The International Trade between Economies - Coursework Example

Economies undergo different phases of a business cycle and the ability to deal with the different financial needs increases the operational efficiency. Economies due to globalization have come together and look to work as a single unit where no international boundaries refrain from trading with each other. The development of international boundaries have provided different benefits but at the same time also increased the different complexities. This has also resulted in creating a situation where economies are looking to gain from international trade despite having different barriers and restrictions which have an impact on the overall trade relations. The ability of economies to come to a common understanding and remove the different trade barriers have yielded effectiveness and have ensured that the society on the whole benefits. This essay thereby focuses on international business and looks to identify the manner in which international trade has created different barriers and the different mechanism which will help to remove those barriers. The overall focus will thereby lie entirely on creating and developing a mechanism through which economies are able to gain from international trade and the society and the common people are able to gain. International trade provides an opportunity for both the developing and the developed countries to ensure that they are able to work on their strengths and competitive areas of advantage but would require that they understand the different areas through barriers can be removed. Working and developing strategies which focuses on removing the different barriers and creating an environment where economies are able to carry out free trade with one another will ensure that economies prosper (Engargio, 2007). This would also create an opportunity through which the different needs and requirements would be better understood and would provide a framework which would help the economies to understand the different environmental needs in a better way. This calls for an urgent need to develop strategies which are aimed towards improving the overall condition of the economy so that people who enter into trade with one another will be able to gain from it. The opening of the market has given a boost to trade and economic growth all around the globe. Despite the different benefits which accrue towards the business yet the presence of tariffs in the form of taxes continues to remain one of the key concern while looking to enter into trade relations. Reducing the different obstacles will help to multiply the gains and ensure a better future with better growth rates. OECD believes that reducing the tariffs on merchandise and trade by 1% will help to increase the world wide trade by $160 billion which is around 2% of the GDP of some developing and underdeveloped countries. This would be a huge boost to the economic growth for all economies and would provide an impending effect through which business economies will prosper (Lasserre and Schutte, 2006). The impact will be stringer for the developing countries as it will provide the people with better products at lower prices and will help to develop a culture where the society is able to gain from the different trade which takes place between nations. The reduction of tariffs will have a significant gain and effect on underdeveloped and developing countries as it will provide access to different goods and services at a lower cost. This would help to multiply the investment avenues and would also open up the market through which the overall gains for the business will be increased. One of the major barriers in the direction of international trade is the tariff barriers in the form of taxes which is imposed by importing countries and would have an impact on the overall purchase by countries (Simon, 2009). Tariffs have an important influence on trade patterns as increase tariffs results in making the products to be expensive which thereby would have a negative impact on the imports. This at times is also related to the price of the product as it tends to protect companies from competition by ensuring that a higher price for the goods and services is charged (Iivari, 2008). This would thereby help to remove monopoly business and would tend to develop a competitive market structure where the different market needs and requirements helps to understand the manner in which society will gain. While looking at a more detailed overview on tariffs it is seen that the tariffs on agricultural products is much higher compared to industrial products despite the different diversity being present among countries. The problem compounds when the tariffs are coupled by quotas. For example suppose the government imposes a 10% tariff on the first 100 ton imported and then increases the tariff to 100% puts additional pressure on prices due to the quota system along with the tariffs. This results in multiplying the complexity of the problem and makes it difficult for business to engage into international trade and increases the risk for the business. Economies look towards different ways to protect their domestic industry and ensure that they face little competition but at times also lead towards a situation where the different sectors are not able to deliver according to the international standards. This is an aspect which creates additional pressure and burden to carry out the different activities and needs to be properly examined and understood so that a work culture which ensures better growth is developed. Economies all around the world have taken steps to reduce the tariffs and quotas but to a limited extent. The increasing problem is being witnessed in developing and underdeveloped countries where the overall prospect of trading between countries has been affected. Economies all around the world needs to come to a common understanding and need to completely abolish the tariffs and quotas so that free international trade takes place between nations (Peng, 2011). A step which economies can take into direction is to look toward entering into negotiations with one another and developing different partnership and contracts which supports and allows free trade. Even coming to a significant decision involving a particular decision like have a common rule for ASEAN countries would promote and provide the freedom through which international trade will take place. The different directives and steps will help to provide conclusive direction and effect through which economies will be better off from trading with one another and will be able to gain and increase effectiveness in the different activities which is being carried out (Sirkin, Hemerling and Bhattacharya, 2008). Reducing the tariff barriers will help both the developing and developing countries as it will provide more choices and opportunities both with regard to products and price. This will help the economies to take advantage of the string points which economies have and would be thereby able to gain a comparative advantage (Bernhofen, Daniel and Brown, 2004). This would help the economies to ensure that working in trade relations between economies will multiply the effectiveness and will help to improve the overall trade relation. Reducing the tariffs barriers and quotas will help to ensure that economic and social cost gets reduced and will thereby ensure that the trade relations between the economies improve (Morrison, 2011). The different potential gains will help to multiply the effectiveness and ensure that the different gain which accrues to the economies ensures maximum gains and helps the economy to perform better. This will ensure correct pricing and quality products which would tend to ensure that the society is able to benefit from the different transaction which takes place. This will help to develop a culture where economies get the correct product at the correct prices and the society on the large is not exploited thereby ensuring proper returns for all (Schaffer, Agusti, Dhoge & Earle, 2012). In addition to the different tariff barriers which are present when economies enter into international trade economies also encounter non tariff barriers and other quantitative barriers on exports and imports. The different importers and exporters apart from the different quotas and tariffs have to deal with different difficulties like product standard, conformity assessment and other behind the door policies which are implemented by the government (Irwin, 2005). This has multiplied the complexities for international trade as the different non tariff barriers takes different forms and is not transparent which at times might make it difficult to understand the form it will take. This thereby makes it difficult to develop strategies to encounter those non tariff barriers as new barriers come up every time and the exporters and importers have to take action with it regard so that the different requirements and conformity are delivered for better and superior performance and growth rates (Stiglitz, 2002). The different non tariff barriers comprises of other tariffs which is different from the one which distorts the business trade and aims towards different conformity requirements. The list for non tariff barriers is continuously increasing and since it cannot be readily measured it makes difficult to develop strategies through which better measures and effectiveness can be gained (Hisrich, 2010). Non tariff barriers are at time linked to different consumer protection requirements and require special conformity and efforts from economies so that the different needs and requirements are met (Shaoming, Daekwan & Cavusgil, 2009). To deal with the issue it is imperative that economies which have both the exporters and importers develops and supplies products which matches the international standards and requirements. This would require that economies engaged into international trade looks at understanding the different non tariff requirements which is being presented by the importing countries (Smith, 2007). Being able to confirm with the different needs and requirements will ensure that the business will be able to provide the correct products and services and would help to deal with the different non tariff barriers through which better international trade among economies will take place. In addition to it economies engaged into international trade also have to deal with the issue of complete prohibition and ban on different products and services after they surpass the determined quotas. Economies look towards an outright ban on products and services after a certain designated quotas so that the domestic economy can be protected. This is an aspect which needs to be honored and steps have to be taken by economies to ensure that no actions or unjust treatment is done while looking to supply different products and services. Prohibitions are also put in place due to different reasons like protecting the environment and human safety and health (Onkvisit & Shaw, 2009). It is seen as a common phenomenon that economies reject and put a ban on goods and services which have been produced unjustly through labor exploitation, environmental harm and so on (Daniels, Radebauch and Sullivan, 2011). This type of prohibitions and bans are gaining prominence and is an aspect which is done to ensure that the society on the whole benefits and the different prohibitions helps to bring a change in the outlook through which business would be able to gain effectiveness. To deal with this issue it is imperative that economies look to produce goods and services through means which are correct. This would ensure that no economies would reject products or services through ban and would provide a conducive environment through which the society will be able to gain and would ensure that the overall effectiveness is multiplied (Tian, 2007). This would ensure that economies are able to gain from international trade and are able to create an environment which would help to multiply the manner in which different services are provided. International trades between countries are also affected due to the different procedural barriers which economies have to encounter in relation to the different customs, clearance and handling process. The increasing complexities and tightening of custom laws and rules after the Sept 11 terrorist attacks have increased the burden on the business. This has led towards increased and unnecessary delays for product approval, certification and other legal aspect which has made it difficult for the exporters and importers to carry out trade between each other (Doole & Lowe, 2012). This has been coupled with the different non tariff barriers and made it difficult to enter into trade thereby requiring that a process which will look towards proper identification of the different requirements have to be properly understood (Bhide, 2009). Economies to deal with the issue needs to simplify the process of custom clearance and handling process so that better trade takes place. In addition to it economies also need to look at reducing the different non tariff barriers and have to develop policies which are aimed towards free trade (Adekola and Sergi, 2007). This would be a boost to the entire region and would provide an opportunity through which the developed and developing countries will be able to come together and look towards a comparative advantage so that better growth rates can be ensured. The process has to look towards maximizing the different gains by working on the different directives and areas through which overall productivity improves and economies are better off by trading with one another. The international trade between economies thereby faces different barriers and restrictions which needs to be examined and understood so that economies are able to come to a mutual consensus which would provide an opportunity for economies to grow. Removing the different obstacles and barriers would provide the required direction through which economies will be able to work on their strengths and ensure better gains through international trade. Hs requires creating an environment which fosters free trade and ensuring that the overall relation between the economies improves so that the effect can be witnessed in all directions and would provide an opportunity through which economies will prosper. References Adekola, A. and Sergi, B. (2007) Global Business Management: A cross-cultural perspective, Aldershot: Ashgate Publishing Limited. Bhide, A. (2009) The Venturesome Economy: How Innovation Sustains Prosperity in a More Connected World, New Jersey: Princeton University Press. Bernhofen, Daniel M. and John C. Brown (2004), “A Direct Test of the Theory of Comparative Advantage: the Case of Japan”, Journal of Political, 14 Economy, 112, 48-67.Daniels, J.D., Radebauch, L.H. and Sullivan, D.P (2011) International Business: Global Edition, 14th Edition. Upper Saddle River, N.J.: Pearson/Prentice Hall Doole, I., & Lowe, R. (2012). Internationa Marketing Strategy: Analysis, Development and Implementation (6th ed.). 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