The forward march of globalization over the past century is generally considered a major political and economic success. Economists and policy makers alike have viewed growing world trade, in particular, as a good thing. We would be remiss, however, if we failed to acknowledge that many people are having second thoughts about globalization. To a large extent, these second thoughts reflect two concerns shared by many economists: worries about the effects of globalization on inequality and worries that new developments, in particular the growth in offshore outsourcing, are increasing economic insecurity.

Globalization and Inequality We’ve already mentioned the implications of international trade for factor prices, such as wages: when wealthy countries like the United States export skill-intensive products like aircraft while importing labor-intensive products like clothing, they can expect to see the wage gap between more educated and less educated domestic workers widen. Forty years ago, this wasn’t a significant concern, because most of the goods wealthy countries imported from poorer countries were raw materials or goods where comparative advantage depended on climate. Today, however, many manufactured goods are imported from relatively poor countries, with a potentially much larger effect on the distribution of income.

Trade with China, in particular, raises concerns among labor groups trying to maintain wage levels in rich countries. Although China has experienced spectacular economic growth since the economic reforms that began in the late 1970s, it remains a poor, low-wage country: wages in Chinese manufacturing are estimated to be only about 5% of U.S. wages. Meanwhile, imports from China have soared. In 1983 less than 1% of U.S. imports came from China; by 2013, the figure was more than 16%. There’s not much question that these surging imports from China put at least some downward pressure on the wages of less educated American workers.

Outsourcing Chinese exports to the United States overwhelmingly consist of labor-intensive manufactured goods. However, some U.S. workers have recently found themselves facing a new form of international competition. Outsourcing, in which a company hires another company to perform some task, such as running the corporate computer system, is a long-standing business practice. Until recently, however, outsourcing was normally done locally, with a company hiring another company in the same city or country.

Now, modern telecommunications increasingly make it possible to engage in offshore outsourcing, in which businesses hire people in another country to perform various tasks. The classic example is call centers: the person answering the phone when you call a company’s 1-800 help line may well be in India, which has taken the lead in attracting offshore outsourcing. Offshore outsourcing has also spread to fields such as software design and even health care: the radiologist examining your X-rays, like the person giving you computer help, may be on another continent.

Although offshore outsourcing has come as a shock to some U.S. workers, such as programmers whose jobs have been outsourced to India, it’s still relatively small compared with more traditional trade. Some economists have warned, however, that millions or even tens of millions of workers who have never thought they could face foreign competition for their jobs may face unpleasant surprises in the not-too-distant future.

Concerns about income distribution and outsourcing, as we’ve said, are shared by many economists. There is also, however, widespread opposition to globalization in general, particularly among college students. In 1999, an attempt to start a major round of trade negotiations failed in part because the WTO meeting, in Seattle, was disrupted by antiglobalization demonstrators. However, the more important reason for its failure was disagreement among the countries represented. Another round of negotiations that began in 2001 in Doha, Qatar, and is therefore referred to as the “Doha development round.” By 2008 it had stalled, mainly due to disagreements over agricultural trade rules. As of 2014 there was little sign of progress although the round was still being officially negotiated.

What motivates the antiglobalization movement? To some extent it’s the sweatshop labor fallacy: it’s easy to get outraged about the low wages paid to the person who made your shirt, and harder to appreciate how much worse off that person would be if denied the opportunity to sell goods in rich countries’ markets. It’s also true, however, that the movement represents a backlash against supporters of globalization who have oversold its benefits. Countries in Latin America, in particular, were promised that reducing their tariff rates would produce an economic takeoff; instead, they have experienced disappointing results. Some groups, such as poor farmers facing new competition from imported food, ended up worse off.

Do these new challenges to globalization undermine the argument that international trade is a good thing? The great majority of economists would argue that the gains from reducing trade protection still exceed the losses. However, it has become more important than before to make sure that the gains from international trade are widely spread. And the politics of international trade are becoming increasingly difficult as the extent of trade has grown.