The paper 'Methods and Motives of Government Trade Interventions' is a great example of a Macro and Microeconomics Case Study. The recent changes in the business arena have made most governments to form global links. The countries most of which were initially independent economies have thus become part of the globalized economy. The transformation of the individual country economies has been so dynamic that most countries have been lagging behind in globalizing their businesses (Sam, 2014). However, these countries have been faced with the threat of a financial crisis that is unpredictable and has many downsides.
The governments are very much able to have control over the trade that transpires within and beyond their borders through a variety of ways that shall be discussed in this paper. When the governments intervene the key interest is to protect the population of the country as well as the economy from any adverse effects such as recession (Sam, 2014). Most countries have used this silent weapon to their advantage as well as to guard the influence of globalization that is always felt at the domestic levels.
This paper explores the various motives the governments have when intervening in international business. The paper also evaluates the positives and negatives associated with each method of government intervention in trade. Motives for Government Intervention in International Trade Free trade has long been allowed by most governments thus allowing imports and exports to cross the bordered of countries without any trade barriers (Bissa, 2009). However, most governments have realized that it is important to intervene in international cross border trade so as to guard the political, economic, and cultural interests of the country.
Politically, the government intervenes in the trade so as to protect national security (Taras & Gonzalez-Perez, 2014). According to Bissa (2009), every nation must ensure that some of the core industries that the economies of such countries depend on are shielded from interference by other countries. These industries include the weapons, electronics, mining, and air transport industries that bring a lot of revenue to the respective governments (Taras & Gonzalez-Perez, 2014). When the resources for these industries are widespread in the country, the government restricts imports that would otherwise jeopardize the exploration of resources in the country.
Some countries like Japan that have fewer energy reserves thus have to ensure that the import of the commodity is assured so as to ensure natural security. The second reason why governments politically intervene in trade is to guard unfair trade practices. The principal reason behind this form of intervention is to protect the consumer’ s rights in the respective countries (Sam, 2014). Steers and Nardon (2014) insist that most Middle East and Asian countries such as India, no longer order apparels from china because they are reeled under severely acute respiratory symptoms conditions (SARS) prone conditions.
Governments also intervene so as to prevent high brain drain rates that have been the cause of slow economic progress (Goldstein, 2007). The governments also protect trade so as to reduce the gap between the jobs available and the unemployment rates (Taras & Gonzalez-Perez, 2014). To effectively do this the governments engage methods that result in job creation and protection of the existing jobs in the nation.
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