• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

International trade has many potential benefits for participating countries, yet governments regularly impose barriers to trade. By using real-life examples, discuss the benefits of international trade and the reasons why restrictions are imposed.

Extracts from this document...

Introduction

International trade has many potential benefits for participating countries, yet governments regularly impose barriers to trade. By using real-life examples, discuss the benefits of international trade and the reasons why restrictions are imposed. Introduction We have been trading across boundaries since we found ways to move past borders. International trade is exchange of capital, goods, and services across international borders. There are two main ways for international trade, Exporting: Sale a product that produced in a country for consumers of another country, and Importing: Buy a product that produced in another country for consumers of your country. After international trade has taken part in the world in histories, it has gain political, economic, social importance in centuries, with all those importance of international trade; it has many benefits for participating countries. Throughout this essay I will interpret international trade and its potential benefits, and discuss the barriers which are associated with it, and at the end I will contribute a conclusion based on these aspects. Benefits of International Trade There are many items in a country that it doesn't have some that natural resources; such as oil and natural gas, metals, timber, coffee, tropical fruits, etc and this country need or want them, thus, every country in the world trades something from another country. ...read more.

Middle

For instance one of the 21 century's the largest movers in the international trading world that we have today are China where labour is plentiful and cheap, hence it become unprofitable for the domestic producers to compete with the Chinese producers. Thus, a barrier is essential for the survivals of the domestic producers. A barrier for trade is a specific term describes a government strategy that restricts international trade. The most known barriers to trade are tariffs, quotas, and non-tariffs barriers. Tariffs: A tariff is a tax on imports, which is collected by government. Because of tariffs imports decreases and also it raises the price of the good to the consumer. There are 2 mains tariffs type, An "ad valorem tariff" is the percentage on the market value of the imported goods. A "specific tariff", is a tariff of a specific amount of money that put onto market value of the imported goods. Also, tariff can call as duties or import duties. The diagram below is showing us effect of a tariff to a country. (Module Booklet, p.38) As we can see on the diagram; the domestic demand curve is "D", the domestic supply curve is "Sdomestic", and the equilibrium domestic price is "C". ...read more.

Conclusion

(Krugman, Paul R. (1987)) As we can read from a famous theorist is quote (Krugman P.), he wanted to state that as every individual country has some "comparative advantage" in the production of some goods and in the process they should take advantage of them in the international market as foreign money would be coming into the domestic economy. Conclusion To sum up, International trade is very important in now a days for a country's economy and also; imagine that if our choice were limited to what we can produce locally, for instance, as mentioned above because of comparative advantage or absolute advantage one country probability is not able to produce things lower opportunity cost than another country in this case; without the imports and exports, we would spend much money to produce for something than we could buy from foreign countries, and also we would be living in a small world that we have only lack of services and requires, so we might would be living without cotton clothes, tropical fruits, cars, coffee, wine, or even without natural gas that make our houses warm. Humans are needs that products and they always prefer to buy them as cheaper as they can. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our University Degree Applied Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related University Degree Applied Economics essays

  1. Executive Summary Is there a possibility of social choice? ...

    However, Sen fails in his attempt to present a persuasive falsification of Arrow's theorem. Although, Sen may correctly stresses the centrality of informational broadening for resolving the impossibility in social choice, he does not succeed in locating any objective measure of deprivation or welfare which would allow a solid comparison between individuals - the key element in his suggested approach.

  2. Explain the impact of foreign multinational enterprises on the British economy?

    This is usually because any decision made by the subsidiary ultimately lies with the parent company (Jones, 1996). If the terms of an MNC entering a country are not favourable they often simply threaten to pull out. This might not have been particularly pertinent in the case of Britain as

  1. Econometrics Case Study. The main objective of this project is to apply the econometrics ...

    r=1 restrictions , k=3 parameters and T= 262 observation : F=(SSER- SSEU )/1 SSEU /(262-3) Note that : SSER is the residual sum of squares in the equation (yt=b1+b2 xt+et ) = e2t SSEU is the residual sum of squares in the equation (=b1+b2 xt+p1 + wt )

  2. .The focus of this essay will be on developing a marketing strategy for Classic ...

    When Recession occurs some consumers choose to buy only basic beverages like Milk, spring water etc.which in turn affects the sales rate of Coke. Therefore, by this graph and the strategy to sponsor Olympics , we can forecast that there will surely be High demand in 2012.

  1. Globalisation. Discuss the economic, political and social impacts of international trade in the ...

    The risk of the exchange rates can also be a impact between countries due to the different currencies around the world. During recession, countries suffer local pressure to change laws governing International trade to protect the local industries. The most painful and memorable of such incident is the Great Depression.

  2. Indian Oil

    There is still a huge gap between the demand and supply in the oil sector. Being the largest and leader in the Indian oil sector ,the company has to take different measure to keep the products and services competitive .value creation is not limited to only to the market, but

  1. Use economic theory and supporting material to discuss economic reasons in favour and in ...

    This is most likely to be unintentional unemployment since people want to apply for jobs, but the firm refuse to employ more workers due to the increase of wage. Nevertheless minimum wage still caused a negative effect on the economy.

  2. Climate Change And Economic Policy. An Australian Perspective

    money spent on offsets directly in the form of buying credits from firms specific for reducing pollution and or investment on re-forestation and cleaner methods of production. Other arguments exist stating that having a Cap of pollution will force in-efficient firms to find the lowest cost method to reduce their pollution.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work