How International Businesses and Politics Interact

International politics is a vast field, which helps to build strong ties between nations through peaceful economic, cultural, and personal relationships. Although international politics encompasses a wide variety of disciplines, practitioners who specialize in international politics usually focus more narrowly on certain kinds of nation-to-nation relationships, including trade negotiation, international terrorism, and international trade. For example, those who work in international politics understand the relationships between the United States and China, between South Korea and Japan, or between the United Kingdom and India.

How Does International Politics Function?

International politics also involves the interactions among world leaders, which range from the occasional summit meeting to the annual meetings of the Organization of Security Executive (OSSE) and the World Trade Organization. As these issues arise, international politics further encompasses the process by which diplomacy is carried out, the policies and actions that countries take to implement international political decisions, the reporting that governments do on such activities, the monitoring of such activities, the diplomacy and international trade conducted during such diplomacy, and the diplomacy that result from such diplomacy.

One of the most important components of international politics is economic integration. Economic integration refers to the gradual approach toward a union or association, in which both countries desire to be deeply integrated as one unit. The term “globalization” describes this trend. Since the globalization tendency is somewhat new, some international political observers have viewed it with skepticism. Proponents of globalization claim that it has significantly improved the prospects for economic integration.


Critics of international economic integration point out that increased globalization may have some negative implications for workers at the point of production in any nation. They argue that increased competition for jobs has led to an increase in the relative prices of labor in each country. In addition, enhanced trade flows can lead to increased corruption, a problem that has plagued international trade since the advent of the global market. Moreover, increased trade flows can reduce domestic employment in some countries. A study by Oxford University’s Center for European Studies indicates that there are a number of instances in which national employment is falling as a result of economic globalization.

Effects Of Globalization

The political influence of globalization is also important because it can have a significant effect on the direction in which businesses choose to operate. For instance, a corporation in China that wanted to develop a nuclear enrichment facility could have been deterred by political constraints in the United States. However, a similar business venture in India could have been possible under different circumstances. Political influences on business decisions are nothing new. International trade and politics have been present since the beginning of the free world.

Even before the advent of globalization, global trade and politics played a role in the direction that companies chose to travel. For instance, in the 19th century, the interests of European manufacturers frequently diverged from those of their counterparts in the United States. Similarly, nations with poor growth potential and unstable societies were less willing to invest in industrial goods from developed nations. These differences in international policy and trade practices emerged as a result of political pressures from abroad, much of which was directed at preserving preexisting domestic industries.

As international trade and politics have grown more intertwined over time, there has been an increasing demand for more responsive international legal system. Efforts by governments to address these challenges have often failed. A popular complaint against international trade is that it creates artificial shortages, leading to increased poverty and increased worker exploitation. International trade does not only impact on local employment, but it has also affected the national prosperity. In the case of human rights, many governments have been unwilling to implement reforms that would allow people to seek fair compensation for their harm at the hands of other human beings.