The Paramounted Importance of basic examination in International Trade Policies

The Paramounted Importance of basic examination in International Trade Policies




International trade is largely based on the continued fluctuations in the world-wide economy, this resulting in continued changes with regards to tariffs, trade subsidies and unending amendments of regulations with regards to international trade. “Trade policy and economic Growth”, a paper by Keith Maskus, PhD, focuses on the relationship between trade policies and the growth of the economy or without thereof, the main point of interest of the paper was to establish whether the variance of trade policies will affect the economic growth of any country. The conclusion reached was that open economies tend to grow faster than closed economies, ceteris paribus. consequently concluding that open competition is good in the sense that it improves resource dispensing and the country gains in Investment and innovation.

An organisation that is involved in international trade has to pay special attention to such information. There might not be any countries with closed economies however there are countries that have low imports to the point that they are regarded as closed economies for example Brazil. In 2011 Brazil recorded 13% as its import percentage which was quite low for a country of its stature. Is it not then imperative to regularly be up to date with changes in the trade policies of countries one is interested in pursuing trade relations with? since there is a proven positive relationship between the openness of an economy to competition (consequently meaning the country is greatly involved in trade) and the growth of that country`s economy, this serves as an indication of how lucrative and profitable a business venture would be under such circumstances. The basic examination aspect then comes into play by calculating how much gain or loss would consequence from substantial changes to the policies, which are measures and instruments that can influence export and imports, the objective being the policies influence the trade sector to the consequence of profit for the business venture. one might feel a degree in commercial management is then needed in order to fully understand all the kinks and edges of the international business, and they would be right, but the eventuality is that it will always boil down to intelligence and efficiency in the examination of trends, calculation of possible profit/loss, predictions of future stability or fluctuations in the world economy prompting changes to prices in the trade sector.

There is one other important factor that can alter possible business plans, and that is the politics of the country in question, policies are easily influenced by the politics of the nation, and it is consequently advisable that basic examination be also engaged, this results in better understanding of the country and its stability consequently reducing the chances of incurring a bad business eventuality. Nations are not governed by robots, unfortunately, but are governed by people with interests and human character desires to differ from individual to individual making it difficult to continue a continued effective system. if politicians are elected they tend to focus on altering policies for their own assistance, and the assistance of those they promised (if there are nevertheless honest politician obtainable) from that point it is important that international business consider such factors before pursuing business. chief examples being, whenever there are strikes in South Africa investors tend to shy away, and most of the strikes are birthed from political influence, consequently deeming South Africa an Unstable nation to invest in, or Zimbabwe a nation sanctioned, due to political infringements, making the country undesirable for investment irregardless of the profitability of the business idea. It is consequently an excellent idea to firstly research in-thoroughness to the politics of the country before hand and invest with,much-needed information, guiding the inventive decision made.




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