Globalisation of Trade

• Globalisation

  The process of interaction and integration among individuals, organisations, businesses and governments worldwide
• Globalisation

  • Countries coming together to create one global economy, making international trade easier
  • National companies can develop into multinational companies (MNCs) or transnational companies (TNCs) with subsidiaries all over the world
  • Expansion of international markets can allow the free movement of goods, services, labour and capital, resulting in a very large, single world global market
• Benefits of globalisation

  • Multinational companies can create jobs directly and indirectly
  • Multinational companies pay a fair wage and improve the standard of living in the area where they locate
  • More people employed, more income tax will be paid
  • Multinational companies will have to pay taxes in the country they locate in (corporation tax)
  • Multinational companies locating in less developed countries can have a positive effect on their economic development and the condition of human rights
• Challenges of globalisation


  • Multinational companies have no loyalty to a country and can close and move if the economy or the company is not doing well
  • Critics believe multinational companies have too much power and influence over governments and decision-makers in a country
  • The production and transport of products can lead to increased CO2 emissions
  • Multinational companies may have to alter products/services for different markets globally
• Containerisation

  A system that uses standard-sized containers to transport goods, allowing them to be loaded and unloaded between ships, trains and trucks using mechanical equipment without needing to be opened or stored in expensive warehouses, reducing the cost of transportation and helping globalisation
• Ireland is considered to be a small open globalised economy
• Reasons Ireland attracts multinational companies

  • Low corporation tax
  • Located between America and Europe, with the added bonus of being an EU member
  • English-speaking workforce, with English being the language of business used globally
  • Home to internationally recognised universities, making its workforce very well educated
• National trade

  Exchange of goods and services within a country
• International trade


  Exchange of goods and services between people in other countries, consisting of exporting and importing
• Positive impacts of importing

  • Obtaining raw materials not available in the country
  • Importing products suited to a different climate
  • Importing products not produced domestically, increasing variety
  • Allowing Irish people to travel and explore the world
  • Easy to buy goods online and import from other countries
• Positive impacts of exporting

  • Increased production to service a larger market creates employment and reduces social welfare expenditure
  • Increased business profits lead to higher tax payable to the government
  • Spreading risk by not depending on one domestic market
  • Accessing larger international markets
• Challenges of imports and exports

  • High financial and environmental cost of transporting products globally, causing emissions and pollution
  • Small Irish firms struggling to compete with large companies benefiting from economies of scale
  • Concerns over workers' rights and conditions in low-wage or developing economies producing goods
  • Safety standards on imported products may not be as high as within the EU
  • Barriers to trade like quotas, tariffs, embargos, subsidies and trading blocs making trade more expensive or impossible