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The Business Without Trade Barriers

In: Business and Management

Submitted By carlincio
Words 1691
Pages 7
“Economic growth without social progress lets the great majority of people remain in poverty, while a privileged few reap the benefits of rising abundance” (JF Kennedy March 14, 1961). The trade barriers have been for a long time a constraint for the economic growth for the small countries that try to export their product abroad. The efficiency of the dismantling of trade barriers requires to first identifying the link between the term “trade” and its consequences on the countries’ economies

I trade and his barriers

International trade is the exchange of goods and services between countries. This type of trade gives rise to an economic world, which the prices, or demand and supply, affect and are affected by global events. A good example of that is during the 1973 oil crisis. The members of the OAPEC (organisation of Arab petroleum exporting countries) have decided an oil embargo "in response to the U.S. decision to re-supply the Israeli military" during the Yom Kippur war. The economic effect was immediate. The price of oil quadrupled by 1974 to US$12 per barrel (75 US$/m3). The most important effect was on the economy. Because of this embargo some countries couldn’t export or import their product in foreign country. This embargo put some countries in a big trouble concerning the oil supply.
Despite this free aspect of the trade, there are some countries that tried to protect their local economy against foreigner investment. So potential investor could not expand, facing the discrimination of the other countries' protectionism.
Trade barrier works as a tool to ensure a protectionism policy. They are Government laws, regulations, policies, or practices that protect domestic products from foreign competition.

Once a government body is convinced, for whatever reason, of the necessity to impose trade restrictions, there is endless list of policy option to...

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