“Globalization” refers to the growing interdependence of countries resulting from the increasing integration of trade, finance, people, and ideas in one global marketplace. International trade and cross-border investment flows are the main elements of this integration. Globalization started after World War II but has accelerated considerably since the mid-1980s, driven by two main factors. One involves technological advances that have lowered the costs of transportation, communication, and computation to the extent that it is often economically feasible for a firm to locate different phases of production in different countries. The other factor has to do with the increasing liberalization of trade and capital markets: more and more governments are refusing to protect their economies from foreign competition or influence through import tariffs and nontariff barriers such as import quotas, export restraints, and legal prohibitions. What it’s means here is “free trade”. (Worldbank, ND) Free trade is a system in which goods, capital, and labor flow freely between nations, without barriers which could hinder the trade process. Many nations have free trade agreements, and several international organizations promote free trade between their members. (wiseGEEK, 2010) Thus in simple, it means a country can import or export from other one without any barrier.

A number of international institutions established in the wake of World War II-including the World Bank, International Monetary Fund (IMF), and General Agreement on Tariffs and Trade (GATT), succeeded in 1995 by the World Trade Organization (WTO)-have played an important role in promoting free trade in place of protectionism. (Worldbank, ND) However, there are a number of arguments both for and against this practice, from a range of economists, politicians, industries, and social scientists. (wiseGEEK, 2010) Let us reviews them through the impact of free trade on international business. Those impacts can be categorized into gains or positive and negative impacts. (Latestbusinessupdates, 2010)