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The last few decades have witnessed a rapid expansion of international trade. The global trends in macro forces have enhanced globalization where firms have been forced to compete at a global level. The increased demand in the international market has enabled the emergence of transnational corporations, more so to take the advantage of hitherto untapped opportunities in the emerging markets. The effect of this increased international trade is the economic growth of the developing countries since the TNCs enhance labor mobility, poverty and unemployment reduction, flow of capital goods from developed to developing countries and production specialization and efficiency. Generally, the globalization of trade has been instrumental in social transformation (labor markets, poverty alleviation, migration and cultural integration), economic growth (capital flow, financial markets integration, unemployment reduction and market efficiencies) and political enrichment (regulatory framework, trade policies and treaties and diplomatic integration) as well as technological transfer. Indeed, emerging countries like China, India and other South East Asia countries can attest to the economic benefits that international trade brings about.
Despite being associated with economic growth, international trade is also associated with the prevailing environmental degradation. Apart from exporting capital and production expertise to the emerging markets, TNCs have also been viewed to export environmental wealth which leads to the deterioration of public health. According to Asante-Duah and Nagy (1998, p. 125), most developing countries import waste (TNCs investments) to supplement their incomes and boost their economic growth without much consideration of the long term dangers/risks on their environments. The reaction by the governments who realize the negative implications of increased international openness has been to tighten environmental regulations and embrace green revolution strategies. Moreover, environmental activists from all over the world have been aggressively campaigning for environmental protection to prevent the adverse climatic changes brought about by global warming – the Kyoto Protocol is one of those environmental campaign agendas. Therefore, there has been widespread controversy surrounding environmental protection and economic benefits of globalization. This paper will discuss the trade off between the economic benefits and environmental problems arising from increased international trade in relation to emerging markets and Transnational Corporations (TNCs).
Economic effects of international trade
The advent of globalization in the last few decades has enhanced international cooperation as well as ease of capital flow from the developed countries to the developing countries. The globalization of the world economy has put all world economies on the pedestal for structural alignment both in governance and market orientation. The interconnectedness in the global market has affected the economic systems of the emerging markets in terms of market pricing, government trade regulations, market and production efficiencies, monetary and fiscal policies and the relationship between the economic players, government and the TNCs. In addition, the global market has become so competitive that the only viable route to survival is through the services of the TNCs which exhibit enormous and controlling powers in the global economy. Indeed, some of the TNCs have larger capital bases than the GDP of many emerging markets.
The contribution that the TNCs through the international trade have made to the economic growth of emerging markets can not be underrated. Through their global competition for supremacy, the TNCs have transferred their intellectual capabilities, capital endowment and technical prowess to the emerging markets as they seek to capitalize on the production and market efficiencies opportunities available. The rapid GDP growth and rate of FDI in emerging markets such as China and India can be attributed to the influx of TNCs who have realized that their future growth and innovation lies in the developing countries (Elfrink, 2009). They have been attracted by the production efficiency through cheap labor and availability of raw material and through their technological strength; they have enhanced the establishment of manufacturing plants, infrastructural development and general growth of the economy in these countries. For instance, according to Elfrink (2009), India is one of the main gainers due to its competence in research and development, fast growth in young talented population, sound government policies, cultural tolerance and diversity and its being the largest democracy and freer market.
Food supply in the global economy and especially in the developing countries has been a great concern for many years. Through the international trade, food security has been improved especially considering that most of the big players in agribusiness are the TNCs who extend their power to ensure that agribusiness policies are designed not only to serve their business interests but also to facilitate improvement of social welfare through food security. According to FAO Corporate Document repository (2003), agribusiness is dominated by a few large corporations that are vertically integrated with a lot of powers and with their large capital strength; they are capable of influencing food prices as well as large scale food production thus enhancing food security. The effect of this is the reduction of poverty which is the main undoing in most of these emerging markets.
Capital mobility and foreign direct investment are the major achievement of the TNCs. For a long time the emerging markets have been less endowed with capital goods for investment and with the birth of the international trade, the governments of these countries have been able to access the financial aid to support their welfare goods including education, health, infrastructure, and energy. The impact of the increased FDI has been the lifting of the living conditions of the residents of these countries, increased, per capita income and reduced unemployment, not forgetting the growth of other dependent local industries (Pere, 2005). In addition, through the World Bank, International Monetary Fund and the World Trade Organization, the emerging markets have been able to internally restructure themselves through monetary and fiscal reforms, tariffs and quotas adjustments price control liberalization and other prudent economic decisions to the extent that the developed countries are no longer setting the terms and conditions for negotiation, especially with the high growth of countries like china, India and the Asian ‘tigers’ (Hoge, 2004).

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