| Lam3rok | Дата: Воскресенье, 03.11.2013, 21:06 | Сообщение # 1 |
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| CHALLENGES TO THE GLOBAL TRADING SYSTEM: ADJUSTMENT TO GLOBALIZATION IN EUROPE
Krytsyna O.O., student of master degree Scientific adviser: Delini M.M., PH.D., associate professor
Donetsk State University of Management
Donetsk, Ukraine
Research question. The matters of cross-border trade are of crucial importance for the actors at global arena, while it is trade inflows and outflows which primarily comprise the substantial part of the state budget and its balance. For this reason the processes relevant to the issues of international trade and globalization processes are to be monitored, which will provide data on the current state of trade processes, their future trends and thus may contribute to development of preventive measures at global arena. Such measures may stabilize the regional economic balances and thus ensure the stability of regional economy as a whole. As European region is currently on its way from recession processes, the state of the trade might serve as a driving engine for further growth and improvement, or as an indicator of changes needed to be introduced in order to stabilize the situation.
The aim of this research is to outline the existing challenges of global trade within the European region and to track the trend of cross-border trade further development.
Summary of the research results. The opportunities and challenges of international trade have traditionally been regarded as the bone of discord amongst policymakers, academicians, and business practitioners of the contemporary business environment. Far from concentrating on available options of the gains and opportunities from cross-border trade maximization, the countries are also highly concerned with the growing
interconnection between the economies and the rapidly fluctuating trends of economic development. Mentioned above concerns have given rise to the selective approaches towards the countries, granted the access to the national markets. Weighty challenges as they are, added with the ongoing economic and financial deterioration of the global economy threaten the fair competition at the global arena and equality of market opportunities.
As stipulated in WTO report [1], for the past 20 years, globalization has caused increased geographical fragmentation of industries and related business segments, with important restructuring within companies and entire manufacturing sectors, resulting in the relocation of activities. Such structural changes affect greatly the capacities of the countries to cover the entire range of target sectors of economy, which makes them dependent on other members of global community. For many developing countries, toll manufacturing has provided a unique opportunity to insert themselves in the globalized economy and create employment opportunities. However, greater interdependence has also created larger and faster propagation of adverse external shocks, whose role in the present global recession is not yet completely understood.
At the same time, however, international trade in Europe has become a magnet for hidden opposition from a broad spectrum of forces. Some of this opposition is organized under the umbrella of the anti-globalization and financial dependence-elimination movement [2], but much comes from more traditional and more mainstream representatives of business elite with varying interests within the European region. These include manufacturing and agricultural sector producers that have been sheltered thus far from the tariff reduction process, sectors and industries that perceive themselves to have been damaged by internal EU practices. The internal processes in the European region are also non-exclusive for all the neighboring countries. The Competitiveness Council directs the international relations and neighboring policies, the national
representatives adopted several conclusions on customs cooperation with the Union's Eastern neighbors. They invited the European Commission and the member states to cooperate with their Eastern neighbors in the fields of "safe and fluid trade lanes," "risk management and fight against fraud," "custom modernization" and the exploration of "the possible use of available assistance mechanisms for these purposes" [3].
In fact, the 2008–09 financial crisis and the current sovereign debt crisis in the USA (which expands over the other economies, including the EU and Asian giants) have not only highlighted the high level of economic interdependencies existing worldwide, but also the growing challenges in pursuing international collaborative actions to address urgent sustainable development challenges. In a rapidly changing multi-polar world in which economic wealth is progressively shifting towards the East and the South, and in which resource constraints have become increasingly pressing, international cooperation remains in crisis. The rapid rise of emerging countries like China, India or Brazil and the relative decline of traditional economic powers have created new opportunities, as reflected by the unprecedented growth in South–South trade observed over the last decade or so. However, it has also generated new tensions, not least between countries with large trade surpluses and those with growing trade deficits. Such tensions are equally palatable in international negotiations such as the ones dealing with climate change. Currently, the situation is changing in an opposite direction: emerging economies have overstepped the peaking levels of growth ratios and other relevant indices.
So, despite a record-breaking 14.5 percent increase in world merchandise exports [2], the effects of the financial crisis and global recession are still hampering faster economic recovery. Relatively high oil prices combined with persistent unemployment and measures designed to reduce budget deficits have undermined short-term growth prospects.
Conclusions. With the global economy slowing, global trade negotiations currently not making sufficient progress, and the emergence of a risk of increased protectionism, the need to demonstrate the importance of trade and the positive contribution it can make to economic growth and global welfare has never been more pressing. Such circumstances induce large regional groups of countries, including EU, to restrict the globalization and to be more selective in terms of partnership agreements on trade. Furthermore, the risks come from internal groups of interest, who are lobbying the favorable directions of business development and trade development in Europe.
References
1. WTO Public Forum report: global problems, global solutions. [Electronic resource] // Mode of access: http://www.wto.org/english/res_e/booksp_e/public_forum09_e.pdf.
2. Grant D. Aldonas. Rethinking the global trading system. [Electronic resource] // Mode of access: http://csis.org/files....eb.pdf.
3. Risk management by priotirizing eastern Neighborhood. [Electronic resource] // Mode of access: http://www.europolitics.info/sectori....4.html.
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