The paper 'The Contemporary Trade Environment' is a perfect example of a business term paper. It is imperative that the international trade regime established under the watch of the United States after World War II, which is now enshrined in the World Trade Organization has been a tremendous shaper of the most open international economy. As observed by Pride, Hughes and Kapoor (2011), the U. S. and other industrialized economies took the lead after the Second World War to reduce protectionism in the international trade owing to shared belief and experiences that the practices was the primary cause of the Great Depression of the 1930s.
The resolution to herd the world out of protectionist tendencies particularly by the U. S. stemmed from experiential belief that depressions resulting from trade restrictions not only amplified political instabilities thus cultivating war but also weakened domestic economic activities. The fight for the post-war trade regime led by the U. S. sought to lower tariffs and encourage each country to optimize its comparative advantage by producing goods that it can best. While tariffs have been declining and free trade increasing, however, new threats have emerged as domestic industries face stiffer competition from heightened international competition that have resuscitated protectionism at differing scales.
This review details the reemergence of trade restrictions that have surfaced as the novel instruments for governments to achieve economic, political, and social-cultural advantages. Restrictions to International Business Reflections from the contemporary liberalized business practices indicate that the specialization and increased international trade resulted from the post World War II trade regime advanced the efficient production of want-satisfactory goods and services globally. Moreover, international business has been incrementally expanding in tandem with the dynamics of the globalization wave.
However, international governments yet continue to impose trade restrictions to gag free trade for reasons ranging from political, economic, and to some extent cultural protectionism (Bernanke, 2006). This section explores in detail the discourse of continued restrictions to free trade by underlining the different types of restrictions, their underlying advantages, and concomitant demerits. Types of Trade Restrictions Economic literature continues to grow the rationale that while international governments remain enthusiastic to export more of their products abroad, they seek to cushion their domestic industries from international competition in order to achieve a favorable balance of trade (Mankiw, 1998).
This implies that most restrictions bear an economic basis and are aimed at imports from other economies. Restrictions on Imports As aforementioned, governments tend to work out favoritisms that safeguard the balance of payments, which often involves discouragement of imports from foreign countries through trade restrictions. In this context, the most invoked restrictions come in forms of tariffs and quotas. A tariff is an importation tax that a government imposes on imported goods, which makes the prices of foreign goods increase (Medura, 2010).
For example, although the U. S engineered the liberalized trade regime after World War II, it maintains some degree of protectionism through the imposition of tariffs in some industries. Some American industries: apparel and firm products, however, have historically received protection against the international competition through import taxation on related products.
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