The main argument for free global trade is that countries can gain from trade if they specialize in producing goods in which they have a comparative advantage, those goods that can be produced at relatively low opportunity. But one of the most controversial issues against globalization is the concern that free trade hurts the environment, both locally and globally. However many researchers argue that free trade can help the environment. Some ways in which free trade benefit the environment are: countries with little trade and centralized decision making contaminate more than countries with free markets; Polluting industries have comparative advantage in rich countries with tighter environmental regulations; and that subsidies are harmful to the environment.
According to Douglas Irwin in the greatest environmental disasters in recent years have taken place in Eastern Europe and the former Soviet Union, countries that were among the most isolated countries of their era. With little trade or interaction with the outside world, “The horrible air pollution caused by state-run . . .industries . . . owe nothing to free trade, but resulted from a system of centralized decision-making that valued resources less wisely than a system of decentralized markets with well-established property rights and prudent government regulation.
One argument against free trade is the “pollution haven” hypothesis, which states that free trade will prompt polluting industries to move to poor countries where environmental regulations are lax. Nevertheless Copeland and Taylor find no evidence to sustain this hypothesis. By the contrary their results suggest that rich countries have a comparative advantage in capital-intensive polluting industries, so these industries are likely to stay in rich countries even if environmental regulations are tighter. So free trade can benefit the environment since Polluting industries have a relatively low opportunity cost in countries with tighter environmental regulations.
But the main argument that supports that free trade can benefit the environment is that government efforts to promote domestic industries with subsidies are harmful to the environment. For example, when fisheries started to decline, government subsidies were introduced to relieve the industry’s economic problems. But this increased the number of fishermen and depleted stocks even further. Today, excess fishing capacity exists worldwide, leaving many formerly productive fisheries in collapse. Now economists suggest that had the industry been left to find its own balance, fish populations would not have been exploited to extinction. Catch rates would have declined to such low levels that further fishing became unprofitable. There are many examples of perverse subsidies that are both costly to the taxpayer and cause environmental damage. But the beneficiaries such as fishermen and farmers are politically powerful, and the subsidies live on despite repeated attempts to kill them off.

International trade has the potential to benefit all participating countries because of the following reasons: Comparative advantage and the gains from trade; Misallocation of resources: Resources will be diverted to producing goods for which there is a high opportunity cost rather than for goods with lower opportunity costs; Costs of tariffs exceed benefits .For example, it was estimated that it costs U.S. consumers $60,000 or more to buy U.S. made clothing for each job "saved" by protectionism; Retaliation: Often, countries imposing tariffs on imported goods find their exports are subject to high tariffs; Negative Rates of Protection. Tariffs on industrial goods increase costs to domestic producers diminishing their international competitiveness; And because free trade Promotes competition in domestic markets. Eliminating trade barriers and tariffs may be very important in promoting competition in domestic markets in which monopolization might otherwise result. Especially in small countries, economies of scale may create natural monopolies where domestic markets are small. However, producers can achieve economies of scale by producing for both domestic and foreign markets. Also if a country trades, the competition from imports may stimulate grater efficiency at home. This extra competition may prevent domestic monopolies/ oligopolies from charging high prices. It may stimulate greater research and development and the more rapid adoption of new technologies.
On the other hand countries typically restrict their trade because of the perils of trade, which in many cases lead to less competition. For example:
Protection of infant industry, there may be industries that are in infancy, but which have a potential comparative advantage. With out protection, these infant industries will not survive competition from abroad; therefore if countries do not protect these industries they may allow the establishment of foreign-based monopolies in the future; Changing comparative advantage and the inflexibility of markets. Comparative advantage can change over time, either natural or as result of deliberate policies, thus free trade may reflect past comparative advantages rather than the present. These industries could be regarded as infants and thus warranting protection. Prevent dumping and other unfair trade practices. A country may engage in dumping by subsiding its exports or firms may practice price discrimination by selling at lower prices than its actual costs to gain market share and eliminate competition in foreign countries.
To sum up, We can say that free trade can led to competition by eliminating trade barriers if they have mature industry with comparative advantage and foreign countries are not subsiding their own industries; and if the comparative advantage can be sustained through a long period. On the other hand free trade can lead to less competition when an industry is an infant or senile industry; when company is using unfair practices or a government is subsiding an industry.


Technological progress increases economic growth; it cut the average cost of production and it creates new products to the market. But R&D requires of investment and a resource of companies, so governments protects these investments by patents and intellectual property rights to encourage organizations to invest in developing new technologies. However in the World Trade Organization the TRIPS agreement (Agreement on Trade Related Aspects of Intellectual Property Rights) has come under increasing criticism in a variety of areas. The agreement has been described as unbalanced, in that it disadvantages developing countries and prevents them from setting and implementing policies to achieve legitimate development goals. And that TRIPS agreement harms developing countries in the areas of food, biodiversity and agriculture, and health.
First of all TRIPS rules must be fair and balanced. Following this philosophy TRIPS want to provide incentives for innovation and research so society can benefit from it. But the poorest countries argue that their societies do not benefit from these agreements. In first place, developed countries have little knowledge to protect. And in second place when patent law comes into force they will suddenly have to pay more to import knowledge in knowledge-intensive products. TRIPS shifted the global rules in favor of the industrialized countries. Therefore the more advanced developing countries may eventually gain as well from patent protection as they develop further.
Undeveloped nations argue that WTO agreement on TRIPS disregards the interests of farmers in developing countries because of the following reasons: Farmers constitute majority population of most of the developing countries and will directly be affected by this agreement. TRIPS agreement is threatening the real owners of natural resources on demands being made by some of the industrialized countries. TRIPS are a protectionist device promoting corporate monopolies of seeds and, genes. It shifts the balance of control away from public interest to the private gains of patent holders. The main concern in this issue is that transnational companies, through genetic modification technology, will acquire patents and will, eventually, control everything from genes, seeds, plants, and agricultural harvests.
Other concern is that transnational companies have an unfair advantage against farmers. Since farmers lack the scientific capability to innovate and patent genetic materials and are not even able to catalogue the natural resources they currently have. On the other hand, bio-tech companies are putting increasingly more resources and expertise to patent these. This is also true in developed countries where farmers are not able to contend with companies.
One of the main arguments against TRIPS is that access to essential medicines is very unequal across different countries and regions:
• 75% of the world’s population live in developing countries.
• They account for 8% of the pharmaceutical sales.
• 1/3 of the world’s population does not have access to essential medicines.
• In the poorest parts of Africa and Asia, over 50% of the population do not have access.
• There are 33.4 million people infected with HIV worldwide, of which 83% are in sub-Saharan Africa and another 11% in Asia and Latin America.

The main reasons for these differences are the inability of governments to provide access to medicines. The most common types of problems in turn hinder access to medicines are:
• Prohibitive drug prices
• Lack of research and development (R&D)
• Supply problem
• Regulatory problems

The main argument concerning health is that many medicines are not like CD-ROMs, Barbie dolls or computer games. For millions of people they are a matter of life and death. Many pharmaceutical companies have offered essential medicines at reduced prices – although not at a loss – to developing countries. Many governments and public health civil associations welcome these schemes, although they emphasize that there is a need for drugs to be offered for longer periods and for a wider range of products. They do not see the utility of preferential pricing schemes as a long-term solution. Such schemes ultimately leave governments dependent upon the goodwill of pharmaceutical companies; they may also effectively restrict governments by tying them to certain conditions. Industry insists that charitable schemes of this sort can be made available as long as they are needed: however, developing countries would like the freedom to be able to independently plan and implement their own national health strategies.


In the second half of the 1990s the United States was experiencing its longest business cycle expansion. This caused speculation that a new economy was emerging, on the basis of a strong productivity growth and rising competition, which lead to high output and low inflation. Particular noteworthy was the substantial increase of the Total Factor Productivity (TFP) that occurred in the United States after 25 years of disappointing productivity performance. Along with these productivity gains, substantial investment was taking in Information Technologies and Communication equipment (ITC) The stock ITC related capital has increased dramatically since the mid 1970s but accelerated after 1995 with the development of the World Wide Web. So those countries ahead in the technological race Technology will tend to get further ahead as the dynamic forces of technology enhances their competitiveness, improve their profits, and provide yet further potential technological advances. So governments should have technological polices to encourage firms to conduct R& TD. Some policies that governments can apply to improve the knowledge networks in the economy are:
Public Provision: by implementing this policy the government might provide the necessary R&D itself, either through its own research institutions or by funding to universities and other research councils.
Subsidies: the government might provide subsidies to companies conducting R&D in IT industries, this policy not only would reduce the risks and cost for business, but it would ensure that the outcome from R&D activities is more rapidly diffused through the economy than might otherwise be expected.
Cooperation in R&D: The government might encourage the cooperation between business to invest in R&D, because the benefits of that can be achieved if the technological developments are widespread in the economy. The government might take various roles like a facilitator bringing private companies together or as an active partner being involved in the R&D process. The main advantages of this policy are it will: reduce the potential for duplication, reduce the costs of R&D, spread more efficiently the outcomes of new technologies in the economy, and allow a more efficient way to allocate resources.
Intellectual rights protection: the strengthens of legal rights over the development of new technologies will encourage business to invest in R&D, as they will be able to protect their investments in from used from other companies.
Training and Education: a key factor in implanting and developing new technologies in an economy is the skills and education of its workforce, so the government might: give subsides to companies that invest in their workforce training and education as well invest in education via scholarships, subsides to universities etc.


The economies of the industrialized countries are being reshaped by the rapid development and diffusion of advanced information and communications technologies. Access to information is unprecedented, and the ability to process and exchange information has helped businesses increase efficiency. So the business firms, industries or economies, which is able to successfully utilize these global trends, will gain a competitive advantage. One-way of doing so is setting standards within the IT industries. Some reasons are:
One reason is that historically companies that have set standards in emerging technologies have gained substantial advantage in their markets. Some examples are General Electric how was able to consolidate its position in the generation and distribution of electricity industry by developing and setting its own standards.
Another important reason is that Companies that don’t set standards now may not be able to compete successful against other producers because some segments of the IT industry (for microprocessors, operating systems, packaged business applications) are virtually closed off because the leading companies in the market, like Intel and Microsoft, set the standards. Other segments of the industry require large capital investments and specialized skills or have already been preempted by earlier entrants. Some larger countries like China and India are, however, in a more advantageous position than small nations since they can negotiate with multinationals for production and technology transfer in return for market access.
Also because the companies that set up new standards in ITC may benefit from patents that would allow them to set up a temporary monopoly. Therefore gaining a significant bargain power. One example is Microsoft that has been accused of being a monopoly in both its operating system business and its browser application.
And finally because the knowledge and expertise gain in the R&D process to establish the standards will give them a competitive advantage against other countries that doesn’t invest in IT developments.
To sump up countries that are engaged in developing IT standards in the new economy will not achieve an economic power because of the high cost to compete in this sector, the monopolies that can emerge in this sector and because they will lack of the human resources experts to compete in the future.

Today's world is also becoming more and more global. The links and interactions between countries and regions are developing rapidly and the need to integrate different kinds of expertise is a must for successfully implementing any project, be it a development project, a public action or a private business. This is especially true of "emerging" countries that offer enormous opportunities due to their big potential and rapidly evolving environment.
Transferring IT technologies do not only benefit emerging countries but also it benefit developed countries as well. On one hand emerging countries benefit because IT transfer help them gain as sustainable growth in their economies by increasing its knowledge, skills and methodologies to improve the whole production cycle. Where technology has been effectively transferred, there should be a visible change - from the person to the production system as well as compatibility with the needs, in the institutional framework, skills, training, financial capacity, promotion, and active support of endogenous capacity and appreciation of the natural environment of the recipient country.
On the other hand the main reasons why developed countries are interested in transfer technology to developing countries are:
Help partners in emerging nations. By transferring technology developed countries may avoid the breaking of traditional subcontracting links that existed between large corporations and small/medium enterprises in developed countries.
The opportunity to access new markets: Liberalization of decades of socialistic practices (both political and economic) on the part of developing countries. This has effectively helped open up their economies to previously has previously rejected external investment, as well as create greater opportunities in a global level playing field for their industries and professionals. A good example is MATAV case a Hungarian own-state company that was sold to Ameritech and Deutsche Telekom (an American and a German telecommunication companies). During the whole process of acquisition there was an intensive technological investment to transfer new technologies to MATAV.
Develop the necessary infrastructure to invest in these countries. A growing sense of hollowing-out on the part of advanced countries, where rising costs related to production, labor, transportation, communication etc. has prompted them to move out of their home countries to emerging economies. For instance in the last years their has been a continue investment from software companies in India mainly because the labor cost to program in India is significant lower then in more developed countries.
Finally we can say that Technology transfer not only benefit develop emerging countries. By helping them gain a sustainable growth. But it also help the developed countries by generating access to new markets, consolidating partnerships with companies based in emerging countries and by accessing to countries where they can produce goods at a relative low opportunity cost.


Reference:


• Anderton, Alain “Economics.” Second Edition. Causeway Press. 1995.
• http://www.daviddfriedman.com/Academic/Standards/Standards.html
• http://www.countercurrents.org/en-venkat090104.htm
• http://www.csrstds.com/fundeco.html
• http://www.epfl.ch/tsd/context.htm
• http://www.gdrc.org/uem/techtran.html
• Miles, David and Scott Andrew “Macroeconomics, Understanding the Wealth of Nations” John Wiley & Sons, Inc. 2002.
• Report on the Conference organized by The Netherlands Ministry of Foreign Affairs and The Quaker United Nations Office, Geneva A TRIPS agenda for development: Meeting food, health and biodiversity needs12-13 October 2001, The Hague.
• Sloman, John and Sutcliffe “ Economics for Business” Prentice Hall Europe 1998.