...International Trade Debate XECO 212 International Trade Debate The strength of the dollar rests on the fundamental strength of the US economy. The main problem with a stronger dollar is the concern of exports. A stronger dollar makes U.S. exports more expensive for foreign consumers and buyers. A tariff is a tax that one country sets on the imported goods or services of another nation. A quota in international trade is a government imposed limit on the quantity or the value of the goods and services that may be exported or imported over a specified period of time. Quotas are more effective in restricting trade than tariffs, particularly if domestic demand for a commodity is not sensitive to increases in price. Because the effects of quotas cannot be offset by depreciation of the foreign currency, quotas may be more disturbing to the international trade mechanism than tariffs. A tariff raises the domestic price, the domestic sellers will make out well while the domestic buyers are worse off. Tariffs hurt the country that imposes them, as their cost outweigh their benefits. Tariffs are a benefit to domestic producers who now face reduced competition in their home market. The reduced competition causes prices to rise. There are costs to tariffs. The price of the good with the tariff has increased; the consumer is forced to either buy less of this good or less of some other good. The price increase can be thought of as a reduction in consumer income. Since consumers are purchasing...
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...XECO 212 Week 8 CheckPoint International Trade Debate Due Day 5 A tariff is usually a tax that one country sets on the imported goods or services of another nation. A quota is a trade restriction set by a country to maintain and secure the country’s interests by limiting the amount of goods that can be imported into the country for a fixed time period. The tariffs and quotas in the United States were established to control the amount of goods that enter into the United States to protect the United States interests economically while still maintaining the healthy trading relationship with other countries. The United States utilize these trade restrictions to decide which countries will be suitable. These trade tools are meant to guard the country’s economic interests and establish relations with particular nations. Some critics of these trade tools argue that tariffs and quotas often lead to corruption, such as with smugglers seeking to escape tariffs and quotas and high prices for consumers as there is less competition between domestic and international goods, which tend to be less expensive.I think that it is very important that trading with other countries is limited. With the economy that we are currently in, many people stand to benefit from their products being bought and sold locally. On the other hand, there are some products that can be produced here, but not in a high enough quantity to meet the demands for those products. This is where trade comes in. By putting high...
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...International Trade Debate XECO/212 University Of Phoenix/AXIA The United States uses tariffs and quotas to restrict trade with foreign countries. This is imperative to control foreign imports and the impact they have on our economy. All countries produce goods that are available on the open market, such as automobiles, lumber, consumer electronics etc. The United States has a manufacturing base that is shrinking because of competition from other countries. In order to slow the progression of this decline we place tariffs on countries that produce products that we sell at home. Being one of the world’s most financially affluent countries we create a large market for goods, especially cheap goods that are mostly produced in countries that have much lower working condition standards than the United States. This gives the importing country an edge in the profit margin by way of the lower cost of production. In order to maintain equilibrium in the world market we impose tariffs and quotas. The benefit to the domestic producer is one that in many cases keeps the manufacturing base viable in the U.S., but this advantage predominantly effects the larger corporations that are beginning to take over much of the market, while the inflated prices and increase in jobs does not end up in the mutual pockets of the workers, but rather concentrates to the top. In many ways this is counterproductive because if the U.S. were to lose a manufacturing industry, the jobs it creates that do not...
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...With an economy that just came out of a recession and is still on the rebound, the United States currency or the dollar is a bit weakened. The US dollar is still the main currency used around the world, but with it being weakened there may be some downsides to it in the marketplace. The strength of the dollar on a domestic level promotes spending and better interest rates. The strength of the dollar on a global level would be that it brings in more currency on an international level because it is cheaper to trade from a foreign standpoint. The benefits from tariffs would be that domestic businesses would get a reduction in competition. The benefits of quotas would be that foreign and domestic producers get higher prices, but the downside to that is that the consumer will lose out. It seems like the consumer looses in both situations. A tariff and quota adds more costs to a product. There are some instance where the producer may take a lose because if the product is too high for the consumer to buy then the product will just sit there. For instance, “In the late 1970s, the government put a quota on Japanese cares. That created a shortage. Dealers added several thousand dollars to the cost of each car. The consumer lost. The manufacturer lost” (Answers, 2013). In order to keep strict regulations of products produced overseas, I can see why tariffs and quotas would be needed to keep everything under control. ...
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...the U.S. Dollar may be more or less depending on which foreign economy is in question. There are many benefits that placing tariffs on international trade has on the economy. The tariffs actually increases the domestic selling price; therefore, allowing the sellers or producers of the products to earn more of a profit on those goods, because the demand has decreased. Because the demand for so many products decreases, the prices increase allowing larger profits, and opportunities to create other products. On the other had those tariffs also cause loses. Although the domestic producers are better off, and the government raises much needed revenue, the losses that consumer’s experience far exceed the benefits that the government and domestic producers receive. While the domestic suppliers are enjoying a huge profit, the domestic buyers are forced to purchase goods that have increased in price because of these tariffs that have been placed on these goods. Tariffs can also affect the number of goods a consumer can actually purchase. In terms of quotas, a quota is similar to tariffs. Quotas raise the prices that are set for a particular good, restrict trade within countries, and can cause losses in profit. Although, there are some benefits, and also some great losses associated with foreign trade, many economists ensure consumers that free trade is what is best for the country and the...
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...The United States must place high tariffs and use quotas to restrict trade with foreign countries. The placement of high tariffs and the use of quotas will help strengthen the weak American dollar, raise and stabilize the economy. Our economy is at one of the weakest points it has ever been in history. If the American dollar were to collapse, it would completely destroy the global economy. Our dollar is declining, as this happens it makes U.S produced goods are less expensive and become more competitive with foreign produced goods. In theory this helps U.S exports, boosting economic growth, but in the end we do pay for it with it higher oil prices during the summer months. When the dollar declines, oil producing countries seem to raise their prices, this is done since they know we depend on their oil and they know that we will pay for it. A tariff is a tax on imports and a quota is a legal limit on the amount that can be imported. The benefits from tariffs would be increased revenue that would benefit the economy. The disadvantage to having tariffs would be the price increase on goods with the tariff in place. Tariffs can be harmful to those that impose them and those that have to pay them. Quotas can beneficial by limiting certain imports in certain countries. The disadvantage to this is determining what goods to limit and to what quantity and the potential for increased smuggling of goods. . Tariffs offer more benefits than quotas. Tariffs can help control the costs of...
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...unrestricted international trade, many more benefits and opportunities exist, outweighing any negative tendencies. This sort of trade tends to give opportunities to countries that are trading, allowing them to prosper through diversity in labor that is divided internationally -- allow local producers of goods to have access to international markets. It is the minimum restrictions of unrestricted international trade that allows for an economy to prosper. Many individuals might state that competition may harm business within a country's economy, but I tend to disagree because competition is a main factor in allowing innovation as well as efficiency to exist and even allows prices of goods to be pushed downwards to keep up with competitors. Microeconomic theory states that when compared to pure competition, no resource allocation system has greater efficiency. Competition drives firms to keep creating new technologies, services, and products, giving customers a steady flow of a wide range of options and better products to choose from. Therefore, I believe competition from foreign firms will only encourage local forms to increase their efficiency and deliver products of greater value to local and international customers. Unrestricted international trade can help a country build peaceful relations with other trading countries and provide it with several opportunities to improve its technological expertise through exposure to international goods. Great diversity of international trade...
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...Running Head: CheckPoint International Trade Debate CheckPoint: International Trade Debate XECO/212 University of Phoenix International Trade Debate In the world today, we rely on international trade to get the goods and services we require and this has increased our interdependence. However, there are both supporters and opponents of international trade. In the case of supporters, they believe in the advantages of international trade such as an increase in choice of goods and services for consumers which will help to increase their level of satisfaction. On the other hand, opponents believe that international trade will bring about disadvantages such as increasing competition which will hurt domestic firms and also affect employment rates. International trade takes place because different countries are productive in producing different groups. Two economic concepts involved in international trade will be absolute advantage and comparative advantage. Absolute advantage refers to the ability to produce more goods than another competitor. Comparative advantage refers to the ability to produce a good at a lower opportunity cost than a competitor. Countries will only engage in international trade when they are able to benefit. Hence, countries of different comparative advantage will trade to enjoy more of certain goods. The United States must place high tariffs and use quotas to restrict trade with foreign countries. There are many advantages and disadvantages associated...
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...TRADE AND ENVIRONMENT A RESOURCE BOOK Edited by Adil Najam Mark Halle Ricardo Meléndez-Ortiz TRADE AND ENVIRONMENT A RESOURCE BOOK Edited by Adil Najam Mark Halle Ricardo Meléndez-Ortiz Trade and Environment: A Resource Book © 2007 International Institute for Sustainable Development (IISD), International Centre for Trade and Sustainable Development (ICTSD) and the Regional and International Networking Group (The Ring). Trade and Environment: A Resource Book Edited by Adil Najam, Mark Halle and Ricardo Meléndez-Ortiz ISBN 978-1-895536-99-7 Published by International Institute for Sustainable Development, International Centre for Trade and Sustainable Development, The Regional and International Networking Group This publication is available online at http://www.trade-environment.org http://www.iisd.org http://www.ictsd.org http://www.ring-alliance.org Cover photos from iStockphoto. Readers are encouraged to quote and reproduce this material for educational, not-for-profit purposes, provided the source is acknowledged. Printed on 100% post-consumer recycled paper. Trade and Environment: A Resource Book The International Institute for Sustainable Development (IISD, http://www.iisd.org) contributes to sustainable development by advancing policy recommendations on international trade and investment, economic policy, climate change, measurement and assessment, and natural resources management. Through the Internet, we report on international negotiations and...
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...Syllabus International Business 1 (IB-1) 2012-2013 1-IBMS 1. INTRODUCTION This International Business (IB-1) course is designed to provide students with a basic understanding of the international business environment. In order to be successful, IBMS Students need to familiarize themselves with the basic concepts and definitions of today’s competitive business world. Students must become aware of the major actors and forces that help shape the international business context. The course covers a variety of topics, which include the theoretical foundations of global trade and investment, the political environment, foreign direct investment and market entry, international business strategy and operations. The course is structured around lectures and workshops. Students are expected to attend all lectures and workshops. In the lectures, students will learn about the field of international business. In the workshops, students are expected to present and discuss international business cases. These business cases provide helpful examples and insights towards an understanding of the International Business theory taught in lecture classes. Students are encouraged to contribute to meaningful discussions, develop the ability to defend their position and apply knowledge to “real life” situations based on the cases presented in class. Attendance IB-1 is not a spectator sport. Attendance and contribution accounts for 10%...
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...PART 1 GLOBAL BUSINESS ENVIRONMENT CHAPTER ONE Globalization Learning Objectives After studying this chapter, you should be able to 1. Describe the process of globalization and how it affects markets and production. 2. Identify the two forces causing globalization to increase. 3. Summarize the evidence for each main argument in the globalization debate. 4. Identify the types of companies that participate in international business. 5. Describe the global business environment and identify its four main elements. A LOOK AT THIS CHAPTER This chapter defines the scope of international business and introduces us to some of its most important topics. We begin by presenting globalization—describing its influence on markets and production and the forces behind its growth. Each main argument in the debate over globalization is also analyzed in detail. We then identify the key players in international business today. This chapter closes with a model that depicts international business as occurring within an integrated global business environment. A LOOK AHEAD Part 2, encompassing Chapters 2, 3, and 4, introduces us to different national business environments. Chapter 2 describes important cultural differences among nations. Chapter 3 examines different political and legal systems. And Chapter 4 presents the world’s various economic systems and issues surrounding economic development. 24 Emirates’ Global Impact DUBAI, United Arab Emirates—The...
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...Globalisation 1 Lecture/Chapter Topics • Chapter Introduction • Definition of Globalisation • Emergence of Global Institutions • Driving Forces of Globalisation • Changing Characteristics of Global Economy • Globalisation Debate • Managing in Global Marketplace Definition of Globalisation • • Globalisation: the trend towards a more integrated global economic system Effects of globalisation can be seen everywhere, for example: – – – – the cars people drive the food people eat the jobs people have the clothes people wear Definition of Globalisation • What is Globalisation? – Globalisation refers to the shift towards a more integrated and interdependent world economy. • Facets of Globalisation – Globalisation of Markets – Globalisation of Products – Emergence of Global Institutions Definition of Globalisation • The Globalisation of Markets – – The historically distinct and separate national markets are merging into one huge global marketplace in which the tastes and preferences of consumers in different nations are beginning to converge in some global norm. Examples of consumer products: Prada fashions, Sony Playstation video games, McDonald’s hamburgers (US), Nescafe coffee (Switzerland), Nokia mobile phones (Finland), IKEA furniture (Sweden) Definition of Globalisation • Globalisation of Production – Sourcing goods and services from different locations around the globe in an attempt to take advantage...
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...conflict have vanished, “global integration”. Covering a wide range of distinct political, economic, and cultural trends, the term “globalization” has quickly become one of the most fashionable contemporary debates. Moreover, sharp differences continue to separate participants in this ongoing debate. “The anti-globalization movement is critical of the globalization of capitalism. Participants base their criticisms on a number of related ideas”. Supporters of this movement stand in opposition to the unregulated political power of large, multi-national corporations and against the rules of the trade agreements. Specifically, corporations are accused of seeking to maximize profit at the expense of unregulated work safety conditions and standards, labour hiring and compensation standards, environmental conservation principles, and “the integrity of national legislative authority, independence and sovereignty”. Anti-globalization activists base their fundamentals generally on democratic representation, human rights and more egalitarianism among states. The US Global Justice Movement, the UK Trade Justice Movement and the Alter-globalization activist group are analogous terms for the same international movement. The ideology behind the opposition to international financial institutions and transnational corporations is based on three single concepts. Generally speaking, protesters believe that the global financial institutions and agreements undermine local decision-making...
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...66 12 lobalization” refers to the growing interdependence of countries resulting from the increasing integration of trade, finance, people, and ideas in one global marketplace. International trade and cross-border investment flows are the main elements of this integration. Globalization started after World War II but has accelerated considerably since the mid-1980s, driven by two main factors. One involves technological advances that have lowered the costs of transportation, communication, and computation to the extent that it is often economically feasible for a firm to locate different phases of production in different countries. The other factor has to do with the increasing liberalization of trade and capital markets: more and more governments are refusing to protect their economies from foreign competition or influence through import tariffs and nontariff barriers such as import quotas, export restraints, and legal prohibitions. A number of international institutions established in the wake of World War II—including the World Bank, International Monetary Fund (IMF), and General Agreement on Tariffs and Trade (GATT), succeeded in 1995 by the World Trade Organization (WTO)—have played an important role in promoting free trade in place of protectionism. Empirical evidence suggests that globalization has significantly boosted economic growth in East Asian economies such as Hong Kong (China), the Republic of Korea, and Singapore. But not all developing...
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...12 Globalization and International Trade “Globalization” refers to the growing interdependence of countries resulting from the increasing integration of trade, finance, people, and ideas in one global marketplace. International trade and cross-border investment flows are the main elements of this integration. Globalization started after World War II but has accelerated considerably since the mid-1980s, driven by two main factors. One involves technological advances that have lowered the costs of transportation, communication, and computation to the extent that it is often economically feasible for a firm to locate different phases of production in different countries. The other factor has to do with the increasing liberalization of trade and capital markets: more and more governments are refusing to protect their economies from foreign competition or influence through import tariffs and nontariff barriers such as import quotas, export restraints, and legal prohibitions. A number of international institutions established in the wake of World War II—including the World Bank, International Monetary Fund (IMF), and General Agreement on Tariffs and Trade (GATT), succeeded in 1995 by the World Trade Organization (WTO)—have played an 66 important role in promoting free trade in place of protectionism. Empirical evidence suggests that globalization has significantly boosted economic growth in East Asian economies such as Hong Kong (China), the Republic of Korea, and Singapore....
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