Going global is a concept which originated in the early colonial days as countries seeker raw material that did not exist in their own land. The rationale for today’s modern firms for going global consists of staying in business by resorting to resources, markets, knowledge, and cost factor not achievable domestically. By exploiting foreign markets, companies are able to reach greater volumes. The greater volumes help offset the cost of research, development, and production. Another key advantage of going global is the ability to minimize cost. One method to reduce cost is to strategize globally production sites so as to balance between the cost of production sites within each region and geographical location for fast customer turnaround times. According to a recent speech by Pascal Lamy, director of the World Trade Organization (WTO), during the current economic crisis, the world must continue to encourage “going global” resist staying “local”. Consumers are more in need cheaper good and services which efficiencies in international trade can bring. However, many trade barriers exist from tariffs between countries that impede against world trade to reach its natural equilibrium. In the most recent and on going efforts to lower trade barriers around the world, the WTO has since 2001 organized the Doha Development Round. The Doha Development Round is a trade negotiation between countries that are part of the WTO. According to a study by University of Michigan, if trade barriers from the Doha negotiation deals were to be lowered by 33%, there would be $574 billion increase in global welfare. However, trade negotiations have been stalled over difference between developed and developing countries on agriculture, industrial tariffs, and services, and trade remedies.

Citations:

www.wto.org, WTO News/Speeches, DG Pascal Lamy- Global Problems, Global Solutions: Towards Better Global Governance, 2009. WTO Doha Development Agenda: Negotiations, implementation and development.