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    regional trade blocs

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    Part 1
    Details: Small companies typically have difficulty competing against large multinationals when their governments take part in regional trade blocs. What could governments do to help their small companies compete after the formation of such blocs?

    Part 2
    Details: For many global companies, China represents a very attractive market in terms of size and growth rate. Yet, it ranks lower in terms of economic freedom and higher in political risk than other country markets because it has a communist government. Despite these risks, Volkswagen, Isuzu, and Boeing are just a few of the hundreds of companies that have established manufacturing operations in China. This is due in large part to the Chinese government making sales in China contingent on a company's willingness to locate production there. The government wants Chinese companies to learn modern management skills from non-Chinese companies and acquire technology. Some observers believe that when Western companies agree to such conditions, they are bargaining away important industry knowledge in exchange for sales today.

    Should Boeing and other companies go along with China's terms, or should they risk losing sales by refusing to transfer technology?

    © BrainMass Inc. brainmass.com October 10, 2019, 1:58 am ad1c9bdddf
    https://brainmass.com/business/wto-and-gatt/regional-trade-blocs-356808

    Solution Preview

    Small companies typically have difficulty competing against large multinationals when their governments take part in regional trade blocs. What could governments do to help their small companies compete after the formation of such blocs?

    Governments can take several steps to protect their smaller businesses in such trading blocs. For example, such smaller companies can be provided tax benefits and subsidies on loans and advances to make them more efficient and competitive. Such subsidies and access to low cost capital makes such businesses more competitive.

    Government can also assist smaller companies in exploring new opportunities in the region or member ...

    Solution Summary

    Small companies typically have difficulty competing against large multinationals when their governments take part in regional trade blocs. What could governments do to help their small companies compete after the formation of such blocs?

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