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Essay / Essay on Globalization and Free Trade - 1508
In this chapter, an exploration will be made of the zones of influence in international trade according to their capacity to advance developing countries. The literature and sources explored aim to uncover their strengths and weaknesses, anchoring the research in a well-developed context while revealing areas that will inform further research and analysis.2.1 Globalization and Free Trade Globalization has the potential to relieve those trapped in poverty, and it is commonly agreed that it should aim to ensure pervasive prosperity and economic development alongside sustainability and cultural diversity (Tiemstra, 2007). Globalization is seen as a shift in economic activity towards greater international integration and interdependence, which many perceive as inevitable and irreversible (Panić, 2011). Adam Smith was a pioneering 18th-century British economist who made a strong case for free trade as a macroeconomics. -economic approach to increase the wealth of nations (Stone, 1992). His description of free trade includes improving the living standards of communities as a whole through increasing market size and lowering prices. The main arguments put forward by Smith, as explained by Stone (1992), bear a striking resemblance to the ideas of modern economists; Bhagwati (2007) asserts that scientific observation and evidence shows that globalization is a tool for poverty reduction and, more importantly, specifically indicates that free trade is the crucial element. His book contains many anecdotal examples of how trade has been used as a strategy to stimulate growth and increase wealth in various economies around the world. Bhagwati (2007) also mentions however that economic growth does not always actually lead to aid.... ... middle of paper ...... what it is about needs to evolve towards that of Küpers (2011) , where responsibility is reduced to its basic meaning of “capacity to respond”. It is therefore suggested that companies that have the capacity to meet the needs of developing economies are in a position of responsibility. The fair trade movement is widely considered to be an extremely important CSR endeavor (Jones and Shaw, 2006), but this is distinct from CSR adopted by individual companies in that the fair trade movement unites around standards rigid that are not regulated by the first part, as are many alternative CSR initiatives (Reed, 2009). If greater accountability is needed to make CSR effective in promoting justice, including enabling development across their supply chains, then third party involvement may be necessary (Macdonald, 2010).