As globalization continues to bring places and people closer together, the economies of the regions involved become a part of economic globalization. Economic globalization is the economic interdependence of national economies across the world. This interconnected economy helps to move goods, technology, and capital across borders.

The globalization of the world’s economies does have its barriers. Some economies don’t participate in the global economy because of government limitations, lack of economic or technological resources, or other barriers. There is, however, a movement that includes more economies in this global market place. To combat the trade barriers that exist, free trade zones (FTZ) have been established around the world, usually near seaports, international airports, or locations with geographic advantages for trade. The zones are also established to reduce poverty while providing jobs and stimulating the local economy. Many multinational companies are established in these areas.

→ Quick Reflection: How do FTZs benefit the people of the local economies? Why is it beneficial for multinational companies to set up factories in these zones?

The map below illustrates just a few of the free trade zones around the world.

Click on each of the stars on the map to learn more about that zone.

The establishment of free trade zones has had a positive impact on the global economy. Free trade zones benefit the global economy by increasing imports and exports worldwide. Free trade zone areas also see an increase in educated, skilled employees. However, there are some disadvantages to free trade zones. Some political and environmental concerns of the host countries have affected business in these areas.