Christian D.

Dela Cruz The Contemporary World

BSCE – 1E Ms. Marlyn Lita

The Modern Dilemma of Economic Globalization

Throughout the years, the phenomenon of globalization had established

a key part in the development of individual economies around the world
(Kuepper, 2020). Technological advancements in transport and communication
made it easier to trade goods, services and capital on a global scale, leading to
stronger economic ties and engagement among nations. Recognizing the
impacts of globalization, the Philippines demonstrated its determination to face
its challenges, in order to prepare itself for global competitiveness and reap the
benefits that globalization may bring (Banlaoi, 2009). However, as the steady
growth of the world trade appears to be stopped in relation to political conflicts,
there is a modern dilemma among developing countries, including the
Philippines, on whether to adopt a policy of free trade or protectionism. Is trade
liberalization a good thing at all or now is the time to adopt stricter policies on
trade?
The debate between free trade and protectionism has existed for
centuries. But to understand the pros and cons of these trade agreements, it’s
important to have knowledge of its concepts. Free trade is an economic policy
that exists when nations can freely swap goods and services without the
constraint of tariffs, and any form of trade barriers. This policy allows
businesses in each country to focus on producing and selling the goods that
best use their resources while other businesses import goods that are scarce or
unavailable domestically. That mix of local production and foreign trade allows
economies to experience faster growth while better meeting the needs of its
consumers. However, with greater free trade, domestic companies face more
competition from multinational companies (Chacin & Moreno, 2020). On the
other hand, protectionism is an economic policy that exists when nations aim
to prevent or restrict the supply of goods coming into the country. Governments
impose huge tariffs on imported goods to discourage foreign companies from
entering the borders and competing with domestic industries. However, for a
country with limited supply of resources, domestic consumers pay higher price
for goods. At the same time, importers face a decline in demand, so
international jobs are lost (Boyce, 2020).
However, which policy would benefit our country the most? The
Philippines, as a developing country, doesn’t have enough power to support its
economy all by itself. It’s true that protectionism will protect domestic
companies from foreign competitors. However, this policy would weaken the
economy as the domestic product will decline in quality and become more
expensive than imported goods (Amadeo, 2020). On the side of free trade, The
Philippines has been building a solid foreign trade platform ever since it signed
an agreement with the World Trade Organization (WTO) in 1995 (Liao &
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Pasadilla, 2005). Since then, the nation opens its doors to global free trade,
with high hopes that this agreement would bring developments within the
nation’s poor economy and also to have a role within the global economy and
trade (Villa, 2016). However, the Philippines has failed to create an organized
socioeconomic environment that would have prepared the country for global
competition. On the bright side, Philippine free trade agreement brought drastic
changes in Philippine society. Vast developments in technology were introduced
in the Philippine market by foreign investments. Multilateral agreements
between nations also allowed Filipino workers to travel and work abroad.
Economic engagement of the Philippines with the rest of the world has made a
significant role in the economic revival of the country.
In this modern debate on how to enrich a country with certain economic
policies, free trade has undoubtedly won the argument. And despite of the
consequences it may bring, free trade policy can make the Philippines into an
economically-progressive nation, if the political leaders can utilize its benefits to
help local workers and businesses to improve their capabilities to enter the
competition of global free market.

References:

Internet Articles

Amadeo, K. (2020, August 21). Trade protectionism: Definition, pros, cons, 4

methods. Retrieved from https://www.thebalance.com/what-is-trade-
protectionism-3305896
Barone, A. (2020, January 29). Free trade agreement. Retrieved from
https://www.investopedia.com/terms/f/free-trade.asp
Boyce, P. (2020, September 10). Protectionism definition. Retrieved from
https://boycewire.com/protectionism-definition-and-types/
Chacin, D., & Moreno, V. (2020, May 28). A big dilemma for Costa Rica: Free
trade or protectionism. Retrieved from https://delfino.cr/2020/05/free-trade-
vs-protectionism-is-costa-rica-in-between

DELA CRUZ, CHRISTIAN D. | BSCE-1E

Technological University of the Philippines - Manila
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Kuepper, J. (2020, April 4). The impact of globalization on economic growth.

Retrieved from https://www.thebalance.com/globalization-and-its-impact-on-
economic-growth-1978843
Picincu, A. (2018, October 8). How does globalization affect the world economy.
Retrieved from https://bizfluent.com/info-8587960-globalization-affect-world-
economy.html
Pologeorgis, N. (2019, May 9). How globalization affects developed countries.
Retrieved from
https://www.investopedia.com/articles/economics/10/globalization-
developed-countries.asp
Villa, J. (2016, August 22). Globalization in the Philippines. Retrieved from
https://hubpages.com/politics/Globalization-in-the-Philippines

News Articles
Oplas, B., Jr. (2016, December 15). Free trade means more investments and
increased mobility. Business World Online. Retrieved from
https://www.bworldonline.com/content.php?section=Opinion&title=free-trade-
means-more-investments-and-increased-mobility&id=137815

Journals
Banlaoi, R. (2004). Globalization and nation-building in the Philippines: State
predicaments in managing society in the midst of diversity. Growth and
governance in Asia, 203-214.

Pasadilla, G., & Liao, C. (2005). Who are opposed to free trade in the
Philippines. Philippine Journal of Development, 32(1), 1-17.

DELA CRUZ, CHRISTIAN D. | BSCE-1E

Technological University of the Philippines - Manila