International business

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Recommended: Protectionist policies of developed countries

Protectionism in the global economy

The global economy has seen a dramatic increase in services trade between countries. The regulation and monitoring of service trade between countries has become much harder. As highlighted by Johnson, trading in services was the fastest growing constituent of global trade during the 80’s and 90’s. Cross border transactions include anything from banking to software. When services are offered to another country, the provider has to interact with the customer through either, cross border communications, movement of the provider or the consumer moving to the supplier’s state of residence. Technology has made international trade much easier and more feasible; this has lead countries to boost services being exported to other countries. IT has decreased the cost of communication between countries. As a result it has made it more feasible for businesses to introduce new products and modify services abroad. This spark in global trade of services has its downfalls. The liberalization of services goes against certain countries’ development strategies. Areas like health and education needs the provisional planning of governments. The interference from abroad has hindered the governments’ strategic planning with respect to these services. This takes us to the importance of regulating services coming in from abroad through protectionism. Regulations on services can be a burden on service providers which can consequently weaken the liberalization of tr...

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