Globalization and Boundless Market Essay Example | Topics and Well Written Essays - 750 words

Globalization and Boundless Market - Essay Example It is the productivity of every nations combined. Information on world's outputs is based on economic data obtained from different countries through international regulatory institutions like the International Monetary Fund, who is involved in the monitoring of economic and financial developments (IMF, 2008) and the World Trade Organization, who oversees nearly 150 countries and 97% of world trade (WTO, n.d.). The indices can be represented by the regular economic parameters such as Gross Domestic Product or Gross World Product (GWP), per capita production, employment rate, and others. World production is greatly affected by trading. Without trading a nation would not strive to produce more of its products where it has comparative advantage. Without the demand from other countries, every nation only produces goods enough for the domestic need. Oil producing countries, for instance, strive to generate greater productivity because of world demands for oil. Food and other agricultural supplies are needed by countries who cannot produce them due to climatic conditions. Other countries provide surplus of labor and expertise. Because of this, world trade is an essential component for increase in world's production. In fact volumes of world trading is a good indicator of the soundness of the world's economy. When world trading is low the world economy is generally down. General pattern of international trade International trade, which forms the bloodstream of the world economy, represents the flow of goods and services from one nation to the other. There are several patterns suggested in terms of trading or import-export arrangements. One of the patterns is that, the nation who lacks the capability to produce a good needed by its constituents buy it from another nation who produce or specialize its production due to comparative advantage such as lower production cost or availability of raw materials. Likewise, the nation that has surplus of a particular product can supply it to others in need. Dean (2004, 312) referred this arrangement as inter-industry specialization. Another pattern referred by the same author describes the intra-industry specialization (313). Two nations who specialize the same industry trade their products. As an example, the US and Japan both manufacture cars but they both trade their respective cars models. Import and exports, however, have their controls and limitations based on regulations and standards. Different countries have their own product quality indices, trade taxes, and other barriers. Attempts however were made to unify regulations and eliminate barriers to world trade. These resulted to the forming of the World Trade Organization. With the molding of the WTO the world embark in a global exchange of goods and services from agricultural to high-end industrial outputs with limited restrictions. As part of its advocacy the World Trade Organization claimed, "It is the only international organization dealing with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible." The Consequence of no-trading Trade sanctions sometimes happen in the world scenario. It occurred many times in the history as a consequence of disciplinary actions against a hostile