Barriers To Trade

Globalization has three major components:a. Barriers to trade—rules that limit trade with another countryb. Tariffs—trade allowed but fee must be paid to importing government. Discourages purchase and protects local productionc. Immigration—rules about importing workers. Limit protects local workers but if skills needed can be harmful to economy.3. When David Ricardo first postulated Comparative Advantage theory, the resources needed to produce goods were not easily moved across international borders let alone overseas. Those resources include land, labor, entrepreneurship and capital. Is comparative advantage undermined when these factors of production can relocate with relative ease? Add technology to these basic factors and yes, they are quite moveable.4. Thomas Friedman’s GREAT BOOK—The World is Flat—describes our era as Globalization 3.0 (1.0 was 1492-1800—explorers and trade) (2.0 was 1800-2000 (I would make it more like the mid 1800)—multi-nationals and transportation improvements and telecommunications began to shrink the world.5. He says that 10 factors led us into Globalization 3.0a. Berlin Wall coming down in 1989b. Netscape—the first public internet browser in 1995c. Workflow software in the late 90s—common web-based standards (e.g. Windows)d. Open source software that allowed computer fanatics to access and improve programs and websites.e. Outsourcing—India for the most part—moving back office jobs—not physical plantsf. Off-shoring—that’s China and actual movement of manufacturing facilitiesg. Supply chaining—inventory control that reduces need to stockpile producth. Insourcing—UPS handling orders and deliveries for smaller operations.i. In-forming—Google, Yahoo, etc.j. “Steroids”—wireless devices that all accessing internet anywhere

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