Globalization of Financial Markets SLP Essay Example | Topics and Well Written Essays - 500 words

Globalization of Financial Markets SLP - Essay Example nd of the Second World War, organizations such as the International Monetary Fund, the International Bank for Reconstruction and Development and the GATT has spearheaded efforts for trade and development the world over (Caruana, 2007). Thus the goal of globalization is fast becoming a reality. The GATT gave way to the WTO or World Trade Organization on January 1, 1995. The WTO is a better representative of world trade with a membership of more than 150 countries of all sizes from various parts of the globe. However, globalization has been regarded as a two edged sword by some developing nations. They state that opening their borders to the more developed nations result in a gain to the developed economies while putting themselves at a loss. This is because the international franchises fast take over the new territories. People are attracted to them and spend a lot of money there, resulting in capital outflows to the developed world. There is a strong case for protecting the home industries from being ruined by opening the doors to globalization. Also the membership of the WTO requires adherence to the principles of non-discrimination, reciprocity, binding and enforceable commitments and transparency, the larger and more stable economies generally get more favorable status . Standards of quality control demanded by developed nations like the ISO certification may be hard to achieve by less technologically developed nations (Berniker et al., 2001). Let us take the case of Brazil. Brazil is one of the world’s leading economies and has the fastest growth in Latin America. It imports machinery, oil, electrical and transport equipment, chemicals, electronic goods and auto parts (CIA World Factbook, 2011). It exports steel, paper, iron ore, soybeans and coffee. China, the USA and Argentina rank among its best trading partners in terms of volume of trade conducted with them. Exposure to world markets has undoubtedly affected the price of coffee and soybeans both at home