Ethics In International Trade

ETHICS IN INTERNATIONAL TRADE

As the world changes every day by bringing people closer and more interconnected; the international trade does its part in the creation of a highly integrated global marketplace in which the companies strive to remain competitive by promoting the free flow of commerce. The trade liberalization has allowed the interaction of companies and nations in such a way thatwasn’t even thought a couple centuries ago when the mercantilism governed the international relations.
Today, there is enough evidence to support the ideas of economic theorists such as Smith, Ricardo, Heckscher and Ohlin or even Porter regarding to the benefits of the liberalization of international trade, since it has been shown that countries which enthusiastically participate in cross-borderbusiness gain more in terms of economic development than those which simply adopt protectionist policies to avoid foreign competition. In the other hand it is also true that in some cases the price to pay for this liberalization is representative in terms of business ethics and the conservation of the environment. In this order of ideas, the real concern in the international trade arena shouldnot focus in discussing whether the trade among countries is beneficial o not for economic growth but in seeking viable solutions to mitigate the negative impacts that current ways of trading have over the countries, their resources and their inhabitants.
Developing specialized and greatly efficient productive apparatuses had never been that important as today for companies to conquer leadingpositions in their industries and in the world of business. First of all, because of the fierce competition that organizations have to face nowadays as a result of the boom of the contemporary theories of international trade and the globalization and widening of markets throughout the globe.
According to Adam Smith, the wealth of nations depends on the specialization. He suggests that theorganizations in each nation should specialize in producing those things that they can do at the lowest cost; it is to say, in those products in which the country has an absolute advantage, not only to become more efficient and productive, so the world´s production can go up, but also to exchange this goods with other countries at a lower price to benefit the final consumers with more variety and economy.This point of view was reinforced later by David Ricardo who also noted that despite the fact that a nation (A) may have absolute advantage in more than one product; nation (B) could still negotiate with (A) and get mutual benefits due to what he called the comparative advantage, which is defined as the relative advantage in production efficiency that a nation has internally over another.
Based onthese two concepts mentioned above, more recent authors have developed complimentary theories that increasingly have come closer to explain the reality of international trade in all its dimensions and complexities. Most of these renewed points of view such as the HO theory, the product life cycle theory, the new trade theory and the competitive advantage theory, propose new variables to take intoaccount as basic elements to understand the economic behavior and performance of each nation.
These crucial elements which include the endowment of capital and labor factors, the capacity to produce rapidly and efficiently new technology, the advantages gained by developing economies of scale and the integration of managerial skills to make companies more competitive in different nationalsettings by learning from the experience and the conditions, are widely recognized components of everyday business life that determine the role of a given country in the economic and trading global scenario.
Thereby, it is possible to say that competitiveness has different faces and nations have the chance to develop either a specific strength or another or a mixture of several strengths depending...