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Globalisation and Trade

Globalisation describes the way in which people, goods, money and ideas are able to move around the world faster and cheaper than ever before. This is mostly due to better transport and technology and the fact that countries are more open to trading with one another. The accelerating pace of globalisation is having a profound effect on life in rich and poor countries alike. It is more important than ever to recognise the value and interdependence of people all over the world.

In Ireland there has been an enormous growth in the size of the economy over the last decade. Jobs have been created and the tide of emigration has been reversed. A trip to the local supermarket in Cork, Dublin, Belfast, Ennis or Athlone reveals a world of products. Young people have embraced new technology, such as the Internet and mobile phones, and use their increased spending power to buy global brands. But Ireland also has one of the highest levels of income inequality in the European Union. "Better-off households are gaining more from the boom than those that are less well off. The growing gap between rich and poor is damaging to society in a number of ways. It is linked to higher levels of relative poverty, it is unfair, it leads to poor social cohesion, alienation and it limits choice, diversity and the ability of those on low incomes to participate in society" (Combat Poverty Agency, 2000).

Around the world too, the gap between rich and poor is widening. The number of people living on less than $1 per day will grow by more than one-third by 2015. The richest 10% of households in the world have as much yearly income as the bottom 90%. The rich are concentrated in the US, Europe and Japan, with the richest 1% alone owning 40% of the world's wealth. Poverty, on the other hand, is widespread across the developing countries - which have five-sixths of the world's population.

In economic terms, globalisation refers to the growing economic integration of the world, as trade, investment and money increasingly cross international borders. Trade has largely been the engine of economic globalisation, with world trade in manufactured goods increasing more than 100 times (from $95bn to $12 trillion) in the 50 years since 1955, much faster than the overall growth of the world economy. The world's economies have developed ever-closer links since 1950, in trade, investment and production. Since 1960, increased trade has been made easier by international agreements to lower tariff and non-tariff barriers on the export of manufactured goods, especially to rich countries.

Since the Second World War, more and more of the global production has been carried out by big multinational companies who operate across borders. Multinationals have become increasingly global, locating manufacturing plants overseas in order to capitalise on cheaper labour costs or to be closer to their markets. Companies have become more powerful than many nation states. While they bring much needed foreign investment to developing countries, these companies often put profits before the rights of workers or the countries in which they are located. Supermarkets in developed countries have set up global supply chains that ensure cheap produce from all over the world. But the people who grow the produce are dependent on the prices they get, which in most cases has fallen significantly over the last few decades. This erodes their ability to provide a basic standard of living for their families.The problem is not that international trade is inherently opposed to the needs and interests of the poor, but that the rules that govern it are fixed in favour of rich countries. For poor people to benefit from global trade, the rules need to be reformed so that they guarantee fair access for poor people to national and international markets.

Related Activities

Activities related to Globalisation and Trade

What can you do?

• Lobby your youth organisation, or school canteen, to stock fair trade products. Fairtrade ensures that Third World Producers get a fair deal for their produce, and you get the quality and taste you deserve.

• Write to Kraft (Maxwell House) and Nestle (Nescafe) and demand they ‘pay a fair price’ to coffee producers. Peter Brabeck-Letmathe CEO C/o Nestle (Ireland), 3030 Lake Drive, Citywest Business Campus, Dublin 24.

• Lobby your MEP to stop unfair EU trade rules. Write to your MEP(s) today asking that they:
- call for an end to aggressive negotiating by the commission
- take part in a full debate in the European parliament
- vote against the EC’s proposals if the deals are not revised to address the concerns of poor countries.

Dates for your Diary

  • 2nd Saturday of May - World Fair Trade Day
  • 16th October - World Food Day
  • 17th October - International Day for the Eradication of Poverty
  • 10th December - Human Rights Day