Understanding World Trade

Even the smallest economic factor can scarcely escape the effects of global commerce today. For example, a local tomato farmer may be competing with foreign imports directly, exporting her produce abroad, or simply selling her tomatoes in a domestic market where the

prevailing price is determined in part by the availability of competing foreign products. And it is not simply commercial activity that has an international flavor. Laws enacted in one country to protect the environment, labor standards, and competitive markets invariably affect citizens or governments of other countries. For example, the United States may impose a ban on the importation of tuna caught in certain nets that may harm dolphins. This ban affects Mexico’s ability to export some tuna to the United States unless it changes its tuna fishing practices, and thus may effectively impose, through the mechanism of trade, a U.S. environ- mental standard on Mexico. In a globalized world, no action is purely local, a fact that is at the heart of the globalization debate.

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