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Union Workers

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Submitted By ayeshaalazri
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Globalization may be defined as the integration of the world's people, firms and government. In the modern context, globalization is usually the result of closer ties in international trade, known as bilateral trade agreements. The WTO and NAFTA are two examples of such bilateral trade agreements. With such agreements, cross-country investment increases. This increase in investment is aided by the increase in information technology and communications, which has undergone a significant advancement over the last two decades with the rise of the Internet and mobile telephony.
Expanded Markets
From the business perspective, one effect of globalization is that of expanded markets. This means that a business that had previously only sold its goods domestically can start selling products to other countries. One example of expanded markets includes the auto industry. Before the fall of the Berlin Wall, those living in countries under the influence of communism only had access to cars that were produced domestically or in other communist markets. This was due to trade barriers with the West. When communism fell, Western economies, that is, countries that were not under communist influence, were able to expand their markets to former communist countries. This in turn increased their profit potential.
Related Reading: How to Prepare Your Company for Globalization
Cheaper Resources
Another consequence of bilateral trade agreements is the access to cheaper resources. Until the start of the 1990's, the People's Republic of China was largely closed off to the rest of the world. Many companies in the United States produced their goods either domestically or in areas with slightly less expensive labor. When China opened its market to the rest of the world, however, American companies were able to take advantage of the far cheaper labor. This is known as outsourcing. Cheaper

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