Free trade has allowed the breaking of trade tariffs and barriers across the globe as more and more economies engage in international trade. Alan Blinder presented his side of the story in a Wall Street…
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The problem with this type of outsourcing is that it can critically harm the domestic labor market. Ease of service outsourcing has made millions of domestic jobs vulnerable to being outsourced overseas (Wessel & Davis, 2007). The local labor market is likely to suffer shortage in labor supply as labor demand exacerbates. This scenario would likely trigger economic chaos in the affected economy. On the other hand, countries where most services are outsourced to would experience an influx, similarly causing economic imbalances in labor demand and supply. This type of outsourcing has its benefits too. The process keeps globalization running, thereby enhancing global interdependence in trade. Outsourcing along this line also creates opportunities for poor economic performers when they interact with tiger economies.
To enhance competition along free trade and communication technology aspects, outsourcing practices should be subject to globally agreed upon regulation procedures. The flow of outsourced services should be controlled by taking into account the economic potential of all economies involved. This would ensure that the magnitude of outsourced services matches the economic potential of the destination country. All variables of free trade would also have to be factored in in enhancing
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industry1. This law had never been enacted by any politician until President Obama decided to enact the law to protect the U.S. tire industry from cheap Chinese tire imports. The U.S. tire industry was losing thousands of jobs each year, thus they filed a complaint in 2009 to enact the inactive law.
The article talks of the pitfalls of intervention and protection in a market such as the one which exists in a globalized world. The essay also looks at the problems that the American economy could face as a result of adopting a policy of protection to American companies.
Dave opines that quota increases the price of the product for the consumers. Therefore, in a way, it is just like a tariff. Tariffs make the imports costlier for consumer to spend more. Dave asserts that quota decreases supply and due to that price of the product goes up.
In order to achieve its objectives of enhanced global commerce and competition through trade liberalization the WTO must help improve the political atmosphere for further liberalization. Governments should be engaging in less promise of job increases as a result of trade liberalization but should inform the public about the lasting increase in the global standard of living.
Also, the WTO and its members made significant commitments and exemptions regarding the service sector during the Uruguay round of talks. The most notable discussion on services involved financial services, telecommunications, as well as immigration to provide services.
The author states that Obama’s administration has complained to WTO regarding the anti –dumping and anti – subsidy of China has violated up to 22% the free trade rules. According to the article, it was not only United States but even the