Globalization
Free trade is one of the factors that facilitate globalization.
Globalization results from the removal of barriers between national economies to encourage the flow of goods, services, capital and labour. Removal of barriers involves lowering or removal of tarrifs and quotas that restrict free and open trade among nations.
Globalization allows businesses, such as large multi-national corporations, to maintain customers,suppliers and even competitors on a world-wide basis.
Neo-classical economics arguements are in favor of globalization and free trade in particular.
The rise of multi-national firms caused by globalization could pose a risk to local industries particularly financial systems. This therefore necessitates tariffs, quotas and other protectionism measures.
Globalization leads to the interdependence between nations, which could cause regional or global instabilities if local economic fluctuations end up impacting a large number of countries relying on them.
The rise of nation-states, multi-national or global firms and other international organizations may be seen as a threat to sovereignty.
Many economists believe that globalization has a positive net benefit on the world economy but the benefits of globalization can be unfairly skewed towards rich nations that has absolute or comparative advantage over developing nations, creating greater inequalities and leading to potential conflicts both nationally and internationally as a result.
In an increasingly globalized economy, free trade is inevitable. Free trade can drive up production and labour costs, including higher wages for more skilled workforce, which again can lead to outsourcing of jobs from countries with higher wages.
Domestic industries in some countries may be endangered due to comparative or absolute advantage of other countries in specific industries. Overuse and abuse of national resources to meet new higher demands in the production of goods is another possible danger of globalization.
Imposing quotas and tariffs to protect local industries also helps in saving jobs for people employed in the industries.
Tariffs and quotas also ensure that industries in less developed countries have a level playing ground with those in developed countries. Tariffs and quotas imposed to prevent dumping is a good example.
Conclusion
In aggregate, globalization has advantages that outweighs it's disadvantages. These benefits may however not be felt in less developed countries due to differences in resource endowments and the prevailing economic conditions in different countries. Tariffs and quotas should therefore be part of the components of globalization so that the goals of resource distribution are achieved.
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