Seen incidentally. For most critics of globalization, free trade is responsible for the widening of inequality and worsening of the economic insecurity of workers. This logic explains the support to the decisions of Donald Trump to raise the customs duty. Even in the ranks of the workers of developing countries, even though they are usually described as the main beneficiaries of globalization. It is true that, to the extent of the trade liberalization, inequality has widened. The rules of the current world allow a small number of large companies capture an ever-larger share of the value created by exchanges.
the competition is more intense in the phase of production pushes prices down
These companies often enjoy monopolies of intellectual property, reinforced by free-trade agreements designed to expand their market power. This allows them to collect economic rents, particularly in the earlier stages (design) and post (marketing and branding) to the production, where are generated the most profits and value added.
At the same time, the competition more intense in the production phase, pushing prices downward, so that the employers as well as workers receive a declining share of the value. Number of developing countries which ought to benefit from the globalization of value chains are thus remained confined to activities with low productivity and added value.
Serious imbalances
The report 2018 for the united Nations Conference on trade and development (Unctad, forthcoming) finds that a few large companies have steadily increased their share of total exports, up to dominate the world. This trend has even intensified since the global financial crisis…
