Benefits of international trade pdf

Since the United States is one of the powerful players and controls the international trade industry predictions have been made that after the recession in the near the global exchange rate would depreciate. The decline of US dollar would have a great impact to other countries involved with international trade for the competitiveness and a sustainable investment.

Factors that are affecting international trade include pattern of global capital flows from US to elevate cash for redemptions and the foreign investors have changed their equities into a more stable income with countries like the United States. It is shown in Figure 1 that all countries have been affected by the global financial crisis in Figure 1. Global financial crisis: Losses and Bailouts for US and European countries in context in trillion dollars, Source: BBC Bloomberg.

Law of Supply and Demand Also, developing countries believe they get a raw deal when it comes to international trade. Another problem arises when it comes to rights. The exchange of goods and services can easily be infringed or copied.

A financial website Export. Together with the advancement in information technology come the problems along with it as well. Business firms need to cope with other competing companies with the advancement and development of their communication technologies for international trade transactions. As a consequence of these changes, economic analysis of networks has proven that the relationship between trade and communication networks is highly significant.

Since the process of trading internationally deals with making transactions globally the communications cost is higher compared to local networks for international trade uses a worldwide common network services. Solutions The international trade policies are implemented in order to facilitate in a better trading industry.

Since the top players in the globe are the ones who are controlling these policies it is only favorable for all countries involved in the international trade industry that fair policies should be implemented.

This goes out to the countries that control the industry in terms of tariffs, economic policies, income, copyright policies and infringement, online transactions, advancements in technology, sustainability and the development of countries coping up with the trade industry. It would only be fair to include the developing countries in making decisions most especially if involves them as well. It has been established earlier that some countries only rely on international trade to increase their GDP therefore it would only be fair to them to implement just policies.

Different disagreements and misunderstandings have caused fall outs between existing countries in the industry and this can be minimized if WTO would be able to implement the agreement properly and not to be controlled by US and European countries only. Conclusion Therefore, the international trade paved the way for global transactions and increase in market profitability. With this, numerous benefits have been gained by different countries participating in the trade industry.

Benefits include increase in GDP sales and profits, development of quality products and services, market profitability and market size. International trade also extends potential of the existing products, gaining a global market share and reduces the dependence on existing markets. These benefits however, have problems along with it. As mentioned earlier, the international trade industry would be able to minimize certain misunderstandings and disagreements with the proper implementation and fair international trade policies.

The advancements of technology enhances the communication process in doing international business transactions thus different countries participating in the international trade has the need to cope up with the changes in the trade business environment.

The only way international trade would be fair for all is if all the countries had a level playing ground, if all factors were standardized then the potential theoretical benefits of international trade are immense, it would be possible for all countries to benefit and contribute to setting terms of trade; but for now the developed nations are the biggest gainers and the developing nations continue to struggle to reap the benefits of international trade.

References Albercht, M. International trade statistics World trade organization. Global financial crisis: Losses and bailout for US and European countries in context. Take a closer look at bloomberg.

International trade law. New York: Cavendish Publishing Limited. Cohen, B. International trade and finance: New frontiers of research. United Kingdom: Cambridge University Press. Help with trade problems. Advanced international trade: Theory and evidence. New Jersey: Princeton University Press.

Grossman, G. Handbook of international economics. Oxford: Elsevier Publications. Harrigan, J. Handbook of international trade Vol. United Kingdom: Blackwell Publishing Ltd.. Hata, P. Benefits of international trade. What is international trade? International trade administration office of industry analysis. Information technology and international trade: Resources for the modern exporter.

New reflections on international trade. USA: Cameron. Weeks, R. International trade issues. World Bank. November, Globalization and international trade Chapter12, pp. Related Papers. By Tilman Altenburg and Claudia Assmann. Renewable energy as a trigger for industrial development in Morocco. By Georgeta Vidican Auktor. Wave of Anti-Globalization. By Dr. A typical example is the shoe and leather industry in Italy.

Italy is not only successful with shoes and leather, but with related products and services such as leather working machinery, design, etc. Firm Strategy, Structure, and Rivalry The conditions in a country that determine how companies are established, are organized and are managed, and that determine the characteristics of domestic competition Here, cultural aspects play an important role. In different nations, factors like management structures, working morale, or interactions between companies are shaped differently.

This will provide advantages and disadvantages for particular industries. Typical corporate objectives in relation to patterns of commitment among workforce are of special importance.

They are heavily influenced by structures of ownership and control. Family-business based industries that are dominated by owner-managers will behave differently than publicly quoted companies.

Porter argues that domestic rivalry and the search for competitive advantage within a nation can help provide organizations with bases for achieving such advantage on a more global scale. Adam Smith first described the principle of absolute advantage in the context of international trade, using labor as the only input.

Since absolute advantage is determined by a simple comparison of labor productivity, it is possible for a party to have no absolute advantage in anything; in that case, according to the theory of absolute advantage, no trade will occur with the other party. Sometimes, they are initially willing to pay a high price for that advantage. For example, U. The following questions pertain to the foundations of modern trade theory and comparative cost of production and pricing decisions:.

Free trade refers to the elimination of barriers to international trade. The most common barriers to trade are tariffs, quotas, and nontariff barriers. A tariff is a tax on imports, which is collected by the federal government and which raises the price of the good to the consumer. Also known as duties or import duties, tariffs usually aim first to limit imports and second to raise revenue.

A quota is a limit on the amount of a certain type of good that may be imported into the country. A quota can be either voluntary or legally enforced. A tariff is a tax on imported goods, while a quota is a limit on the amount of goods that may be imported. Both tariffs and quotas raise the price of and lower the demand for the goods to which they apply. Nontariff barriers, such as regulations calling for a certain percentage of locally produced content in the product, also have the same effect, but not as directly.

You may wonder why a nation would ever choose to use a quota when a tariff has the added advantage of raising revenue. The major reason is that quotas allow the nation that uses them to decide the quantity to be imported and let the price go where it will. A tariff adjusts the price, but leaves the post-tariff quantity to market forces. Therefore, it is less predictable and precise than a quota. The effect of tariffs and quotas is the same: to limit imports and protect domestic producers from foreign competition.

A tariff raises the price of the foreign good beyond the market equilibrium price, which decreases the demand for and, eventually, the supply of the foreign good.

A quota limits the supply to a certain quantity, which raises the price beyond the market equilibrium level and thus decreases demand.

Tariffs come in different forms, mostly depending on the motivation, or rather the stated motivation. The actual motivation is always to limit imports. For instance, a tariff may be levied in order to bring the price of the imported good up to the level of the domestically produced good. This so-called scientific tariffwhich to an economist is anything buthas the stated goal of equalizing the price and, therefore, leveling the playing field, between foreign and domestic producers.

In this game, the consumer loses. Social and Cultural Differences With 20 different languages, difference in language as well as cultural rules, values, attitudes and behavior makes it difficult to the potential entrepreneur. Feelings of exasperation, aggravation, annoyance, uncertainty and anxiety remain.

In some cases, people are aware that they are experiencing feelings of alienation, while in other cases, the process occurs under the surface. Language is an issue that plays a part of the adjustment process. Economics Differences There is not a noticeable difference in economic differences as seen in the social and cultural differences.

Though rich in minerals, the majority of diamond and gold production has been smuggled abroad. The economic infrastructure nearly collapsed due to corruption, neglect, and war-related disruptions.

Legal Differences In the United States you have the right to sue, but it becomes a different story when you look further down South. You could win bout any case as long as the price is; just knowing the right people is the key. For example you want to set up a mining and export business, but have enough money to make the Chairman of the Government Gold and Diamond Office GGDSO smug, though you don't either requirements of having a back account and office, he'll look the other way, and keep asking when he gets a little pressure.

Political Differences The government controls everything, though they claim to have a democratically elected, no business will start before "visiting" the "elders". Without greasing the palms of every top official involved, you will be up for delays in processing and have a real example myself with purchasing licenses for a mining and wholesale trade, it still isn't finalized. The fees especially for foreigners who have no connections is discouraging as in addition to all the legal fees, still have to make a "gift" to those in charge so things will flow easily.

Conclusion Coping techniques for cultural adaptation and adjustment include stress release and stress management. If you consider doing business in Sierra Leone or any other country for that matter, just need to be aware of the culture of origin and find ways to deal with stress.

Have the right connections especially for a business like precious stones and metals, to keep the people who matter content. Open navigation menu. Close suggestions Search Search. User Settings. Skip carousel. Carousel Previous. Carousel Next. What is Scribd? Explore Ebooks. Bestsellers Editors' Picks All Ebooks. Explore Audiobooks. Bestsellers Editors' Picks All audiobooks. Explore Magazines. Editors' Picks All magazines. Explore Podcasts All podcasts.

Difficulty Beginner Intermediate Advanced. Explore Documents. Advantages and Disadvantages of International Trade. Uploaded by Nainesh Pandare. Did you find this document useful? Is this content inappropriate?

Report this Document. Flag for inappropriate content. Download now. For Later. Related titles. Carousel Previous Carousel Next. Changes and Innovations adopted in different Public Sector Org. Becker, B. High performance work.

Jump to Page. Search inside document. Advantages and Disadvantages of International Trade: Advantages: The main advantages of international trade to a country are as follows: i Economy in the Use of Productive Resources: Each country tries to produce those goods in which it is best suited.

The following questions pertain to the foundations of modern trade theory and comparative cost of production and pricing decisions: Barriers of imtermatiomal trade Free trade refers to the elimination of barriers to international trade.

EconoTalk A tariff is a tax on imported goods, while a quota is a limit on the amount of goods that may be imported. EconoTip You may wonder why a nation would ever choose to use a quota when a tariff has the added advantage of raising revenue. Munna Ahmed. Vaibhav Rolihan. Haris Riaz. Rezaul Huda. Mohi Asad. Amir Pandit. Dungani Cheembo. Faizan Tafzil. Zezinho Andrada. Beth Kimathi. Ha My. Marvin Alleyne. Rosalynn Alvarez. Mridul Yadav. Ankit Jethani. Mathumitha Muniappan.