Globalisation: The Comic Talks To Me

Sunday, May 14, 2006


In this comic, there are a few mentions of noteworthy entities, especially in the arena of economic globalization, namely, the WTO (World Trade Organization), and the GATT (General Agreement on Tariffs and Trade). Both of these facilitate discussions and agreements due to free trade. I am deducing (I repeat, I am deducing) that the N on the heavyset white man is referring to North America, and the S on the scrawny black man is referring to South America (I stress again, I am deducing). The WTO, in this case, is the umpire, in what appears to be a boxing match, with GATT being the gong.

The boxing match is, what I believe to be, a representation for talks (in the generic sense) with the aim of consensus, and the WTO being a facilitator and the GATT being the catalyst for the talks between generic North American and South American countries.

What the comic is trying to send across, I think, is that the South American countries do not stand a chance in the talks, because of their status, that is developing countries, as seen through the miniscule stature of S. On the other hand, N has a hulking stature, showing that the North American nations are very much in control of the talks, which is most likely about the introduction of free trade between the North and South American states.

The author's intent on producing this comic, I think, is to show that free trade is very much in the interest of developed countries. This is because free trade is trade with no restriction. No taxes, no tariffs, no protected companies. This allows developed countries, that tend to have mature and economically stronger and more competitive companies, to penetrate the potential markets in developing countries. This bodes ill for developing countries, because they generally possess local companies that are economically weaker and smaller in scale, which naturally lose out to bigger foreign companies, in terms of market share.

Also, because of the larger market share held by the foreign companies through imports of their goods into the developing nations, leakages of the country's income would occur. This happens because the money is not earned by local entities, but by foreign ones. The money earned then goes overseas, instead of circulating within the nation itself.

Why is this bad for the developing nation? Local companies do not get the money, and are unable to develop, and foreign companies are able to intensify their presence in the developing nation's economy through the income, creating a vicious cycle whereby more and more money go to foreign entities, and less go to local entities. In some instances, a developed nation is able to control a sector of the economy of a developing nation through one of the foreign companies that hold a huge market share in the developed nation. This is often the biggest cause for worry, on the part of developing countries. Do I hear anyone screaming for sovereignty?

But, free trade might be good for the developing country as well, because there is then increased competition in the market between local and foreign companies, normally leading to better-quality products and services at competitive prices, benefiting the consumer. This scenario seems oddly familiar to that of a free market, does it not? Well, it does, because free trade generally begets a freer market. (Note freer, not free.)

The concept that multi-national corporations and bigger companies would hold the very much larger market share than small and medium enterprises also goes along the same line as the aforementioned concept of foreign and local companies doing so.

If there may be other relevant interpretations to the comic above, feel free to leave your constructive comments at the tag-board.

Marc, the Economic 'Expert' Posted by Picasa
Posted by cram at 12:15 am
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