International trade and globalization are intertwined because international trade is a consequence of globalization. Globalization refers to the increasingly borderless trade that occurs between countries and territories. This type of trade is facilitated by the removal or reduction of restrictions in the form of tariffs and other things like import quotas. Globalization serves to harness the possibilities and opportunities available through the cooperation of different nations.
One relationship between international trade and globalization is the fact that the ease of transportation across international borders facilitated by globalization makes it easier to trade internationally. For instance, globalization has made it easy for people to travel form one part of the world to the other in pursuit of business leads and in order to sell or purchase goods and services. A businessman in China might need to meet with someone in Argentina in order to inspect some goods, sign a contract, and make arrangements for the shipment of goods from Argentina to China. Thanks to globalization, all of this can be done in a matter of days.
Another relationship between globalization and international trade can be seen from the ease of communication across borders. International communication is much easier now thanks to the improvement in technology and the influence of globalization. The ease of communication facilitates international trade by making it much easier for business people to communicate with each other through the use of communication tools like the Internet, phones and letters. As such, a company in Australia can fax an order to a company in Japan for a number of photocopying machines for its corporate headquarters. They could also communicate through emails, by phone, or by sending letters through courier mail.
Globalization has led to the increasing integration of cultures in which other countries openly embrace some aspects from the cultures of other countries. This provides opportunities for other companies in different countries by opening up new markets that would not have been possible without the effects of globalization. For instance, a company in the United States might open outlets of its fast food chain in Asia as aspects of the fast food culture become more accepted in that part of the world. This is a link between international trade and globalization.
Another example of international trade and globalization can be seen in the effect of outsourcing. Outsourcing occurs when a business recruits employees from other countries to work for them. This may be due to a number of reasons, including the desire by the company to take advantage of cheaper international wages that may be less than half of the minimum wage in their countries. The same concept applies to building manufacturing plants in countries with cheap labor as they save money and increase profit margins by using paying workers less. This, however, may lead to cheaper products.
