In an increasingly interconnected world, economic activities transcend national borders, creating a complex web of global trade and interdependence.

Globalization refers to the increasing interconnectedness of the world's economies, cultures, and populations, brought about by cross-border trade in goods and services, technology, and flows of investment, people, and information.
- Increased Trade and Economic Growth: Specialization and trade allow countries to produce what they are best at, leading to greater efficiency and overall economic growth for participating nations.
- Lower Prices for Consumers: Increased competition from international producers can drive down prices for goods and services.
- Greater Variety of Goods and Services: Consumers have access to a wider range of products from around the world.
- Technological Diffusion: Ideas, innovations, and technologies spread more rapidly across borders, fostering development.
- Job Creation (in some sectors): Export-oriented industries may create new jobs.
- Poverty Reduction: In some developing countries, engagement in global trade has lifted millions out of poverty.
- Cultural Exchange: Increased interaction can lead to greater understanding and appreciation of diverse cultures.

• Job Losses in Developed Countries: Industries in developed countries may struggle to compete with lower labor costs in developing countries, leading to job outsourcing and unemployment.
• Exploitation of Labor: Companies may seek out countries with weaker labor laws, leading to poor working conditions, low wages, and child labor.
• Environmental Degradation: Increased production and transportation can lead to higher pollution, resource depletion, and carbon emissions.
• Increased Inequality: While some benefit greatly, globalization can exacerbate income inequality both within and between countries.
• Loss of Cultural Identity: The dominance of global brands and media can sometimes erode local traditions and cultures.
• Vulnerability to Global Shocks: Economic crises, pandemics, or supply chain disruptions in one part of the world can quickly impact others.
• Race to the Bottom: Countries may lower environmental and labor standards to attract foreign investment, creating a "race to the bottom."

To facilitate and regulate global trade, countries enter into agreements and form international organizations.
- Trade Agreements: Formal pacts between two or more countries regarding tariffs, quotas, and other trade barriers. They aim to reduce barriers to trade and promote economic cooperation.
- Bilateral Agreements: Between two countries (e.g., a free trade agreement between Country A and Country B).
- Multilateral Agreements: Among multiple countries (e.g., the North American Free Trade Agreement - NAFTA, now USMCA).
- Organizations (Basic Understanding):
- World Trade Organization (WTO):
- Purpose: The WTO is an intergovernmental organization that regulates international trade. Its main function is to ensure that trade flows as smoothly, predictably, and freely as possible.
- Role: Administers existing trade agreements, acts as a forum for trade negotiations, and provides a mechanism for resolving trade disputes between member countries. It aims to reduce barriers to trade, such as tariffs and quotas.
- Membership: Has a large number of member countries that adhere to its rules.

• Fair Trade:
• Definition: A social movement and market-based approach that aims to help producers in developing countries achieve better trading conditions. It promotes sustainable farming practices and prohibits child labor or forced labor.
• Principles: Fair prices paid to producers, fair labor conditions, environmental sustainability, transparency, democratic organizations (e.g., cooperatives), community development.
• Certification: Products (e.g., coffee, chocolate, bananas, textiles) can receive Fair Trade certification, indicating they meet specific standards.
• Ethical Consumption:
• Definition: The practice of making purchasing decisions based on ethical and moral considerations, rather than purely on price or convenience.