accord to raise living standards.

More than 335,000 Americans have been certified as having lost their jobs because of NAFTA, and most of the jobs created there have been in the low-wage service sector, and many have been temporary. Also significant has been the increase in the blackmail effect: Cornell University researcher Kate Bronfenbrenner found that the incidence of employers using the threat of moving production out of the U.S. in order to undermine union organizing efforts has increased dramatically since NAFTA’s inception.

a. Why would a country voluntarily restrict exports of certain products?

Restricted export of certain products by countries is usually due to barriers to trade:

Non-tariff barriers

Since tariffs as a mean of protection has lost much on importance, non-tariff barriers gain more on importance for developed countries. The following is not a complete list.

a. Quantitative restrictions or quota

Protection is not eliminated,