CHAPTER 35 – INTERNATIONAL TRADE AND GLOBALISATION
When a global business sets up an office or a manufacturing plant in a country, it brings with it both benefits and drawbacks for that country.
Benefits of Global Business
• Global businesses create direct and indirect employment wherever they locate. This can lead to an increase in the standard of living for the local population.
• Global businesses pay taxes in the countries in which they operate.
• Products that were previously imported by a country are made locally. This is known as import substitution. Import substitution has a positive effect on a country’s balance of trade.
• International tastes, culture and influences are introduced to the country. Import substitution replaces imports with local production.
i Drawbacks of Global Business
• Global businesses have no long-standing ties to the local population. They often relocate, leaving unemployment and social problems behind. For example, in 2015 audio equipment maker Bose closed its factory in Monaghan and transferred operations to Malaysia and Mexico. This cost Monaghan 140 jobs.
• The production and transport of products contributes to CO2 emissions, which harms the environment.
• A downturn in the company’s business in one part of the globe will have an impact on the other countries in which it operates.
Global business in Ireland In pairs, research a global business operating in Ireland.
• How long has it operated here? • What does it produce? • How many employees does it have?
Present your findings to the class. A Global trade debate
Stage a class debate: This house believes that global trade should be banned. Record the outcome of the debate on page 232 of your Activities and Accounts Book.