However, on the other hand, as much as the world trade organization has been committed and determined to form the CNS of trade and commerce for its member countries through policies, it has been exceedingly hard as national interests and policies override the organizations’. This has subsequently hampered the organization’s pursuit to equal development between member states. The concept of FDI has not been fully harnessed due to the complexity found within the concept. It has been felt that host countries have been the key beneficiaries of FDI at the expense of the investor’s country. Profits are ploughed back within the host country’s economy as investors pay licensing fees and other charges to the authorities of the host country with little to plough back to their mother countries.
Secondly, in order to better understand the implications of the political arguments for trade it is essential to highlight the main instruments of trade policy (See appendix 1). Political arguments for trade intervention are mainly concerned with protecting the interests of certain groups at the expense of other groups. Most of the time domestic firms benefit from this, while customers suffer the consequences. One of the most cited arguments for intervention is that of protecting jobs and industries from unfair foreign competition (Hill). While industries like aerospace are protected given their importance for national security, job protection appears as a result of unions and industries putting political pressure given the threat of more efficient foreign firms (Hill).
There are many reasons for which governments decide to interfere in the trade of goods and services. Those reasons can be economic, cultural or political. They often choose to involve themselves because the society’s economy is performing worse than expected. There are ways governments can intervene to help their nation such as inflicting different trade barriers, the common ones being tariffs and quotas. First of all, one of the ways a government can help its nation is by imposing tariffs.
Business is one of the factors that shapes the competition of a country economically, political and socially. Countries normally want to enter into pact with countries that they believe can benefit them symbiotically in terms of trade (Chang & Winters 2002, p.899). However, trade among countries can also take shape with regards to the region; this is where the trading blocs come in. Trading blocs are attributed by two principle characteristics, that is; the reduction or removal of trading barriers and effective unfairness in a sense that such kind of liberalization between member states does not extend to nations outside that trading bloc. In light of these realizations, this essay assesses four major things which include describing six types of economic integration, research on the Gulf cooperation council, discuss three benefits and three costs frequently associated with adoption of Certificate of Origin scheme.
27-41. Sachs, J. (1992). “The Economic Transformation of Eastern Europe: The Case of Poland,” The American Economist, Vol. 36, No.
In international trade today, foreign enterprises enter new markets and try and compete with existing domestic brands. In markets where an enterprise has a sole monopoly, this creates implications for that one business and it must modify its tactics and procedures to the situation. This essay will identify the monopoly in a market and briefly explain the main measure used to reduce monopoly. Furthermore, it examines the influence of foreign competition on monopolies in a market and how they must respond and act in such circumstances. Lastly, the measures that governments take in order to control and protect its domestic markets from foreign competition will be explained.
The difference between international and domestic trade According to Malcolm (2014) there are several significant differences between domestic and international trade. These differences often have to do is the imposition of tariffs and other charges, how the goods are moved between the buyer and seller, how the buyer goes about paying for the goods and shipping , and even the type of insurance that must be secured as part of the business deal. By knowing these differences can allow buyers and sellers to partic... ... middle of paper ... ...t international trade still allows for inefficiencies that leave developing nations compromised. What is certain is that the global economy is in a state of continual change, and, as it develops, so too must all of its participants. Besides that International trade encounters a variety of obstacles which reduce trade incentives.
(1961). A Theory of Optimum Currency Areas. American Economic Review, 51(4), 657-665. Polito, V., and Wickens, M. (2014). How the Euro Crisis Evolved and how to Avoid Another: EMU, Fiscal Policy and Credit Ratings.
This allows domestic governments to hold on to some authority over trade alongside policy-making space. Free-market trade going unchecked through hyper globalization would present a problem because people undermine the regulations that citizens are so used to being protected by. This would lead to a problem concerning legitimacy. One solution would be to impose a set of regulations among all countries, but that would be advantageous to some and disadvantageous to others, making it an unfair solution. Creating policy-making space provides governments with some ability to keep trade legitimate as globalization expands.
In the liberal point of view, the government should not be involved in the economy unless it is to correct market fa... ... middle of paper ... ...e equal and have equal opportunity to enter agreements that are most beneficial or profitable to them. However, in reality, negotiations often follow an agenda set by the developed countries, primarily the Quad which consists of the United States, the European Union, Canada and Japan. These members, along often dominate the negotiation table. Furthermore, states have unequal capacity to handle disputes. Strong states always hold power over the weaker ones, especially the developing states that rely heavily on foreign direct investment to build their economy.