When countries buy and sell goods from and to other countries, this is called globalization. However, globalization also refers to the relatively free movement of financial capital, skills, people, and ideas across geographic and political borders. It can also be described as the way in which societies and governments adjust to the spread of economic and business innovations around the world.
Many people assume that global trade is on a government to government basis, which is not true. Global trade is made business to business, not nation to nation, and it is always changing and growing. Technological advancement has assisted in changes to the way global business operates. Although the method of ecommerce is quite popular, it is not yet significant in global trade. However, the method will surely expand rapidly when all nations involved acquire the technology required. The deregulation of financial markets in the latter half of the 20th century has resulted in the expansion of global business and trade. This has allowed funds, securities, and equities to move rapidly across borders with ease. Trade barriers which used to exist in abundance have been dramatically reduced by the introduction of regional trading alliances such as the EU (European Union), the NAFTA (North American Free Trade Agreement), and the CERTA (Closer Economic Relations Trading Agreement- between Australia and New Zealand) to name a few. Many of these alliances exist, and they have helped to reduce the significance of national boundaries in relation to the flow of goods, services, finance, capital, and employment. There has also been a global increase in the standard of living, resulting in former European colonies gaining independence, and starting to industrialise to attract foreign enterprises. This has meant that countries that exported few manufactured goods in the past have more recently started to export more manufactured, created or industrial goods.
