Trade and Globalization

Introduction

The tremendous growth of international trade over the past several decades has been both a primary cause and effect of globalization. The volume of world trade since 1950 has increased by twenty-fold from $320 billion to $6.8 trillion. This increase in the trade of manufactured goods exceeds the increase in the rate of the production of these goods by three times. As a result, consumers around the world now enjoy a broader selection of products than ever before. And a whole host of U.S. government agencies and international institutions have been established to help manage the ever-growing flow of trade.

Although increased international trade has spurred tremendous economic growth across the globe —- raising incomes, creating jobs, reducing prices, and increasing workers’ earning power — trade can also bring about certain kinds of economic, political, and social disruption.

The following Issue Brief is designed to help you understand some of the fundamental economic principles behind international trade, familiarize you with some of the technical terms, and offer some insights into some of the controversies surrounding international trade policy both in the United States and abroad.