How can globalisation processes help alleviate poverty Essay

How can globalisation processes help alleviate poverty - Essay Example It was noted that prior to the two agreements most country’s trade has been stifled by unfair tariff and trade restriction imposed by countries due to their adherence to their contractual obligation to the first countries they have been trading with at the onset. WTO and GATT mandate that all signatory countries adhere to the Most Favoured Nation principle, wherein what is conferred to one country as a trade incentive should similarly be given to another country (United Nations Conference on Trade and Development, 2004). This in itself levelled the playing field for all nations big or small in terms of international trade. Globalisation processes not only includes tangible items for trade it can also be in the form of service. Outsourcing of processes is normally conducted by companies in order for them to save on operation cost. To illustrate: It does not make sense for an organization to maintain its own telephone based customer care department manned twenty four seven since the demand or volume is unpredictable over the course of a twenty four hour day. The same is true for organization that requires the services of telephone based campaigners. I. Historical Background Global trade is not a new concept as chronicles of early trade relations between nations occurred in the first century when the Romans bartered riches for spices with the Indians. Similar exchange transpired in West Asia trading silk for spices. Barter was the medium of transaction between nations until the middle ages when the first paper money was developed by the Sung Dynasty as the legal tender to gain access to market rights and trading privileges. Accordingly, the first recorded trading company, The Dutch East India Trading Company, was then established in 1602 until its demise in 1799 due to bankruptcy (Maps of World , 1999). The importance of trade between nations was well received even by Napoleon III where an initiative known as the Free Trade Agreement (FTA) was executed betw een France and Britain which ended in 1860. On the other side of the globe in1868, Japanese Meiji Restoration introduced industrial development through free trade. As trade expanded between industrial nations, its leaders in 1946 institutionalized standards to govern commercial and financial relations known as the Bretton Woods System which was peddled to promote lasting peace between independent states as well as to avert financial crisis from happening (Maps of World, 1999). Global trading strengthened further in 1949 when a multilateral agreement between nations known as the General Agreement on Tariffs and Trade (GATT) was founded by twenty three countries. This has set forth trade regulations and standards such as reduction of tariffs and other trade barriers was concurred in by more than one hundred (100) countries. The role of the GATT as an international organization was bolstered when negotiations for the creation of an International Trade Organization (ITO) failed to mater ialize (Bossche, 2005). Thus, GATT continued to discharge its functions by conducting rounds of discussion which included, among others, reduction of tariff and trade barriers; and liberalization of trade affecting wider range of fields such as services, capital, intellectual property, textiles and agriculture. The