Free Trade - International Trade International trade is one...

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International Trade International trade is one of the key components that keeps our country moving forward. If one were to look at our economy today without trade, there would be a large absence of certain electronics, foods, technology, and automobiles. Even with our strong participation in international trade, some say our current trading borders are somewhat narrow, and that by widening them we would greatly benefit. Economists estimate that at least 10%-or well over $1.2 trillion-of U.S. annual output is directly attributable to trade opening measures put into effect since the second World War. This could be enhanced by another 50% or more with removal of remaining barriers to global trade (Duesterberg, 2007). Removing these barriers will create a much larger market which can later create jobs for everyone. The bigger the market, the bigger the pie. It is true that increasing trade relations with other countries has many benefits, but the ultimate reason why we should continue to open our borders is because of Thomas Friedman's Dell
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Theory of Conflict Prevention. The Dell Theory of Conflict Prevention is an idea that Friedman addresses in his book The World Is Flat. Friedman states, "No two countries that are both part of a major global supply chain, like Dell's, will ever fight a war against each other as long as they are both part of the same global supply chain" (Friedman, 2006, p. 522). This makes perfect sense. There would be simply too much to risk financially if two countries were to ruin a great money making system over a war. Today in the "flat world", companies from all over work together. An example of this is the computer company Dell. When an order is put in for a Dell computer an amazing chain of events occur. The total supply chain for a normal Dell computer, including suppliers of suppliers, involves about four hundred companies in North America, Europe, and Primarily Asia (p. 516). Places such as Japan, China, Taiwan, Thailand, South Korea, Texas, Brazil, Eldorado do Sul, and even Shanghai work together to create a single Dell computer. With such a complex supply chain, it would be a disaster if just one of these companies were to fail. Each company keeps each-other in business, and Dell is saving lots of money by this process. This is why the Dell Theory of Conflict Prevention makes sense,
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because the countries who are associated with those 400 companies will think twice before throwing the first punch and starting a war. However, before we start to become involved in more global supply chains like Dell's we must continue to push international trade by outsourcing jobs. As time goes on, Americans have slowly moved away from American based factories. Companies such as Gap have taken their large factories overseas where they can offer jobs to jobless people and cut back tremendously on expenses. We can now pay people in India $50 a month to
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This note was uploaded on 03/30/2008 for the course WRTG 101 taught by Professor Lawson during the Spring '07 term at Ithaca College.

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Free Trade - International Trade International trade is one...

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