However, to join the international franchise of trade comes at a hefty price. The perception of this can be viewed as a weakening of the nation's "economic sovereignty" particularly the degradation of fixed and exclusive rights over its economic activities, wealth, and natural resources. This is quite common when seeking membership to the United Nations, European Union and other supranational bodies. World history will show that such economic sovereignty of an individual member is occasionally influenced by global economic trends (Steger, 2003).
It's this increase in the number, and power of such organizations that have limited country's sovereignty to a certain extent. A leading example of this is highlighted by the three leading financial institutions, the World Bank, the International Monetary Fund, and the World Trade Organization, in domestic economic affairs of their members. With over 50,000 TNC's having developed during the last century many of which are now sharing, or crossing the threshold into "individual country sovereignty" in the economic arena. For developing nations, due to poor economic conduct many have succumbed to foreign assistance and intervention, foregoing a degree of government and economic autonomy (Croucher, 2004).
For this reason, many have identified such loss of economic sovereignty under the term of "globalization" as a new form of neo-colonialism (Wolf, 2004). Furthermore, a number of the world's financial superpowers; the United States, Japan and the European Union have taken advantage of their dominant positions and through ripple effects, they to impact upon foreign economies. And in this age of globalization, it is becoming more apparent that the economic control of individual nations is no more, and political management is wrought with outside pressure and influence, and not always beneficial at that (Perkins, 2004).
Globalization DefinedGlobalization can be more accurately defined by its actions. It's both an organic process that facilitates corporate growth across borders, and a network of international parent and subordinate groups with economic and at times political ties all moving in the same direction. Like the notion of "free trade", globalization is also an ideology that encourages the reduction of trade barriers and in certain circumstances the removal of political opposition by making it seem highly beneficial to national economies, and inevitable.
Similarly to free trade, globalization aims to bring about economic benefits, but numerous questions have risen to the process, and economic-political regimes it creates. Despite the financial yields it generates, it can also threaten democracy which in turn can slow down its progress; countless protests have occurred with free trade as the central theme. Understandably adopting the formula of globalization represents an enormous undertaking, especially considering the economic and political power of its beneficiaries; its momentum is great, as are its protractors (Kohler & Chaves, 2003). Globalization also has its weaknesses with countless manufacturing sites being sent offshore to take advantage of cheaper labor, cheaper resources, tax incentives and even the exploitation of lax climate regulations, all in aim of increased profit. Likewise to, developing countries may lose sight of their long term economic goals by bowing to the pressure of globalization in applying biased foreign or monetary policy (Dreher, Gaston & Martens, 2005).
Globalization also plays an important role in Australian trade. Just as globalization...