Introduction
International trade refers to the exchange of goods, services, and capital across national borders. This exchange can take various forms, including exports, imports, and foreign direct investment (FDI). International investment encompasses the flow of capital from one country to another, primarily in the form of FDI, portfolio investment, and foreign aid. Global poverty refers to the state of living below a certain poverty line, often defined as having an income of less than $1.90 per day. This essay will argue that international trade and investment can play a significant role in addressing global poverty, but their effectiveness depends on various factors.

Arguments for International Trade and Investment Reducing Poverty
Economic Growth and Job Creation
International trade can foster economic growth by enabling countries to specialize in the production of goods and services where they have a comparative advantage. <a href="https://www.investopedia.com/terms/c/comparativeadvantage.asp:~:text=Comparative%20advantage%20is%20an%20economic%20theory%20that%20states,to%20produce%20a%20good%20or%20service%20than%20another.%22">[1]</a> This leads to increased efficiency and productivity, allowing countries to produce more goods and services with the same resources. Access to larger markets through international trade creates opportunities for businesses in developing countries to expand their operations, leading to job creation and higher incomes. The growth of export-oriented sectors, such as manufacturing and agriculture, can stimulate economic activity and generate employment across various industries.
Technology Transfer and Skills Development
FDI plays a crucial role in transferring technology and knowledge to developing countries. Multinational corporations (MNCs) often bring with them advanced technologies, production processes, and management practices. This technology transfer can enhance productivity, improve product quality, and create new business opportunities. Additionally, FDI can lead to improved human capital through training and skills development programs. MNCs invest in employee training and education, equipping workers with the skills needed to operate modern technologies and participate in the global economy.
Increased Access to Goods and Services
International trade can lower prices for consumers in developing countries by increasing competition among producers. This increased competition can lead to a wider variety and increased availability of goods and services, improving living standards. The availability of essential goods such as food, medicine, and clothing can enhance well-being and reduce poverty. Furthermore, trade can facilitate the transfer of essential inputs and raw materials, contributing to the production of goods and services within developing countries.

Arguments Against International Trade and Investment Reducing Poverty
Exploitation and Inequality
Critics argue that international trade can lead to the exploitation of workers in developing countries, with MNCs taking advantage of lax labor regulations and low wages. This can result in poor working conditions, health and safety risks, and limited opportunities for workers to improve their lives. Additionally, the focus on export-oriented sectors can lead to the neglect of domestic agriculture and small-scale industries, potentially contributing to environmental degradation and resource depletion. Finally, the benefits of trade may not be distributed evenly, leading to income inequality both within and between countries, where a wealthy elite may reap most of the gains while poverty persists.
Dependence and Volatility
Developing countries that specialize in the production of primary commodities, such as agricultural products or raw materials, can face the risk of dependence on developed countries for markets and technology. This dependence can leave them vulnerable to global economic shocks, such as commodity price fluctuations or recessions in developed countries. Furthermore, specialization in primary commodities can hinder economic diversification, limiting opportunities for long-term growth and development.

Conditions for Success
International trade and investment can be effective tools for poverty reduction, but their success depends on several conditions. Fair trade practices, such as ensuring fair prices and labor standards, are essential to prevent exploitation and ensure that workers in developing countries benefit from trade. Good governance within developing countries is critical for creating a stable and predictable environment that attracts investment and promotes economic growth. This includes strong institutions, a transparent legal framework, and effective policies that support economic development. Investment in education and infrastructure is crucial for enhancing human capital and improving productivity, which are essential for long-term economic growth. Finally, targeted policies are needed to ensure that the benefits of trade and investment reach the poorest segments of society. This may involve government programs, social safety nets, and other initiatives aimed at reducing poverty and inequality.

Conclusion
International trade and investment have the potential to contribute significantly to poverty reduction by promoting economic growth, creating jobs, and improving access to goods and services. However, their effectiveness depends on a number of factors, including fair trade practices, good governance, and targeted policies. A nuanced approach is needed that addresses the challenges while maximizing the benefits, ensuring that the positive impacts of trade and investment reach the poorest populations and contribute to a more equitable and sustainable global economy.

Sources:

[1] “Comparative Advantage.” Investopedia. Accessed October 27, 2023. https://www.investopedia.com/terms/c/comparativeadvantage.asp:~:text=Comparative%20advantage%20is%20an%20economic%20theory%20that%20states,to%20produce%20a%20good%20or%20service%20than%20another.%22.