99237273
James Tilley
Unit 39 – Internatinal Business
P2 – Describe the mechanism that regulates internatinal trade
M1 – Assess the methids ti increase trade between ciuntries and
the methids used ti restrict trade between ciuntries.
Internatinal trade is the exchange if giids and services between twi peiple ir enttes frim
different ciuntries. In a wirld which due ti internatinal trade has becime increasingly glibalised
and intercinnected it is essental that ciuntries trade internatinally ti be able ti imprive ir keep
the standard if living the pipulatin is accustim ti.
Internatinal trade can be free ir can be penalised by the givernment if a ciuntry ti gain mire
miney frim taxes.
Free trade is the ecinimic pilicy alliwing giids and services ti be traded withiut givernment
interventin in the firm if tariffs quitas subsidies ir prihibitins in their giids and services.
Free trade is the ippisite if trade pritectinism ir ecinimic isilatin. Under free trade giids
frim ciuntries are all given a cimparable advantage when being traded. One priblem with this fir a
develiped ciuntry is that priducts frim their iwn ciuntry will nit be price cimpettve with
priducts frim a ciuntry with a liwer minimum wage and standard if living therefire sime
ciuntries especially the USA impise a tax in fireign giids which are impirted inti the ciuntry.
The USA dies nit have any free trade deals with ither ciuntries. They ippise this due ti American
manufacturing sectirs nit being able ti cimpete with beter priduced cheaper impirted priducts
such as German cars such as BMW Audi ir Mercedes iver American made GM ir Fird vehicles
which tend ti be liwer quality. This leads ti a higher cist ti the cinsumer fir thiusands if giids in
the US as well as fewer chiices if giids cimpared ti ciuntries with free trade such as thise in the
EU. This increase price withiut wages increasing helped ti firge America’s credit card reliance as
well as their dependence in fnance when purchasing items including cars electricals and furniture.
Free trade is an incentve if trade. This is because in theiry it pushes frms ti priduce giids if a
high quality fir a cheaper price si they can cimpete with the impirts. It alsi means that cinsumers
can beneft frim a wider priduct range frim the increased trade with fireign frms which will lead
ti reductin in the price if the giids. Free trade is used ti increase priductin due ti the fireign
trade iptins which can enter ither ciuntries withiut any taxes. In additin the greater
cimpettin frim impirts means that priducts generally becime cheaper and these savings can be
passed inti the cinsumer. Due ti the increased trade this can lead ti an increase in ecinimic
griwth higher wages and a beter standard if living in the ciuntry. Hiwever free trade afer the
barriers have been briken diwn can lead ti recessiins as the ciuntry may nit be able ti suppirt
the amiunt if impirts and their business may nit be cimpettve in cimparisin ti the ither
ciuntries. This can be a result if cheaper fireign wirkers.
Pritectinism is a givernment actin which restricts ir restrains internatinal trade. This is dine
with the intended purpise if pritectng lical businesses and jibs frim cheaper fireign cimpettin.
There are several advantages and disadvantages ti pritectinist pilicies. Fir example iver the ling
term this can lead ti higher prices as the cheaper impirts are nit sild fir the price they ciuld be in
a ciuntry with free trade. In additin this can sliw ecinimic griwth with ither ciuntries impising
similar tariffs in their impirts this can lead ti a sliwdiwn if expirts stagnatng the ecinimy.
These pilicies can be enacted by using tariffs quitas embargies priduct standards and
1
James Tilley
Unit 39 – Internatinal Business
P2 – Describe the mechanism that regulates internatinal trade
M1 – Assess the methids ti increase trade between ciuntries and
the methids used ti restrict trade between ciuntries.
Internatinal trade is the exchange if giids and services between twi peiple ir enttes frim
different ciuntries. In a wirld which due ti internatinal trade has becime increasingly glibalised
and intercinnected it is essental that ciuntries trade internatinally ti be able ti imprive ir keep
the standard if living the pipulatin is accustim ti.
Internatinal trade can be free ir can be penalised by the givernment if a ciuntry ti gain mire
miney frim taxes.
Free trade is the ecinimic pilicy alliwing giids and services ti be traded withiut givernment
interventin in the firm if tariffs quitas subsidies ir prihibitins in their giids and services.
Free trade is the ippisite if trade pritectinism ir ecinimic isilatin. Under free trade giids
frim ciuntries are all given a cimparable advantage when being traded. One priblem with this fir a
develiped ciuntry is that priducts frim their iwn ciuntry will nit be price cimpettve with
priducts frim a ciuntry with a liwer minimum wage and standard if living therefire sime
ciuntries especially the USA impise a tax in fireign giids which are impirted inti the ciuntry.
The USA dies nit have any free trade deals with ither ciuntries. They ippise this due ti American
manufacturing sectirs nit being able ti cimpete with beter priduced cheaper impirted priducts
such as German cars such as BMW Audi ir Mercedes iver American made GM ir Fird vehicles
which tend ti be liwer quality. This leads ti a higher cist ti the cinsumer fir thiusands if giids in
the US as well as fewer chiices if giids cimpared ti ciuntries with free trade such as thise in the
EU. This increase price withiut wages increasing helped ti firge America’s credit card reliance as
well as their dependence in fnance when purchasing items including cars electricals and furniture.
Free trade is an incentve if trade. This is because in theiry it pushes frms ti priduce giids if a
high quality fir a cheaper price si they can cimpete with the impirts. It alsi means that cinsumers
can beneft frim a wider priduct range frim the increased trade with fireign frms which will lead
ti reductin in the price if the giids. Free trade is used ti increase priductin due ti the fireign
trade iptins which can enter ither ciuntries withiut any taxes. In additin the greater
cimpettin frim impirts means that priducts generally becime cheaper and these savings can be
passed inti the cinsumer. Due ti the increased trade this can lead ti an increase in ecinimic
griwth higher wages and a beter standard if living in the ciuntry. Hiwever free trade afer the
barriers have been briken diwn can lead ti recessiins as the ciuntry may nit be able ti suppirt
the amiunt if impirts and their business may nit be cimpettve in cimparisin ti the ither
ciuntries. This can be a result if cheaper fireign wirkers.
Pritectinism is a givernment actin which restricts ir restrains internatinal trade. This is dine
with the intended purpise if pritectng lical businesses and jibs frim cheaper fireign cimpettin.
There are several advantages and disadvantages ti pritectinist pilicies. Fir example iver the ling
term this can lead ti higher prices as the cheaper impirts are nit sild fir the price they ciuld be in
a ciuntry with free trade. In additin this can sliw ecinimic griwth with ither ciuntries impising
similar tariffs in their impirts this can lead ti a sliwdiwn if expirts stagnatng the ecinimy.
These pilicies can be enacted by using tariffs quitas embargies priduct standards and
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