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International Trade

International trade is seen as a collective good. That is, we know that the proliferation of international trade will, in the long-run, make everyone better off. International trade relies on the idea of comparative advantage. That is, if country A grows cheaper apples and country B grows cheaper bananas, country A will be better off growing only apples, and trading with country B for the amount of bananas they need. The same is true for country B and, as a result, both coutries will be better off with trade. Country A and country B will therefore enter into a trade agreement.

The most common type of international trade agreement is a preferential and free trade agreement. This type of agreement eliminates or reduces tariffs, quotas, and other trade restrictions on items and services. Trade agreements can be classified in three different ways: bilateral, where the agreement is signed by two sides, trade bloc, when the agreement is signed by a group of countries, and finally a multilateral agreement, when it is signed by more than two countries in the same region but not all the countries in that region.

International trade agreements are founded on reciprocity. That is, countries negotiate international trade agreements by making concessions in some areas of national policy (such as limiting certain import tarrifs) in order to make gains in other areas (such as the ability to export to new markets). 

International trade regimes enforce a set of common expectations that national governments have about the rules and regulations of international trade. These include expectations that states that participate in trade will do things like repay loans, or adhere to free and fair trade practices. The WTO and NAFTA are examples of international trade regimes.

Many of our international insitutions today stem from the Bretton Woods System. The Bretton Woods System was intended to manage the world's monetary system. It was created following World War II in order to help stabilize and rebuild post-war economies by fostering international economic cooperation. Bretton Woods institutions included the International Monetary Fund (IMF), the World Bank, and the International Bank for Reconstruction and Development. 

Categories within International Trade

African Trade

Postings: 39

This section discusses the advantages and disadvantages of doing trade in Africa and with African countries.

Middle Eastern Trade

Postings: 22

This section discusses trade between the countries of the Middle East and trade between the Middle East and the rest of the world.

Global Strategy for Ambitious Firms in Asia

Please provide your thoughts on 2 of the 4 questions. Also include APA reference and in text citation if possible. 1. As a CEO, you feel the price war in your industry is killing profits for all firms. However, you have been warned by corporate lawyers not to openly discuss pricing with rivals, whom you know personally (you w

Questions about Strategic Alliances

1. Compare and contrast the kinds of commitment needed in a strategic alliance. 2. Explain conditions under which a firm chooses a management structure available for a strategic alliance. 3. What are e-commerce enablers? Why are they becoming essential to e-commerce? What are the essential services provided by e-commerce e

Importing and Exporting

Please answer either yes or no and provide 2-3 paragraphs on each topic and along with references: 1. "Exporting E-Waste: A Useful Solution?" Yes/No 2. "Should Countries Limit Foreign Control of Key Industries?" Yes/No

Importance of Technology

The global marketplace has been impacted by technology recently. Discuss how technology has impacted the legal aspects of the purchasing process. Has technology also affected the ethics of purchasing?

Free Trade, Trade Deficit, and Global/local thinking

1. If free trade is intended to benefit nations why do nations restrict trade? Cite examples of "healthy" trade barriers. 2. What is a trade deficit and a trade surplus? Why are they considered so important? What are some factors that impact the numbers? What do you think it means? Give examples 3. Describe "think global a

Restriction on International Trade

Should we restrict international trade? Why or why not? What are the pros and cons? Let's see both sides of this complex issue. HINT: Remember that there are different and legitimate stakeholders - all of whom have different perspectives about this issue - employees, employers, consumers, business owners, investors, businesses

International Trade and the European Common Market

1. Country A and Country B create a free-trade area. Before the creation of the free-trade area, Country A imported 1 million TVs from the world market at a cost of $500 per TV and added a tariff of $30 per TV. It costs $110 to produce a similar TV in Country B. a. Once the free-trade area is established, what will be the cost

Comparative Advantage, Free & Fair Trade and Budget & Trade Deficits

I am seeking some guidance for the following questions with regards to international trade: 1) What is comparative advantage and how does it affect business? 2) What is the difference between free trade and fair trade? 3) What is the difference between the budget deficit and the trade deficit, and how do each affect the eco

Discussing Production and Trade

Hi, I need some assistance with these questions. I am having difficulties formulating an answer. Questions: 1. Out of all of the possible production points along a production possibilities curve, which one of those points does a nation select and why? 2. International trade theory says that relative product prices would di

Economics and International Trade

1. Explain what is wrong with this statement: "Opening trade drives prices of goods and costs of factors into equality between countries, but once prices and costs equalize, there is no longer any reason to trade." 2. What is mercantilism? 3. If a country can produce a product efficiently but there is no domestic market

Arbitration in international marketing

Case: No matter what line of business you're in, you can't escape sex. That may have been one conclusion drawn by an American exporter of meat products after a dispute with a German customer over a shipment of pork livers. Here's how the disagreement came about. The American exporter was contracted to ship "30,000 lbs. of fresh

International Trade - Dumping

a. Why is an exporter who builds market share at risk of being accused of dumping? b. Why is the steel industry in the United States so opposed to dumping?

Effective Cost of Trade Credit: Example Questions

1) What is the nominal and effective cost of trade credit under the credit terms of 3/15 net 30? 2) A large retailer obtains merchandise under the credit terms of 1/15 net 45, but routinely takes 60 days to pay its bills (because the retailer is an important customer, suppliers allow the firm to stretch its credit terms). Wha

Taylor, CPA, is engaged in the audit of Rex Wholesaling for

Taylor, CPA, is engaged in the audit of Rex Wholesaling for the year ended December 31. Taylor obtained an understanding of internal control relating to the purchasing, receiving, trade accounts payable, and cash disbursement cycles and has decided not to proceed with tests of controls. Based upon analytical procedures, Taylor

Explain why, given the advantages of international diversification, some firms choose not to expand internationally. As firms attempt to internationalize, they may be tempted to locate their facilities where product liability laws are lax in testing new products. Describe some examples in which this motivation is the driving force behind international expansion

Explain why, given the advantages of international diversification, some firms choose not to expand internationally. As firms attempt to internationalize, they may be tempted to locate their facilities where product liability laws are lax in testing new products. Describe some examples in which this motivation is the driv

Free Trade Zones

What is a free-trade zone? Identify three techniques and provide examples of how firms and countries can benefit from having free trade zones.

The Relationship Between Trade and World Output

Please discuss the following: Explain the relation between trade and world output. Describe the broad pattern of international trade. If the nations of the world were to suddenly cut off all trade with one another, what products might you no longer be able to obtain in your country? Using an Indian company involved in the busi

Ingram Office Supplies, Inc: Total free trade credit

Ingram Office Supplies, Inc., buys on terms of 2/15, net 50 days. It does not take discounts, and it typically pays on time, 50 days after the invoice date. Net purchases amount to $450,000 per year. On average, what is the dollar amount of costly trade credit (total credit-free credit) the firm receives during the year? (Assume

Buskirk Construction use of Free trade credit: Calculate amount for one year

Buskirk Construction buys on terms of 2/15, net 60 days. It does not take discounts, and it typically pays on time, 60 days after the invoice date. Net purchases amount to $450,000 per year. On average, how much "free" trade credit does the firm receive during the year? (Assume a 365-day year, and not that purchases are not of d

HUMAN RESOURCES MANAGEMENT

Discuss: While trade union may have been necessary a hundred years ago the Enlightenment of modern employers makes them unnecessary. Create an introduction, a thesis, support and conclusion.

International competitiveness: Motivational packages for automotive multinationals

In order for multinationals to continue expanding their operations, they must be able to attract and retain highly qualified personnel in many countries. Much of their success in doing this will be tied to the motivational package that they offer, including financial opportunities, benefits and perquisites, meaningful work, and

Rally Round the Trade Name

According to the video "Rally Round the Trade Name" how important was the fact that Herman started to use the name Rally first in that particular geographical area.