What is not a benefit of globalization?(The Earth is not Ours) *
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Answer:
Costs of globalisation
Free trade can harm developing economies. Developing countries often struggle to compete with developed countries, therefore it is argued free trade benefits developed countries more. ...
Environmental costs. ...
Labour drain. ...
Less cultural diversity. ...
Tax competition and tax avoidance.
Answer:
1. Free trade can harm developing economies
Developing countries often struggle to compete with developed countries, therefore it is argued free trade benefits developed countries more. There is an infant industry argument which says industries in developing countries need protection from free trade to be able to develop. However, developing countries are often harmed by tariff protection, that western economies have on agriculture. Paradox of Free Trade
2. Environmental costs
One problem of globalisation is that it has increased the use of non-renewable resources. It has also contributed to increased pollution and global warming. Firms can also outsource production to where environmental standards are less strict. However, arguably the problem is not so much globalisation as a failure to set satisfactory environmental standards.
3. Labour drain
Globalisation enables workers to move more freely. Therefore, some countries find it difficult to hold onto their best-skilled workers, who are attracted by higher wages elsewhere.
4. Less cultural diversity
Globalisation has led to increased economic and cultural hegemony. With globalisation there is arguably less cultural diversity; however, it is also led to more options for some people.
5. Tax competition and tax avoidance
Multinational companies like Amazon and Google, can set up offices in countries like Bermuda and Luxembourg with very low rates of corporation tax and then funnel their profits through these subsidiaries. This means they pay very little tax in the countries where they do most of their business. This means governments have to increase taxes on VAT and income tax. It is also seen as unfair competition for domestic firms who don’t use the same tax avoidance measures
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