...Introduction Do international economics of free trade important in the United States of America and in the world of different countries? Therefore, according to the article of "Embracing the Challenge of Free Trade: Competing and Prospering in a Global Economy", Ben S. Bernanke, who is the author and the Chairman of the Montana Economic Development Summit 2007 Butte, MT, had said," international trade in goods, services, and assets, like other forms of market-based exchange, allows us to transform what we have into what we need or want under increasingly beneficial terms. Trade allows us to enjoy both a more productive economy and higher living standards" (Bernanke). Free trade is very important as international economics will cause both advantages...
Words: 1237 - Pages: 5
...The three pros of the aforementioned statement include: 1.It encourages free trade - When a country is deprived of borders, they incur an unlimited variety of discounted consumer and industrialized goods and services. Intrinsically, fewer barriers, like tariffs, sales taxes, or subsidies are implemented since there isn’t a country to add borders ("22 Globalization Pros and Cons", 2017). For example, In Trinidad and Tobago, tariffs are now countless and theoretically possesses the preeminent market for imported consumer goods in CARICOM. It furthermore offers the local producers a final opportunity in the market. Though, it is a momentary measure, it enforces on the overseas producers to be economical, if they desire to recapture the CARICOM...
Words: 831 - Pages: 4
...zones are also known as free trade zones. True or False True 2. The is great income disparity in South America True or False True 3. The ______b. Amazon__________________ Basin is a reservoir of biodiversity? a. Patagonian b. Amazon c. Mexico City 4. Small pox, tobacco and the potato are all examples of the Columbian Exchange. True or False True 5. ____c. El Nino____________ are periodic climate-altering changes, especially in the Pacific Ocean, now understood to operate on a global scale. ? a. hurricanes b. El Pinto c. El Nino 6-7. (2 points) Define the term structural adjustment policies (SAPs) _________________________________________________________________________ SAPs are policies that the World Bank and International Monetary Fund required from governments to receive loans. The policies were started to help countries become economically self-sufficient. This was to help ensure that that the loans would get repaid. SAPs encouraged governments to reduce spending on government programs, minimize the number of civil servants and by lowering taxes on already established private industries. _________________________________________________________________________ 8. The Incan Empire was principally in northern Mexico. True or False False 9-10. (2 points) Describe the pros and cons of NAFTA. NAFTA is a free trade agreement made between the United States, Canada and Mexico. This agreement would remove most barriers to free trade and investment by eliminating...
Words: 264 - Pages: 2
...Economic integration agreements come in three types: 1) bilateral, 2) regional, and 3) global. (Samii, 2011) Bilateral integration is where two countries cooperate in reducing tariffs. (Samii, 2011) Regional integration is where a group of countries are located in the same geographic area and agree to cooperate such as the European Union (EU). (Samii, 2011) And, global integration is where countries across the world agree to cooperate in trade agreements such as World Trade Organization. (Samii, 2011) Countries enter into these agreements seeking to reduce cost on both their imports and exports. In turn, countries will most likely see an increase in foreign direct investments resulting from trade blocs. (Curley, 2014) Trade blocs are created bringing countries closer together by eliminating tariffs. And as a result, demand changes based on the lower cost because now bulk productions are allowed. Consequently, the increased competition promotes greater efficiency within firms. (Curley, 2014) With some Trade blocs free trade is allowed within each country’s markets thereby encouraging each country to specialize in certain markets. (Economic Online, Unknown) In addition, jobs may be created because of the increased trade between members. (Economic Online, Unknown) And a final benefit is that firms inside the bloc are protected from cheaper imports from outside the blocs, such as the European Union show industry is protected from cheaper imports from China and Vietnam...
Words: 478 - Pages: 2
...IWhat is International Marketing? Marketing a product or service across national boundaries in order to satisfy the needs of customers and the objectives of the organization. Different Terms: Multidomestic marketing: adapting product and marketing programs to each foreign market independently. Global marketing: marketing activities in multiple country markets are coordinated and integrated. Foreign marketing: loosely refers to marketing a product in a market outside the home market. International Marketing Environments Global Economic Environment Cultural Environment International Marketing Global Competitive Environment Political/Regulatory Environment Systems Global Systems Global Financial Systems International Monetary Systems and Foreign Exchange Market Global/regional Trading Systems (WTO, EU, NAFTA, ASEAN,...) Importance of International Marketing • • • • World trade has risen from $2 trillion to $18 trillion in last three decades. International trade grows twice as fast as domestic trade. Global marketing is a “must” for firms to achieve sustained growth. Marketing success will be defined on a global scale. Domestic and International Trade Growth Percentage of Growth 12% 10% 8% 6% 4% 2% 0% Year International Trade Domestic Trade Financial Statistics Yearbook Source: International 2011, International Monetary Fund, Washington D. C. Uniqueness...
Words: 1762 - Pages: 8
...joint venture equity stake/acquisition EXPORTING Pros: In developing countries it is necessary to reach an international level of quality, to upgrade machinery, raw materials and processes, based on imports needed for export. In countries with higher manufacturing costs, probably out cheaper to import than produce, thus becoming resellers, from manufacturers to retailers. In countries with free trade treaties gradual reduction of import taxes to zero, lower the cost of international purchases. Cons: Buy in another country reduces income country where the entrepreneur. Symptoms of economic problems as higher imports than exports, reduce sources of employment, output and cause national currency is exchanged for foreign currency. Imports are always implicit risk of increase in the price of foreign currency. Businesses tied to increased foreign currency for imports which are their main source of income, should contract hedging or futures brokerage firms in order to protect themselves. Imports, in high degree, dependent on the entrepreneur make international purchases. Any reliance weakens the company and even more so, by the distance international suppliers, deliveries and conditions. LICENSING Pros: Allows the licensee uses proven technology in the'' business'' in exchange for paying the license fees. Normally the total cost of development and maintenance of the technology is often higher. Cons: It can cause the...
Words: 925 - Pages: 4
...International School of Business – University of Economics Ho Chi Minh RESEARCH ESSAY DINH XUAN LOC EAP5 EAP 5 Essay Topic – September 2015 Economy The United Stated, Vietnam, and ten other countries are working together to reach an agreement called the Trans-Pacific Partnership. Once completed, the TPP will boost the economies, lower barriers to trade and investment, increase exports, and create more jobs for the countries involved. To what extent do you agree with the above statement? Refer to specific examples in your answer. The global economy in the twenty first century has changed rapidly with the trend of trade liberalization. The appearance of some high valuable bi- and multilateral agreements might affect strongly trading activities in the future, especially the Trans-Pacific Partnership (TPP) agreement. This free trade agreement (FTA) is one of the most challenging and largest pacts not only for TPP members, but also for the international exchange. Therefore, the purpose of this paper is to ascertain the direct and indirect effect of the TPP agreement to the worldwide trading. In fact, if the TPP is signed by twelve members, it will boost the development of the global economy significantly, as well as might change the exchange policy around the world. The TPP is a comprehensive agreement, so its provisions cover various sectors of national economy, however, with the limitation of time and specialized knowledge, this paper only assess the outcome of the TPP...
Words: 1659 - Pages: 7
...country-to-country relations back then: non-existent. Well at lease when we talk of relations that is founded in trust and understanding. We forge alliances only because of the things we get from it. But globalization has formed some semblance of unity among all us and the concerns of other nation that back then were opted to be resolved on their own are now an issue with other countries as well and all unite to propel themselves to a solution. Globalization is often used for its financial connotations. The influence it has however is not contained solely to the economy. Other international aspects such as social relations, political discourse and psychological manifestations are also a part of globalization. We have constantly heard the globalization pros and cons and the debate of these globalization pros and cons continue up until now. Here is a bit of a crash course of the pros and the cons of globalization. Pros of globalization are that more accessible market for anyone all over the world regardless of color, race, and social class. “Steady supply of cash to developing countries and even the well established ones. There is an increase in the production capabilities of companies and because of this they now have more freedom to customize their services and products fitted to the needs of the consumers. Political merging will be frequent and a more peaceful and orderly world order will be set”(Weidenbaum, 2005). Information and communication will be strengthened not just between...
Words: 2120 - Pages: 9
...Slide 1: Title In January 1994 there was a new development; the North American Free Trade Agreement (NAFTA) was instituted between the United States, Mexico, and Canada creating the largest free trade area and richest market in the world. This one of the most important and wide-reaching treaties in the world. A treaty between Canada, Mexico, and the United States that was designed to foster greater trade between the three countries. It was one of interesting prospect and looked upon as the start of globalization. The attempt was to help with financial situations involving the all countries in the North American continent, especially those of United States, Mexico, and Canada. One major problem encountered were the economic stabilities of each country, especially in Mexico. There were issues of foreign debt, balance of payment problems, and exchange rate fluctuations. The agreement does well to commit to standards on environmental protection and labor laws but still strives to enforce those laws. The agreement did have some goals to help foster the partnerships between the countries. First and foremost to reduce trade barriers. These barriers cause imports to be of a higher priced than local goods. The object of the agreement was to participate in free" or "open" when goods and services can move into markets without restrictions, and prices are determined by supply and demand. Nations sometimes erect barriers to this free movement of goods and services, such...
Words: 1449 - Pages: 6
...Regional Integration for and Against Articles Introduction The North American Free Trade Agreement (NAFTA) is an agreement between the United States of America, Mexico and Canada. The agreement creates rules in the trade block and it was established in 1994. The goal of the agreement is remove or decrease the tariffs and non-tariffs barriers to stimulate trade. The NAFTA agreement included: * Removing all tariffs on 99 percent of the good by 2004. * Protection of intellectual property * Removal of most foreign direct investments with a few protections established for each country * Removal of barriers on the cross-border flow of service * Application of national environmental standard * Establishing two commissions with the power to impose fines and remove trade privileges if needed Regional integration is not only for economical reasons but it is also political. There is much opposition within each country and it takes many years to have an agreement that satisfies ever member country. Pros and Cons for NAFTA Advantages The main purpose for NAFTA is to create a larger and more efficient base for the entire North American region. The first advantage for the members of NAFTA was to reduce the tariffs that had been imposed in all their products. The cost of the products is also controlled in member nations of NAFTA since the import cost are not inflated by taxes. Lastly, the benefit is mutual for US and Canada to move production to Mexico. The...
Words: 503 - Pages: 3
...North American Free Trade Agreement The North American Free Trade Agreement (NAFTA) is a regulation that sets the rules of trade between the United States, Canada, and Mexico. The purpose of this comprehensive agreement is to diminish trading costs, encourage economic activity and help North America stay competitive in the international marketplace. NAFTA came into affect on January 1st 1994 creating one of the largest free trade zones in the world. NAFTA grants the most favored nation status to all three countries, meaning that all nations have to be given equal treatment. Since the enactment of NAFTA the North American economy has grown more then twice its size. After NAFTAs implementation most tariffs were removed within North America and all others were phased out over the next 15 years. As of January 1st 2008 the arrangement had diminished all remaining tariffs and barriers to investment between the NAFTA countries. The trade agreement is overseen by several commissions; including the free trade commission, NAFTA coordinators, NAFTA working groups and committees, NAFTA secretariat, commission for labor cooperation, and the commission for environmental cooperation. Even though NAFTA has created an environment of confidence and stability required for long-term investment the agreement is still seen as controversial. For examples the United States lost factory jobs to lower cost Mexican manufacturing and it lowered the wages for the remaining factory workers. NAFTA...
Words: 624 - Pages: 3
...Free Trade Area of the Americas Free Trade Area of the Americas Introduction There are many different regional blocs around the world such as the current one effecting North America called North American Free Trade Agreement (NAFTA). Another trade agreement that has been under hot debate is the Free Trade Area of the Americas (FTAA), which further extends the NAFTA to include other countries from Latin America, Central America, and the Caribbean. This essay will discuss the FTAA, whether the concept of the FTAA is good for advancing the economy of the United States, and finally the impact it might have on North American firms. What is the FTAA? The Free Trade of the Americas (FTAA) is a potential trade bloc encompassing the western hemisphere. As of November, 2005 the negotiations have been stalled and are a continued work in progress (Hill, 2013). The FTAA, first held discussions in December 1994 at the first summit of the Americas where 34 democratically-elected Heads of State of the Western Hemisphere met and came to the conclusion of creating a Free Trade Area of the Americas (FTAA) (“Fast Facts,” 2009). The intention of the FTAA was to open up trade by eliminating trade barriers on goods and services between the 34 different participating countries. It took another 3 years, April 2008, for second summit where the 34 heads of state to sat down and formally inaugurated talks that established a deadline date...
Words: 907 - Pages: 4
...International Business International Trade Advantages: Expanding businesses and increasing market shares: Canada for gas Improvising relations with other countries Selling surplus of natural resources: Canada has absolute advantage in lumber Job opportunities: Canada jobs rely on exports and when trading jobs are needed Disadvantages: Exploitation of natural resources Spread of viruses Ruining local businesses Decreases domestic production Canada’s competitive advatanges: People advantage: Hard working and intelligent workers, OECD higher education award Transportation Advantage: Boasts a sophisticated transportation network Importing & Exporting Indirect vs. Direct: Direct: a company exporting its own product / pros are control over negotiation and costs are shipping Indirect: Hiring another company to export goods into a country where there are export commission agents and export merchants Pros are volume and simplicity cons are company has less control over export process Trade balances Surplus: when exports are greater than imports Increasing Exports: 1. Businesses may receive subsidies to start up company 2. Give money as grants that do not have to be repaid to potential export products 3. Trade junkets are promotional programs from government Decreasing Imports: 1. Tariffs – putting a tax on imported goods 2. Quotas – Putting a limit on items 3. Embargoes – Putting complete ban on goods & services Trade Alliances ...
Words: 940 - Pages: 4
...Public Offering) Cons: High tax and pricing "We received little demand from our (retail) clients for the (Prada) shares. It might be the 12.5 percent tax that scared them away and the pricing itself was expensive when it compared with its peers," said Alfred Chan, chief dealer at Cheer Pearl Investment. "Unlike institutions, our retail clients hold the shares for a much shorter term," he added. "Consumers are willing to pay a very high premium chasing after brands, but it's not the case for investors. Investors are concerned about reasonable valuation and pricing" -Conita Hung, head of equity - research of Delta Asia Financial. Prada warned in its IPO prospectus that Hong Kong residents would be liable to a withholding tax on dividends on top of the capital gains tax. Hong Kong is known for its low-tax regime, with no capital gains taxes, no sales tax or value added tax (VAT) and has among the smallest income taxes on salaries. Apart from the tax issues, retail appetite for Prada may have been reduced due to volatile global markets in recent weeks “There’s going to be quite a lot of pressure on Prada,” said Espinasse, the author of IPO: A Global Guide. “The fact that retail investors haven’t gone for it is going to be an issue.” Individual investor demand for Prada shares suffered because Hong Kong and Italy have not signed a double taxation agreement. Hong Kong investors will...
Words: 1491 - Pages: 6
...Chapter 2: Economics: The Framework for Business 1. How does economics relate to business? Can an understanding of economics help business people succeed? If so how? Economics relates to business because it teaches business people how to make choices that can get their business the most revenue with the least amount of cost. The understanding of economics can help business people succeed, economics can teach you things like marginal cost and revenues and this is essential to an type of business. Economics can teach you statistics that if used properly can provide you with an upper hand against competition. 2. Compare and contrast microeconomics and macroeconomics. How do the 2 approaches interrelate? Use a specific example to explain. Macroeconomics and Microeconomics are both dealing with economics but indifferent levels, Macroeconomics is the study of a country's overall economic issues and Microeconomics deals with economics on an individual consumer,families and individual businesses. They can affect how much you can purchase for your family and what is available for you to purchase for your family. 3. What are the fundamental elements of the free market economic system? How can businesses thrive within this system? 1. The rights to own a business and keep after-tax profits 2. The right to private property 3. The right to free choice 4. The right to fair competition Free Market economies allows businesses to thrive...
Words: 1540 - Pages: 7
