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What Should Be the Role of Government

In: Business and Management

Submitted By kyle1001
Words 360
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What should be the role of government in international business relations?
Government and business are interdependent, and when it comes to international business, this interdependence has grown even further by the globalization of economy.
Government often intervene in trade by strongly supporting their domestic companies’ exporting activities. But the more emotionally charged trade intervention occurs when a nation’s economy is underperforming. At this point, government role will be protecting from imports that are reducing work and eliminating jobs in the domestic market, preserve national security and protecting consumers.
Protecting jobs and Industries
One of the government roles in international business will be protecting jobs and industries from foreign competition. Trade flows can cause major structural shift in employment. Links between industries spread these effects throughout the economy. Such as low domestically produced product will affect the industry that linked to the firm. To protect from foreign competition government can use TARRIFFS AND QUOTAS. Tariffs protects domestic producers of a product because import tariffs raise the effective cost of an imported good, domestically produced goods can appear more attractive to buyers. Also by Quotas protect its domestic producers by placing a limit on the amount of goods allowed to enter the country. This helps domestic producers maintain their market shares and prices because competitive forces are restrained.
For example In 2002, the U.S government placed an ad valorem tariff of 8 percent to 30 percent on imports of foreign steel. The idea was to protect domestic steel producers from cheap imports of foreign steel.
Preserve National Security
Preserving National Security is also one of the government roles in international business. Preserving National Security includes protect their

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