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Contemporary Business Environment : Assignment

   

Added on  2020-05-08

13 Pages2989 Words192 Views
Running head: CONTEMPORARY BUSINESS ENVIRONMENTContemporary Business EnvironmentName of Students:Student ID:Name of University:Author’s Note:

1CONTEMPORARY BUSINESS ENVIRONMENTTable of Contents1. Introduction:................................................................................................................................22. Free Trade:...................................................................................................................................22.1 Benefits of Free Trade:..........................................................................................................33. Globalization:..............................................................................................................................5Drivers of Globalization:.............................................................................................................6Benefits of globalization:.............................................................................................................7Issues with Globalization:............................................................................................................74. WTO:...........................................................................................................................................75. Regional Trade Agreements and WTO:......................................................................................8Reality Different From principles:...............................................................................................96. Conclusion:................................................................................................................................10Reference:......................................................................................................................................11

2CONTEMPORARY BUSINESS ENVIRONMENT1. Introduction:Since the early nineties of the last century and with the conclusion of the cold war,globalization is stated to be new calamity that has been dictating the world. From the period ofearly 1700, globalization has become a significant part of the international trade. The outcome isthe materialization of the specialism in the global trade in terms of exchange of goods, resourcesand services (Marx 2015). With the ephemeral of time, globalization has become a phenomenon that is deeplyrooted. The result is, a product that has been constructed in the furthest part of the globe couldmake an easy entry into the market that is positioned in some other part of the world. As thistrend has been becoming more established, intellectuals offered it with a theoretical assistancefor the synchronization of such inclination, and that backing has been World Trade Organization(WTO). WTO has been one of the most powerful global bodies. The main aim has always beenin providing commercial interests along with any obstacles in the path of maturity and extensionof global business should be taken care of secondary. This paper would be highlighting the role of the European Union in going against thespirit of free international trade applied by WTO. Globalization has been the result of free or lesslimited trading in goods, services along with capital among several nations. However, thereseveral confronting issues that limit the growth of international trade like financial assistance,trade barriers and violation of the intellectual property rights (Stiglitz 2014).

3CONTEMPORARY BUSINESS ENVIRONMENT2. Free Trade:Free Trade can be stated as a policy that is being followed by some of the global marketswhere the governments of the countries do not limit imports from, or exports to, other nations.Free trade is being exemplified by the Mercosur and the European Economic Area that havetraditional the open markets (Anderson and Yotov 2016).. Governments of many countriesrestrict free trade in limiting the exports of the accepted resources. Other barriers that mightencumber trade takes in the import quotas, non-tariff barriers like the regulatory legislation andtaxes. 2.1 Benefits of Free Trade:Free trade facilitates lower prices for the consumers, exports of increased nature, benefits fromthe economies of scale and the bigger preference of goods. The benefits of free trade take in:a. Theory of Comparative Advantage:This takes into account that through specializing in goods where nations do possess alower cost of opportunity, there might be an increase in the economic welfare for all thecountries. Free trade has the ability in enabling the countries to concentrate in those goodshaving comparative advantage. b. Increased Competition:With additional trade, domestic firms would be facing stiffer competition from abroad.Therefore, there would be more incentives in cutting the costs and increasing the factor ofefficiency. It might avert the domestic monopolies from charging high amount of prices. c. Trade is the engine of growth:

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