Globalization and Free Trade

In the actual free trade context in the globalized nation, it is referring to a freedom for businesses to trade between countries at no barrier from government intervention which includes imposing tax on the products and services, subsidies, import and export quota limitation, as well as imposing trade legislation. However, this cannot be realized in today’s world (White, 2008) due to the fact that each country needs to protect and balance between the three major aspects which is the social, economy and politic domestically in order to compete in the competitive world and at the same time contribute to peace of the world. This is especially true for the developing countries such as Malaysia, China, India and et cetera as compared to the developed countries like United States of America and United Kingdom which are rich in nation. Throughout this essay, we will look at how free trade and globalization affects the developing countries from many angles not restricted to the education, cultural, standard of living, and threat to government. When globalization and free trade converge, many businesses have moved their production and operation from their country to another country that able to offer cost efficiency in terms of labor cost and raw material cost, and also to take advantage of the loose trade regulation. If there is no government intervention towards the phenomenon, the domestic small businesses are not going to be able to compete with the foreign business that came into the developing countries having to say that the advancement of technology and knowledge of the foreign business players are better. Large multinational corporations are seen to buy over the smaller domestic businesses to achieve economies of scale where the same products and services can be marketed to the global market. Nevertheless, this process has concentrates the wealth in a fewer large corporations.

As fewer large corporations dominate the business in a country, it indirectly