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Multinational Corporations

Globalization The liberal economic theory Is based on the fact that not all state’s territories include the blessing of various natural resources. Therefore, state economies over the years have established several laws that make economic global trade a rather fair transaction. In its core trading was created to facilitate the gaining of products for territories in which producing a specific good might be limited due to their natural resources from those with comparative or absolute advantage.

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Economic liberalizes believe that governments should not interfere in the markets, because international elate Is maximized when states practice comparative advantage and specialize in certain products. It makes more sense for a country with easier and cheaper ways to produce a specific product do so in abundance and share it through global trade with the world, rather than it be extremely difficult and costly for a single state to do it alone.

Through foreign direct investment, multinational corporations are able to invest in other countries by establishing their own facilities in foreign territories. This is the base of globalization. Through FED and Mans companies are locating closer to customers and Introducing themselves In the same area as competitors, meanwhile they hire local manufacturers and employees to assist the production of their product. By doing so, they not only fuel the international economy by creating a larger amount of production for trade, but they also are creating Jobs for people where they are most needed.

They usually establish foreign facilities and plants in countries where wage is extremely cheap- indicating that these countries are probably home to extremely poor human beings, who would have trouble finding a Job In the first place. Yet they also search to Invest In states that have attractive resources. FED Is good for developing countries because they make their economies stronger. By paying taxes and training personnel, they enrich their host territories economy and development.

Economic liberalizes believe that Mans can serve as a peace keeping potential during trying times between two countries. That interdependence globally would cause powers to be more understanding and hesitant before creating a war. However stating that underdeveloped nations cannot Lully control the Mans because of lack of proper enforcement of human right laws, there is a chance that the workers may be exploited, but through safety and health standards, this situation is usually controlled. I strongly believe that developing states should allow Mans to house facilities in their territories.

It’s clear that for development, you must establish a strong economy, and FED and Mans without a doubt assist lesser-developed countries in reaching development. They create Jobs for those who are uneducated and therefore disqualified from many Job technological advancement of local companies. I do, however, support that specific tariffs and laws should be set against the Mans goods being sold in that state’s market, because local producers could not stand a chance next to mass productions.

Also, the dangers of human rights being violated are possible when establishing an NC in a state with an unrecognized government and must be highly investigated for proper activity. In regards to those issues I believe that as long as the General Agreement on Tariffs and Trade (GAIT) enforce and practice their trade principals the global trade market will be a safe place. The prevarication and liberalizing of trade and foreign direct investment are the best way to go about developing a state.