International Trade

2020-05-07 10:29

International Trade

International trade in a broad sense covers all the activities of the exchange of commodities and other products of human labor. In order to achieve success in the world market, any state must have its foreign infrastructure that can ensure the promotion of goods or services from producer to consumer in other countries. The primary purpose of state regulation of foreign trade is to create an enabling environment for expanded playing at home. In the course of its implementation, there is a contradictory mix of protectionism and liberalism.

The development of international trade has posed new challenges for managers. In order to enter new international markets, managers should first of all make an analysis of the business climate in that country and clarify whether this nation is relatively favorable for conducting business or not. The next issues that need to be taken into account are legal regulations of export and import. In addition to this, there should not be any strong cultural objections to buying that nation’s goods. The other quite important thing is satisfactory transportation facilities. Moreover, there should be import channel members that have a possibility to handle import shipments from the exporter’s area. The last but not the least is the availability of foreign exchange to pay for the exports. International trade manager should have proper knowledge about the very theory of international trade in order to use it efficiently in practice. The analysis of international trade theories must take into account two circumstances: the economic resources (material, natural, labor and others) that are unevenly distributed between countries and effective production of various goods that require a combination of various technologies and resources. Additionally, it should be noted that economic efficiency of each country that is capable of producing a variety of products may vary.

According to some experts of the, free trade leads to positive political consequences, as in this case, countries are increasingly interdependent and thus reduce the danger of hostile action in relation to each other. The policy of free trade allows states to get the biggest benefit from international economic exchanges in the more economically developed countries. However, it is never ever used in its pure form. The example of extending the borders of free trade could be different integration agreements. Even the European Union is going to collaborate with the USA in order to take “step forward in the reindustrialization of the United States and the rebuilding of European competitiveness — both of which would be welcomed throughout the world.

On the other hand, there are some advantages in protection policy. First of all, it is the protection of young industries. In some cases, protectionism can only save nascent domestic industries that are not able to compete initially with foreign companies either in price or quality. In addition to this, one should not forget about the fact that some of the revenues from customs duties and tariffs have a solid share of all revenues to the treasury. Another advantage of protectionism is a reduction of unemployment. In the event that competitors crush national companies, many people will lose their jobs. Furthermore, it is a proper tool for security because some branches are strategically important to the state and should not be controlled by western companies. For instance, the World Trade Organization reported an increase in barriers to trade. It was said that the share of protectionist measures put in place by Group of 20 economies has climbed to 79 percent today from 60 percent in 2009.

In conclusion, it can be said that the current condition of international trade is quite unstable, and the development of international trade is controversial. The current situation has the two interrelated trends: the desire to liberalize trade and reduce trade barriers and increased protectionism and attempts to restrict the access of goods "outsiders" in their markets. A foreign trade policy is based on the abovementioned trends. Moreover, modern international managers should conduct a full analysis of the state regulations on the markets a company is going to enter.



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