Handbooks of Research on International Political Economy series
Edited by David Deese
Over the course of the last century, trade brought great changes to every corner of the globe, increasing the internationalization of production, distribution and marketing of goods and services as well as promoting economic integration. Like other economic transactions, trade enables parties to gain through exchange with more choices, better quality, lower prices and more competition. Over time, trade has become an increasingly important source of economic growth for many countries. Some argue that, as a nation expands its trading networks, more opportunities, better jobs and economic growth are created at home (Zoellick 2002). For instance, exports accounted for about 25 percent of US economic growth over the course of the 1990s and supported an estimated 12 million jobs (Drezner 2005). By lowering prices through imports and increasing incomes, regional trade agreements (RTAs), such as NAFTA, and multilateral trade frameworks, such as the Uruguay Round agreements, have benefited the average American family of four by $1300 to $2000 each year (Langerfels and Nieberling 2005). In addition to local and individual effects, trade serves as a global economic health indicator. Many also define globalization simply as openness to foreign trade and long-term capital flows (Bardhan 2004). Thus, the prospects of increased trade opportunities strengthen foreign direct investment and confidence in financial markets, priming the global economy.
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