Comprehension
A problem with international trade is that it externalizes costs on a grand scale. Tropical hardwood products can be sold extremely cheaply in the United States as lumber, plywood, shipping pallets, and so on. The environmental costs of producing those hardwood products occur far from the consumer who buys a piece of cheap Brazilian plywood.
Making matters worse, the environmental costs of the plywood are usually exported to places where there are few legal controls on pollution and resource extraction. A factory in the United States, for example, is legally bound to minimize its production of air and water pollution. Pollution control can be expensive, and internalizing this cost makes a factory less profitable.
A similar factory in Mexico might have far less responsibility for pollution control, making it cheaper, at least in the short term, to produce goods there than in the United States. Ongoing protests in the United States and elsewhere around the world against the World Trade Organization (WHO) and other forces of globalization have been largely about such exporting and externalizing of environmental and social costs of production.
Another criticism of international trade is that the international banking systems that finance it are set up by and for the wealthy countries.
The WTO and GATT are both made up of relationships and agreements between corporations in a few very wealthy countries. Representatives of less powerful countries often charge that these agreements trap poorer regions into the role of suppliers of natural resources timber, mineral ores, fruit, and cheap labour. These countries are forced to mine their natural capital for only small returns in wealth.
According to the passage, international trade
A. stimulates economies
B. externalizes costs
C. is controlled by wealthy countries
Choose the correct answer from the options given below:
