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Trade blocks remove certain restrictions to trade. Economic blocs help promote free trade. Discrimination against imports nor interference with exports describes free trade policy and the government's role in free trade. The role of the government includes not applying subsidies to exports or tariffs to imports nor quotas. In accordance with the law of comparative advantage, policy allows the trading of partners' mutual gains derived from trade of services and goods. Essentially, the government does not take an active role in regulating trade in both exporting and importing. In the very least, the role of the government becomes minimized.
The detailed benefits of nations union under the FTA or free trade agreements are to be expected due to the way FTA promotes competition and innovation. Much of this is due to how it makes sense financially to purchase a product or service more another from specialists in such production or…… [Read More]
The level of industrialization of the SEA countries also varies largely but this can be attributed to the difference in the size of the domestic market of each country or region and their overall level of development on the economic front. Singapore and Indonesia have benefitted largely from the creation of the ASEAN since these countries are the larger of the SEA countries. Malaysia has also benefitted as a result of being highly industrialized and acting as an outsourcing hub for many companies who need cheap labor and other input costs Keling et al., 2011()
elevance to international business and globalization
Looking at free trade agreements in general and the case study of the ASEAN, we can see that free trade agreements have a key part to play in strengthening the economies of the member states. Therefore, this implies that countries can form free trade agreements in order to create…… [Read More]
However, each stakeholder has its own interests at heart. Those interests in the long-run may be served by freer trade, but in the short-run they are driven more by political considerations.
Markheim, Daniella & Rield, Brian M. (2007) Farm Subsidies, Free Trade and the Doha Round. The Heritage Foundation. Retrieved December 11, 2008 at http://www.heritage.org/RESEARCH/BUDGET/wm1337.cfm
Chang, Ha-Joon. (2007). Protectionism...the Truth on a $10 Bill. The Independent. Retrieved December 11, 2008 at http://www.independent.co.uk/news/business/comment/hajoon-chang-protectionism-the-truth-is-on-a-10-bill-458396.html
Surowiecki, James. (2008). The Free Trade Paradox. The New Yorker. Retrieved December 11, 2008 at http://www.newyorker.com/talk/financial/2008/05/26/080526ta_talk_surowiecki
Krugman, Paul. (2004) the Trade Tightrope. New York Times. Retrieved December 11, 2008 at http://query.nytimes.com/gst/fullpage.html?res=9A01E2D7103CF934A15751C0A9629C8B63
Dorn, James a. (n.d.) Trade and Human Rights in China. Journal of Commerce. Retrieved December 11, 2008 at http://www.cato.org/pub_display.php?pub_id=6260
Goh, Ai Tung & Olivier, Jacques. (2002). Free Trade and the Protection of Intellectual Property Rights: Can we Have One without the Other? Centre for Economic…… [Read More]
Trade is the exchange of goods or services, and international trade is the same when it crosses international borders. Trade across borders traditionally has been subject to trade barriers such as quotas, taxes, tariffs and duties. Modern trade theory rests on two key platforms. The first is Ricardian trade theory, based on comparative advantage, where both parties in a trading arrangement can enjoy a higher net level of trade if they concentrate on producing that in which they have a comparative advantage and trade freely among themselves. This theory has given rise to modern trade theory, which emphasizes this type of resource allocation in production, twinned with barrier-free trade. In practice, "free" trade seldom exists, but freer trade is pursued actively by most nations, operating with the framework of bi- and multi-lateral trade agreements, including those negotiated under the auspices of the orld Trade Organization.
Free trade is…… [Read More]
Free Trade Agreements
Are free trade agreements a good policy for nations? Given that there are 200 free trade agreements in place globally, there are clearly benefits, but what are the negatives? This paper explores the positives and negatives of free trade agreements, and this paper delves into the NAFTA pact between the U.S., Canada, and Mexico, for the upsides and downsides of that agreement.
hat are Free Trade Agreements and why does the U.S. engage in FTAs?
International Trade Administration (ITA) explains on its website that Free Trade Agreements (FTAs) have proved to be "…one of the best ways to open up foreign markets to U.S. exporters" (www.trade.gov). Trade agreements "…reduce barriers" to United States exports, they "protect U.S. interests," and they "enhance the rule of law" with the country that is partnering with the U.S. (www.trade.gov).
American companies can export their products less expensively when trade barriers are…… [Read More]
Free Trade Zones
Using Nissan Motor Mfg. Corp. VU.S. answer: Why Congress establish Free Trade Zones? What advantages Nissan assembling autos FTZ? How argue FTZs community?
easons for the Establishment of Free trade Zones (FTZ)
In the United States, free trade zones establishment is to provide procedural efficiency for firms wishing to engage international trade activities. The establishment of free trade zones by congress is for exempting operators in these zones or sub-zones from custom duty on imported commodities. The Congress makes specific mention of items that are exempt from duties to areas set as foreign trade zones. It is a form of privilege to public, private corporations to undertake operations within the boundaries of the United Nations. It acts as a measure to encourage effective competition and, encouraging economic growth.
Considering the cost of importing parts of Automotives, finished automobiles are imported at a 2.5% lower tariff (Sturgeon T.,…… [Read More]
On the other side of the barricade stand the European Union and Japan.
Canada and Bolivia are part of several free trade agreements: Bolivia is part of the Andean Community Free Trade Area, while Canada is part of NAFTA.
The effects of free trade in agriculture in countries like Canada, China, and Bolivia can be quite diverse. Canada is a developed, industrialized country that can better handle the negative aspects implied by trade liberalization in agriculture. The same situation does not apply to China and Bolivia that are low income countries, where free trade can have more significant effects.
The main advantages of free circulation in agriculture consist in the fact that prices would be lower, favoring the consumers. In low income countries like China and Bolivia, this would further lead to increased food consumption. In developed countries like Canada, it would lead to sustained economic growth. Large producers would…… [Read More]
n 1815, the Corn Law attempted to create a legislative framework that would regulate the import of corn on the British market. The import of corn was initially used as an instrument to complete the supply of corn in those seasons when production was law. At the same time, import would have allowed for prices to remain low and affordable for the large part of the population. The problem, as previously shown, was that the import of corn contributed to the volume of corn on the market and kept prices low, which was not in the interests of the landlords.
Landlords also used the argument according to which the import of corn was dangerous for the national interest and security of Britain. Their argument was based on the idea according to which Britain's enemies could affect the inflow and import of corn on the British market and affect the food…… [Read More]
Disequilibrium in almost any consumer good could cause inconvenience in the face of shortage, but a shortage of food is fatal. This is why governments protect their food supplies -- food markets might behave as any other consumer good but in the sense that society as a whole benefits from avoiding famine and the markets cannot guarantee this avoidance, food also functions as a public good. Public goods will always be subject to considerable regulation - even when competition is introduced and encouraged, it will be met with controls by any non-corrupt government to ensure its ongoing supply. Thus, food will never truly be subject to free trade, and any attempt to impose free trade on the world's food system will inevitably result in moments of disequilibrium and the attendant famine.
An Outcomes-Based Approach
hen food markets fail, starvation often results (Diouf, 1989). Neoclassical trade theory views poverty reduction as…… [Read More]
Global outcome of free trade really depends on which side of the fence one is on. The mention of free trade usually brings to mind topics such as the North American Free Trade Agreement, NAFTA, the Central American Free Trade Agreement, CAFTA, the Free Trade Area of the Americas, FTAA, the orld Trade Organization, and the Fast Track Trade authority for the president of the Untied States (Eddlem pp). However, critics claim that free trade simply means an absence of any government intervention in business (Eddlem pp). Government intervention includes tariffs, taxes, trade sanctions, import quotas, regulations, or subsides, and each of these, including government subsidies, is equally anathema to a free trader because it detracts from the natural efficiency of the free market that produces wealth (Eddlem pp). Thus, all the international trade agreements, from the orld Trade Organization to the FTAA, embrace some form of sanction mechanism to…… [Read More]
Since this approach is not an option, Sampayo and officials with the Matamoros Water & Sewage Board have sought assistance from BECC. Before any project can receive certification, however, the water utility must prove it is self-sufficient and capable of repaying a NADBank loan, generally through user fees. This will prove difficult, since only half the city's water subscribers pay their bills on time, 20% pay late and 30% pay nothing at all. "
For several years, U.S. companies that have moved their operations overseas have avoided the environmental regulations that have been so costly for them here in the states.
The companies escape paying pollution abatement fees as well as penalties if they pollute beyond the federal government standards.
The companies that choose to move do so to lower costs and are not volunteering to take care of environmental issues once they are in the new country. The companies…… [Read More]
Future reductions in trade barriers across the world grant the American farmers, ranchers, manufacturers, and service providers a better access to the 95% of the world's customers. This would obviously lead to an even greater economic growth determined entirely by free trade. The United States economic growth is generated by the healthy export activity. The U.S. goods and services exports covered 10.45 of the GDP and 20% of overall growth of the U.S. economy in 2005. The manufacturing sector exports have increased up to 82% over the pat decade. Also, the services exports have doubled since 1994, $381 billion of total exports, with a $66 billion surplus in 2005. The agriculture sector is also flourishing due to exports, since one third of the U.S. acres is planted for export (Office of the United States Trade epresentative, 2006).
Along with influencing the economic growth, free trade also created more and better…… [Read More]
free trade claim benefits to both individuals and society, while protectionists claim that people need protection from free trade. There is no doubt that business is becoming increasingly global and it seems free trade will mark the future of international business. y considering both sides of the argument, a balanced view of the issue can be obtained. It may even be possible to combine both sides of the argument to give a true account of the impact of free trade.
There is no doubt that an international environment based on truly global free trade is becoming a reality. President George W. ush recently travelled to China and met with Chinese officials to discuss free trade. In a press conference after the meeting he is quoted as saying, "China, as a full member of the WTO, will now be a full partner in the global trading system and will have the…… [Read More]
global capitalism and free trade. e will discuss the impact of the orld trade organization on global capitalism and free trade. In addition we will discuss the purpose of the International Monetary Fund in underdeveloped worlds. e will discuss multinational corporations and the role that they play in free trade and global capitalism. Our research will also include an investigation of the political, economic and social issues the surround global capitalism and free trade. The integration of all these topics will aid us in determining whether or not global capitalism is synonymous with free trade.
Defining Global Capitalism and Free Trade
The Macmillan Encyclopedia defines free trade as "trade that takes place without tariffs or quotas." ("Free Trade")
The encyclopedia also reports that free trade maximizes world production but that free trade can also cause countries to encounter creates "domestic pressures from their own producers to apply tariffs." ("Free Trade")…… [Read More]
The current model is threatened as well by a couple of its more glaring imperfections. The two largest players in the TO have forged their ideas on free trade based on entirely different approaches to the issue. The U.S. has forged its own trade policy based on bilateral agreements and leveraged its economic might to operate almost independently of trade bodies. The EU, on the other hand, has built a trade policy on a vast body of overarching rules and organizations with the intention of these superseding U.S. dominance. It has been hypothesized that these two completely different approaches will eventually clash, bringing all progress towards free trade to a standstill. Should China emerge as some predict to become a third power, with its own perspective on the management of global trade, the risk of such a standstill becomes even greater.
Moreover, the present international economic system will only work…… [Read More]
For example, improving the plight of women and especially poor women is a key goal. Excluding fifty percent of the world's population from participating fully in the global economy makes no sense from a purely economic point-of-view. Founder of Grameen Bank Muhammad Yunus is at the cutting edge of improving the global economy by directly helping women via micro-lending. Progressive economic models like Yunus' will go a long way toward minimizing poverty, decreasing wage disparity between men and women, eliminating discrimination, and also increasing the GDP and per capita income of all nations on earth.
Ideas of free trade already impact working women around the world. As free trade is currently practiced, women remain in mainly low-income positions especially in developing nations with no laws in placed to protect against overt sexism. In most cultures women are expected to be householders while at the same time pressured to work outside…… [Read More]
Yet it has been reviled by human rights associations that blame free trade for a dangerous degrading of workers' rights and its damaging effects on the surroundings. The benefits of free trade can hide its unintentional forces. But actions to protect against its troubles elevate the apprehension of protectionism (Chmielewski, 2011).
Protectionism is the practice of countries to guard domestic industries and their employees by providing subsidies for their manufacture and imposing tariffs on opposing foreign goods. Yet protectionism has been responsible for closing off trade from foreign nations, elevating prices and giving domestic customers less options. A nation that practices protectionism can just as effortlessly be subjected to it by other nations imposing their own import tariffs and awarding subsidies to their industries (Chmielewski, 2011).
Free trade is founded on accords between countries to drop import obstructions, permitting foreign commodities and services to contend on a level playing field…… [Read More]
Protectionism and Free Trade
Principles of Economics:
A Discussion on Protectionism and Trade Liberalization
In the convoluted world of discussion over the future of developing countries, rich nations seem to make all the decisions, regardless of whether they benefit or harm the former group, or so it seems. This supposition is debated heatedly by those concerned and by external actors, especially when it comes to deciding whether trade liberalization is the right modality through which to aid the developing world, and especially when it is conducted through financial means, such as those involving the International Monetary Fund (IMF) loan programs. hat is certain is that developing nations must fulfill quite a rigorous number of criteria to even begin to even start the qualifying process of joining the rich nations' club. The gatekeeper is, of course, the IMF, an organization that ensures that trade liberalization is complied with in order for…… [Read More]
Protectionism and Free Trade
Principles of Economics:
A Discussion on Protectionism and Trade Liberalization
Rich nations make the rules. This comes as no surprise: Since rich people have significant power in their own nations it is to be expected that the rich nations should have analogous power in the world system. Just as surely as rich nations hold the balance of power in the world, it is just as certain that when they use this power it may or may not benefit developing nations. At first such power on the part of the developed nations is likely to seem blatantly unfair. However, the debate about the relative power in the world today between rich and poor nations is more nuanced than that: While wealthy nations may or may not make choices that are most beneficial to developing nations, it is also the case that developing nations can and often do…… [Read More]
global free trade are so obvious, why are nations sometimes so reluctant to embrace measures that might enhance it?)
When looking at the nations of the world and their varying levels of acceptance of global free trade, we must see them in terms of popular opinions, the opinions of vital factions within the government, and the nature in which the given society would be changed. Many non-western societies hesitate to open trade barriers because of a perceived loss of sovereignty. ountries that harbor bitter recent memories of foreign dominance, such as India, remember a world where they were essentially the 'back office' of a mother country that played host to all important decisions regarding the fate of the country's workforce and natural resources. It should be remembered that the government of Saddam Hussain and the political party that he came to lead (the Ba'ath party) were raised on a perceived…… [Read More]
If good jobs are outsourced as a result of those same agreements and consumers are forced to take lower-paying jobs, there is no net benefit.
Furthermore, when producers benefit, the trade deficit improves. The current trade deficit is a good example. Consumers have benefitted the most from the current trade agreements. Agreements that give China most favored nation status, for example, allow for Chinese goods to be imported at low prices due to that nation's cost advantages. The result, however, is a massive transfer of wealth to China. As the country that is doing the manufacturing, they are adding the most value to the products. Therefore, they are reaping the benefits. Consumers may appreciate lower prices, but they are contributing to the net outflow of wealth from American. orse, when they do it on credit, they are essentially building economies all around the world, to the detriment of their own.…… [Read More]
Adam Smith's Free Trade
In ealth of Nations, Adam Smith recognized that human beings have a natural propensity "to truck, barter, and exchange one thing for another." Smith saw the free trade of goods across borders as an extension of this human instinct. People exchange products and services as "free agents" in pursuit of their own individual interests. In the process, people become part of an international economy, connected across national borders, as if guided by an "invisible hand."
Smith's concept of free trade was challenged immediately upon the book's publication. Indeed, while the urge to trade and barter may be an integral part of human nature, there remain significant barriers to international free trade. This paper examines some of those barriers, namely the institution of protectionist laws, political uncertainty in different countries and the lack of adequate infrastructure in many lesser-developed countries, such as roads and telecommunications.
Protectionist…… [Read More]
Also, the importation of technology from abroad exposes consumers and producers alike to the innovative use of vehicles, such as hybrid technology, that domestic producers can implement even better than the original manufacturer. Innovation is the ultimate driver of new sales and the creator of new markets and new markets means more jobs for workers.
Beginning a trade war by setting tariffs or limiting imports through quotas ultimately creates waste and more expensive cars for consumers. Giving domestic producers the ability to price their products artificially low through subsides encourages them not to innovate, a critical part of remaining competitive in a high-tech industry. It has been argued that American car manufactures are out of touch with the needs of car buyers and the needs of the environment alike, but isolating them through protectionism will only preserve company profits and jobs in the short run.… [Read More]
There are many arguments both for and against both free trade and protectionism. There are some that say that free trade should rule the day and that the market can regulate itself. There are others that suggest that the market is an immoral mess and/or that countries should be allowed to protect their national and economic interests if and when it becomes necessary. This report will talk about the pros and cons of each thought process and offer an overall opinion at the end. While free trade is generally the better course of action to follow, there are times and situations where at least some elements of protectionism are not beyond the pale.
Generally speaking, free trade is when trade is allowed to happen in an unfettered way. Rather than goods being blocked from crossing borders in the form of exports or imports, free trade is all about letting people…… [Read More]
According to the Office of the United States Trade Representative website, which is part of the Executive Office of the President, the United States has trade agreements with a total of twenty countries. Those countries are Austarlia, Bahrain, Canada, Chile, Colombia, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Israel, Jordan, Korea, Mexico, Morocco, Nicaragua, Oman, Panama, Peru and Singpore. Beyond that, there are also regional agreements such as the Trans-Pacific Partnership, or TPP for shot. There are currently negotiations under way to have a similar agreement which is called the Trans-Atlantic Trade and Investment Project, or T-TIP for short, with the European Union. Finally, there are broad-based agreements that involve free trade such as the North American Free Trade Agreement (NAFTA) and a few others that are noteworthy (USTR).
Benefits of NAFTA
As far as whether the NAFTA agreement benefits the United States, the answer…… [Read More]
North American Free Trade Agreement
President Clinton signed the North American Free Trade Agreement Implementation Act-NAFTA on December 8th, 1993. Canada and Mexico soon followed suit and the North American Free Trade Agreement became active from January 1st 2004 and thus became the first comprehensive free trade agreement among major industrial nations and a developing a country. (A dynamic macroeconomic analysis of NAFTA - North American Free Trade Agreement -- Economic Perspectives) Thus NAFTA was launched in January 1994, and thereby The North American Free Trade Agreement became the largest free trade area in the world. (Canada and the North American Free Trade Agreement)
NAFTA created the world's largest free trade zone, which had coverage of around 360 million people and an annual investment and trade in terms of C$500 billion. (Key Economic events: 1994- North American Free Trade Agreement (NAFTA): Creating the World's Largest Free Trade Area) This agreement…… [Read More]
Americans who want to open businesses in Mexico's cities would be able to do so easily, which would stimulate Mexico's economy as well as America's. Mexicans who want to live and work in the United States could do so without risking their lives and leaving their families. Quality of life would vastly improve in Mexico, and the improved economy would mean less strain on health care and other social services. During the current economic recession, unifying the two countries makes more sense than it ever has.
One of the best reasons to have a union between the United States and Mexico is to reduce rates of crime. Border towns are violent places, and law enforcement officials are often killed in skirmishes that involve organized crime. The United States and Mexico are both at fault for fueling organized crime. According to Donnison, "More than 6,000 people died last year in Mexico…… [Read More]
Free trade and the North-South divide
Globalization has been bringing along several concepts and ideologies and the concept of free trade has been growing in tandem with globalization though with several obstacles along the way. Basically, the meaning and context of free trade is a condition where international trade is facilitated making possible the exchange of capital, goods as well as services across international territories or borders without undue restrictions, conditions or controls. Free trade is significant for most nations since it significantly contributes to a good share of the Gross Domestic Product (GDP) of those nations. It is the type of trade that has been in existence for many decades and to date it is held as one of the most important kind of trade in facilitating the economic, political as well as social ties and interactions of nations of the world. Some of the aspect that facilitate the…… [Read More]
Of course, consumers knowing the country of origin of Toyota vehicles have done little to harm the dominance of that car over traditional American manufacturers like GM and Ford. But in some instances, if a particular nation has received bad press regarding its labor practices, mandatory labeling as an imported good might act as an additional invisible trade barrier. Also, if a nation is being subject to a particularly damaging round of international publicity regarding other aspects of its international policy, this may lead to a boycott of the nation's goods, and thus invisible tariffs can be constructed through simply the apparently innocuous policy of labeling nation's country of origin, in the supposed interest of consumer information.
Fliess, Barbara Carlos Busquets "The Role of Trade Barriers." OECD Trade Policy
orking Paper No. 45. Organization for Economic Co-operation and Development. 2006. 7 Mar 2007. http://www.oecd.org/dataoecd/34/25/37872326.pdf
Jennings, Horace. "Brazilian trade…… [Read More]
Significance of the Study
This study is significant because it sheds light on a very important contributor to local and international trade. Trade fairs have a long history in providing a meeting place for buyers and sellers. They are an important channel of communication for B2B buyers and sellers. This is a significant area for study because there are limited channels of communication between B2B buyers and sellers. The previous sections have diversified the importance of communication to trade. B2B buyers and sellers cannot use mass channels of communication such as television advertising or newspaper advertising. In this market usage of personal visits and demonstrations are the common channels of marketing and communication. The B2B selling and marketing activities are less highlighted in research than B2C activities. Therefore, this study is significant because it explores a very important channel of marketing and communication in the B2B market.
The study is…… [Read More]
Earlier studies based on Bretton oods data were only refuted because the data sets of the later studies were insufficiently long. It may be, therefore, that Himarios is one of many that will now be able to demonstrate that long-term equilibrium is possible. It may that it requires nearly at least three decades' worth of data and a multi-country study in order to see the equilibrium emerge, meaning that previous theories were simply not taking into consideration the time frames that would be required for production, wage and policy shifts to be implemented and have their impact on a nation's balance of trade.
Himarios' findings do suggest that externalities cannot be maintained. hile a single government can maintain consistent economic policy for decades seemingly regardless of the consequences (Cuba or North Korea, for example) a free economy cannot. Eventually a trade deficit will result in a workforce demanding jobs, for…… [Read More]
Trade Act of 1974 on Euro exchange rates?
Free Trade has been a key agenda for the past three presidents. In an expanding global market, tariffs and trade policies are more important today than they have been in the past. More and more countries are forming alliances such as the North American Free Trade Agreement (NAFTA), the Asian Alliance, and the European Union (EU). These trade agreements are meant to level the playing for all countries, both industrialized and emerging countries.
President Bush's trade policy is aimed at helping to generate American jobs, open markets to American products, and provide economic growth. Sometimes massive increases in imports can have a devastating effect on U.S. industries. [This has been the case for the U.S. steel Industry and is the issue addressed in Section 203 (B) (1) of the Trade Act of 1974. Foreign steel makers have had the luxury of government…… [Read More]
trade in Mexico. The writer explores the nation's dependency on the U.S. And presents plans to reduce that dependency and increase other options. There were five sources used to complete this paper.
As the world continues to globalize many of the previous boundaries that were experienced have been removed. This means advancements in technology, communication, manufacturing and other areas. Mexico is frequently accused of being too dependent on the United States. With the globalizing moves forward there have been many new horizons for the country of Mexico to explore regarding trade. educing its dependence on the United States and expanding its interdependence with other nations will provide Mexico with bargaining power when it comes to its dealings with the states in the future.
Within the last decade the trade abilities and clout in Mexico has improved significantly. Whereas Mexico used to be almost exclusively dependent on the U.S., the more…… [Read More]
Trade between the United States and Japan [...] trade between the United States and Japan, such as exports and imports of goods, exports and imports of services, tourism, and investments. Japan and the United States are two of the premier forces in trade around the world. The two countries depend heavily on each other in a variety of trade areas, from electronics to tourism and banking. Together, they form a formidable bond of trade that dominates the world market and the world economy.
In 2002, Japan's total foreign trade was 52,109 billion yen. The portion they traded with the United States was 14,873 billion yen, or 28% of the country's total foreign trade ("Yearbook," 2003). Conversely, the United States only trades about 9% of their foreign trade with Japan, so there has been a deficit between the two countries for many years. This seems odd since Japan is a smaller…… [Read More]
Trade Agreements and Negotiations on International Trade
Trade is important to countries all around the world. International trade opens up job opportunities and also leads to development of economic activity in every region of the trading country. The trading countries must also ensure that traders, whether self-employed entrepreneur, corporate executive or pensioner must bear the responsibility of making sure that goods and services are transported efficiently to global markets. The best way to advance in international trade is to work on two aspects namely, the Trade Commissioner Service, and also foster productive ways of negotiating and administering trade agreements and rules.
International Trade is defined as follows:
The law relating to the exchange of goods and services between nations. Legal issues can relate to tariffs and government restrictions on export and import, as well as the contracts between the trading partners." [LawyerLocator - Glossary of Terms]
The "old"…… [Read More]
Quintessentially, a tariff is a tax on goods that are transferred overseas. Those goods are either imports or exports; tariffs provide a degree of stabilization for the competition of imports and exports (Helpman and azin, 1978, p. 1131). Specifically, tariffs apply to merchandise that is imported or exported between different nations, regardless of their location. There are a number of different types of tariffs and variations on this concept as a whole. Tariffs are similar to customs duties, which are the indirect taxes which must be accounted for when goods are traded between countries. These duties can pertain to both imports and exports. Many people use the terms tariff and customs duty interchangeably. Tariffs function as a collection or listing of goods and typically contain the rate of the customs duty. That rate is generally the amount of the tariff, whether it applies to imports or exports.
In…… [Read More]
Intra-Industry International Trade
Standard trade theory and its deviations
The classical theory of international trade can be traced back to the founding father of capitalism Adam Smith: Smith's 1776 Wealth of Nations theorized that free trade would be beneficial to all nations. Smith stated that much like merchants, nations should specialize in the particular goods and services which they could produce most efficiently and trade with other nations who could produce alternate goods and services equally efficiently. Thus free trade resulted in advantages for both trading parties. Smith's theory was later fleshed out by David icardo in his Principles of Economics. iccardo stated that free trade could optimize efficiency for every country on a global level by reducing the inefficiencies generated by the excess resources involved in producing the goods and services the nation was not suited to produce (Sen 2010: 2).
This common wisdom remained relatively consistent…… [Read More]
There are significantly more trade agreements in the world than I would have predicted. A list of final agreements between the United States and individual countries indicates that the United States alone has trade agreements with nations ranging from Argentina to Zimbabwe, and an impressive number of other countries, including Canada, Brazil, Taiwan, ussia, Mongolia, Korea, Jordan, and Ghana (Foreign Agricultural Service). Other countries have similarly large numbers of agreements (Government of Alberta). Trade agreements in the future are likely to become more prominent, given the increasing pressures of globalization. As such, countries with reciprocal trade agreements are likely to be more economically viable than those that tend to isolate themselves from trade in an increasingly interdependent world.
International politics are linked closely to international trade. Often, it is difficult to distinguish whether politics or trade takes the lead in global affairs. As an example, many Western countries…… [Read More]
Despite the fact that it is considered to be responsible for the immense inequalities in the economic sector, it also provides the progress for least developed countries and the environment for the maintenance of the developed countries. The existence of trade blocks such as NAFTA or ASEAN are even more reasons to consider globalization as a means of improvement in terms of politics, economic, and social aspects of life.
ASEAN. N.d. About. 28 September 2011 http://www.asean.org/about_ASEAN.html
Ian Goldin, Kenneth einert. 2006. Globalization for development: trade, finance, aid, igration and policy . World Bank: Palgrave Macmillan, Washington, DC .
D Henwood, 2003. "Beyond Globophobia." The Nation .November 28 September 2011 http://www.globalpolicy.org/globaliz/define/2003/1113globophobia.htm
D. Held,. 2005. Debating Globalization . Polity Press, Cambridge.
Economic Policy, 20 (1) Spring, 72-84
Woods N. 2000a 'The Challenge to International Institutions'. Primary eading.
D Henwood, "Beyond Globophobia." The Nation .November 13, 2003. 28 September 2011
< http://www.globalpolicy.org/globaliz/define/2003/1113globophobia.htm??…… [Read More]
Intra-Industry International Trade: Benefits and Costs
Trade is brought about by specialization. People specialize in those goods and services that they can produce effectively, and since they cannot survive on only these, exchange their surplus production for other items that they need, but do not produce. There are mainly two types of trade in this regard; international and domestic. The domestic form of trade refers to the exchange of trade items (services and goods) within a country's borders. International trade, on the other hand, can be defined as "the exchange of goods and services among residents of different countries" (Chacholiades, 2006). International trade can take either of two forms; intra-industry or inter-industry forms of trade. Inter-industry trade is trade between industries, whereas intra-industry trade takes place within industries. Intra-industry trade, therefore, refers to the importation and exportation of same-industry items of trade (Gandolfo, 1998).
International trade has been on…… [Read More]
nature of U.S.-Mexican trade relations, it is difficult indeed not to think of the statement of Mexican President Porfirio Diaz at the turn of the last century, "Poor Mexico, so far from God, and so close to the United States." For Mexico does continue to seem to occupy a benighted position vis-a-vis its richer and more powerful neighbor to the north, a position that is in no small measure defined and continually recreated by the nature and mechanisms of international trade between the two nations. This paper examines the nature of the trade relations between the United States and Mexico in the light of several classical economics theories and models as well as in respect to recent developments in the wake of the 1992 signing of the NAFTA accord and the last decade's worth of increasing globalization.
Economic Theories and Models
We begin by discussing and summarizing some of the…… [Read More]
Application to International Trade
Evaluation of New Governance
Application of New Governance to International Trade for Free Market
In today's robust world, scholars as well as the think tanks and tools of democracy and beaurcracy have been using a term "governance" or good governance rather frequently. Where governance in needed in every aspect of corporate management and public administration, it is important to understand how the very concept of governance has evolved over time. Old theory of governance has been replaced by its contemporary version which can be seen as a pre-requisite for the free trade regime especially for exporters. Where the new governance theory has a considerable impact on international trade; its effectiveness in public and private sector cannot be ignored.
Background of New Governance
Over past two decades, public and private organizations have followed a path of evolution. 'ayner's aiders' and the '3Es' of economy, efficiency…… [Read More]
Reflection Paper – International Trade
There has been a lot of talk lately about NAFTA being put at risk – either the US wanting to pull out of the deal or to significantly re-negotiate its terms. Industries that either benefit from NAFTA or feel that they do not benefit are lining up to express their positions – the latest being the auto industry, which has generally benefited significantly from NAFTA's country of origin rules
This discussion makes one reflect on the objectives of trade policy in general. The entire point of trade policy is to expand the economy by leveraging comparative advantages. While there are high profile instances where Mexico has comparative advantage, and has therefore won some trade away from the United States, the US has the most number of products in which it has a comparative advantage, with Mexico the least (Mzumara, Chingarande & Karambakuwa, 2012).…… [Read More]
The primary advantage of trade, he argued, was that it opened up new markets for surplus goods and also provided some commodities at less cost from abroad than at home.
Mass perception of free trade in the United States is rarely positive. Immediately, people think of lost jobs and our growing trade deficit instead of the free trade promises of a higher standard of living brought about by the theory of comparative advantage and economies of scale. Therefore, many feel that free trade makes this country worse off.
Adam Smith (1723-90)." The Concise Encyclopedia of Economics. Available:
http://www.econlib.org/library/Enc/bios/Smith.html (Accessed 19 Feb. 2005).
David Hume (1711-76)." The Concise Encyclopedia of Economics. Available: http://www.econlib.org/library/Enc/bios/Hume.html (Accessed 19 Feb. 2005).
http://en.wikipedia.org/wiki/Mercantilist (Accessed 19 Feb. 2005)
David Hume (1711-76)." The Concise Encyclopedia of Economics. Available: http://www.econlib.org/library/Enc/bios/Hume.html (Accessed 19 Feb. 2005).
Adam Smith (1723-90)." The Concise Encyclopedia of Economics. Available:
http://www.econlib.org/library/Enc/bios/Smith.html (Accessed 19…… [Read More]
Marshall Executive Brief #3 Trade Policy Greece and France
This brief will discuss critical issues of trade policy, including global trade, global currency exchange, business strategy and operations, R&D, human resources, accounting and finance.
Global Trade and Currency Exchange
Free trade is a system where the governments of two countries do not discriminate between the imports and exports of the other country. In particular, free trade in the modern sense applies to tariffs and other trade barriers, or the non-existence thereof. Ricardo described free trade in terms of absolute and comparative advantage. Usually, this concept is described using a simplistic, fictional world in which there are two countries and maybe only two goods. In this example, countries should produce the good in which they have comparative advantage, and in doing so the two countries combined with have a higher aggregate output than if only the country with absolute…… [Read More]
intra-industry international trade within the standard international trade classification SITC6, which represents manufactured foods classified chiefly by material. The scope of this paper is limited to processed foods, and includes analytical frameworks from the gravity model, and classic approaches to product differentiation, product commoditization, pricing, and market structure.
eferences to market structures in the literature typically oversimplify the dynamics influencing the development of market types -- perfect competition, monopolistic competition, oligopoly, and monopoly -- and this tendency is exacerbated when the focus is on intra-industry trade. Further, the distinctions become considerably more obfuscated when companies that are in the same trade do business in both domestic and international markets. A global manufacturing strategy is the goal of most multinational companies, and rationalizing manufacturing strategies is an objective for nations, as well (Lee, 1984). For instance, assume that a country has the industrial infrastructure to produce canned beverages, but there are…… [Read More]
1. The question of whether agreements like OPT should be restricted and apparel retailers be allowed to import from the most cost-effective countries is a false dichotomy. The two are not mutually exclusive. If there is an OPT agreement within the EU, that does not force H&M to buy from EU nations; it simply gives them an incentive to do so. H&M can still trade with other nations, under whatever trade agreements exist between the EU and those nations. If India and China have competitive advantage in textiles, then they will win the trade. But by no means is H&M forced to trade within the EU.
The reality that even with an OPT agreement, EU producers still do not have competitive advantage – that India and China exist as lower-cost producers – certainly calls into question the value of having the OPT agreements at all. The agreements probably…… [Read More]
The same effect can occur for import industry. The prices of imported goods and commodities depend on how much the export market sells the commodities.
Applying the Situations in International Trade
As an administrative assistant, it is important to watch the international trading and market to gather enough information as to when it is ideal to invest or buy office goods and commodities for the company. An administrative assistant who has the responsibility to maintain proper conditions in an office environment always involves himself in buying of products for his company's use. Thus, applying knowledge in the current situations in international trade can benefit the company in terms of financial resources.
Trade Advantages and Disadvantages
etrieved on September 13, 2005, from Online. http://floti.bell.ac.uk/intee/Comparative%20advantage/tsld010.htm
The World Trade Organization (WTO). Advantages and Disadvantages.
etrieved on September 13, 2005, from Online. http://www.yementimes.com/article.shtml?i=875&p=opinion&a=2… [Read More]
Overall, fair trade is a great way to make sure that countries work together and help one another focus on developing and moving forward. Not all fair trade is fair, but most of the options given to people who want to see fair trade are better than what they would receive if they were not part of any particular fair trade agreements. People who are interested in fair trade and the Czech epublic's role in that trade have to consider that individuals and countries both have to play a role in whether trade is fair or whether there are problems with it that go deeper than WTO regulations. While the WTO is not the only organization that has anything to do with trade on an international level, it is certainly the most recognized. Because of the current strength of the Czech epublic and its ties to numerous other countries, the…… [Read More]
The Risk of Trade ith India
Over the course of the last decade, the once stagnant Indian economy had become among the fastest growing in the global community. The opening doors of free trade have made India a top destination for high-tech companies, a major service industry provider and host to countless foreign trade and production endeavors. However, just as its fortunes have improved with the proliferation of globalization, so too have its recent fortunes felt the decline of the global recession. As reported in an article from Businessline, Chennai, "due to the difficult financing conditions prevailing in the international credit markets and increased risk aversion by the lending counterparties, gross inflows of short-term trade credit to India declined in 2008-09 and this trend continued in 2009-10." (Anonymous, p. 1)
Still, India remains an economy rife with growth potential for foreign investors. An important factor in…… [Read More]
The cost to its economy is greater than just lost opportunity as it extends to further damage the credibility of a relationship which the public views as suspect, in accordance with Campbell's estimation.
The oversight of international regulation is undertaken by the orld Trade Organization, which brings the globe's free trade partners together to broker affairs of economic cooperation or contract. However, this has proved to be an agency with too diluted a focus to effectively maintain balance between such partners as Canada and the U.S. Campbell addresses most of the regulatory differences between the two nations as being historical and incidental in some ways, indicating that perhaps the inconsistencies are simply in need of concentrated attention. This notion accounts for the 2005 launch of a Trilateral Regulatory Commission, partnering Canada, the U.S. And Mexico in an agreement to acknowledge a central forum for regulation of trade discrepancies. Though its…… [Read More]
NAFTA and its affects on the Mexican foreign trade. The writer explores what NAFTA is and how it operates then outlines the way it impacts the Mexican foreign trade. There were six sources used to complete this paper.
NAFTA's Impact on Foreign Trade with Mexico
The North American Free Trade Agreement was put together in 1993 and provides agreed upon resolutions for its members when it comes to free trade boundaries and rules. The NAFTA allows its members to regulate things such as tariffs, import and export regulations and other issues that come up in the course of trade business between the nations. NAFTA had a positive impact on Mexico's free trade industry because it strengthened an already strong relationship between the United States and Mexico.
Several years before the NAFTA agreement went into place Mexico began working on its economic reforms to improve its trade business both locally and…… [Read More]
Knowing that international trade is by definition a national-level issue does not stop people from pointing out its flaws. Protectionism arises from individual or national interest, or to protect infant industries. Each of these must be recognized, however, as a distortion in the trade system, a negative action undertaken to achieve a non-economic goal (Friedman & Friedman, 1997).
In the case of many countries, the benefits of international trade are negligible not because the money does not come into the country, but because the money is siphoned out of the economy before it can do any good. Corruption and other inefficiencies in a market can negate some of the benefits of international trade, before the citizens of the country see the benefit. In order that citizens see benefit, they must have low taxation rates, receive public goods from their governments, or receive jobs from their companies. In short, trade will…… [Read More]
Intenational Tade Between Bahain and Saudi Aabia
This is a pape on Tade between Bahain and Saudi Aabia, focusing on how it affects thei intenational tade elations with special attention to OPEC, GCC and the Qata dispute. It uses 22 souces in MLA fomat.
Both Saudi Aabia and Bahain ae membes of the Gulf Coopeation Council along with Qata, UAE, Kuwait and Oman. Unde the GCC Ageement, pefeential taiffs apply among the membe states. Since independence in 1971, Bahain has essentially pusued a libeal tade and investment policy, and has integated its economy closely with those of othe counties in the egion, though the Unified Economic Ageement of the Gulf Coopeation Council (GCC).
Tade and economic gowth in Bahain is stongly affected by vaiations in intenational enegy pices. Real GDP gowth, as a esult, was slowe duing the 1990s compaed with the pevious decade, aveaging aound 3.6% annually since 1994.…… [Read More]
The orld Hunger organization (www.worldhunger.org) assertsthat there is a bias in international trade rules that favor developed nations. hy? Developed nations control the orld Trade Organization, according to the orld Hunger organization; and as to export items like pharmaceuticals, developed countries have shown "reluctance" to allow developing countries "to produce or import low cost generic drugs for major illnesses, such as AIDS" (www.worldhunger.org).
Another example of this alleged unfairness can be viewed in light of the U.S. Sugar Tariffs and Brazil. In the ashington Post (Jeter, 2003) it is explained that though the U.S. extols the greatness of free trade, it does not always live up to that rhetoric. The U.S. imposes a tariff of 244% on sugar imports "...above a small quote of duty free sugar imports" (Jeter, 2003). "hile Brazil has both plentiful and fertile land and available workers, the 244% tariff that the U.S. Government levies on…… [Read More]
S. inflation in check, even during economic boom times.
The debate about increasing protectionism in the U.S. boils down to a clash of cultural values. In the natural course of international trade, there will be those who suffer and those who benefit. International markets are amoral. Trade is conducted between nations with the intent of raising the standard of living for both, but this is on aggregate, not universally. As a result, jobs losses in some sectors, particularly those where the U.S. does not have comparative advantage, are inevitable. To enact protectionist measures to stem those job losses will have three negative impacts.
The first is retaliatory trade measures. Tariffs and other protectionist measures tend to go hand in hand. If a country protects its industries, nations that trade with that country will do the same. This is the classic Smoot-Hawley scenario. To protect American jobs during the…… [Read More]
China Trade Policy
China's agricultural trade policies are driven by its need to feed its massive population. The country has quotas that average 15.8%, with 5.8% of products being duty free and 1087 total tariff lines. These duties sit in line with EU levels, above U.S. levels and below developing world levels. China aims to reduce its agricultural tariff below 15% in the coming years. China supported India's stance on special safeguard mechanisms at the Doha Round, effectively scuttling the deal.
China's manufacturing tariffs are also above developed world levels but below developing world levels. China's tariffs vary significantly on a country-by-country basis; for example 45.4% of non-agricultural trade with the U.S. is duty free. China has become more aggressive with respect to its trade policies in recent years, but generally works within the confines of the TO dispute resolution mechanism..
China has long worked to lower agricultural…… [Read More]
In the real world, most markets are far from fully competitive, labor-productivity within a country varies over time and full employment is just a dream in most capitalist economies. (Suranovic 1997)
Given the list of such 'unrealistic' assumptions made in the model, it is easy for us to dismiss the results of comparative advantage altogether or to accept it with a large dose of skepticism. But would such dismissal be justified? It is prudent to remember that almost all economic theories operate under a large number of 'unrealistic' assumptions that do not apply to the much more complex real world. In fact, we deliberately simplify the variables in economics in order to be able to construct models and to carry out analysis. Such simplification does not make all economic analysis redundant. It should also be remembered that comparative advantage and international trade would work to the benefit of all individuals…… [Read More]
Mercantilism as a philosophy may be dead, but special interests that lead to trade controls are alive and well (Mercantilism today: how a dead philosophy comes back to life, 2003). Trade controls that affect price and indirectly quantity include tariffs, subsidies, arbitrary customs-valuation and special fees (Daniels, Radebaugh, and Sullivan, 2007). Trade controls that directly affect quantity and indirectly affect price include quotas, voluntary export restrictions, "buy local" legislation, arbitrary standards, licensing arrangements, foreign-exchange controls, administrative delays and requirements to take goods in exchange for selling (Daniels, Radebaugh, and Sullivan, 2007).
Finally, businesses must also consider trade organizations and regional economic integration when deciding where to conduct business. The World Trade Organization promotes trade liberalization and mediates trade disputes and enforcing agreements (Daniels, Radebaugh, and Sullivan, 2007). Major regional trading groups include the European Union, the North American Free Trade Agreement, the Central American Common Market, the Caribbean Community and…… [Read More]
Thus, free trade keeps costs lower for consumers and leads to more efficient production. However, there are exceptions to unabated free trade. Most notably, national security dictates restrictions on the sale of military goods to unfriendly countries. Also, one needs to consider appropriate responses to other countries who do not engage in fair trading policies. Recently, the U.S. has seen huge losses of jobs and a redistribution of wealth to Asian countries such as China and India. Perhaps some form of protectionism might be useful to give time for the U.S. time to make plans to deal with the situation.
Comparative advantage and absolute advantage. EconomicsInteractive.com. Retrieved at http://www.unc.edu/depts/econ/byrns_web/Economicae/Essays/AS_Comp_Adv.htm
Wallenius, H. International economics. http://www.tuta.hut.fi/studies/Courses_and_schedules/Isib/TU-91.2011/lecturenotes/Lecture_4.ppt#256,1,3INTERNATIONAL TRADE POLICY… [Read More]