Impact of Regulations on International Trade

The study explores the impact of regulations on international trade and commerce, focusing on the role of regulations in developing the economy and the main economic effects of regulation. It discusses the importance of resource distribution, comparative advantage, and market failure in the context of international trade. The study also examines alternative regulatory options and the challenges faced by developing nations in implementing regulations. Overall, it highlights the significance of regulations in improving trade and economic growth.

Running head: International Trade
International Trade
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Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................4
Problem statement......................................................................................................................5
Identification of alternative regulatory options..........................................................................5
Roles that regulations play in developing the economy.............................................................9
Overview of the US regulatory system....................................................................................11
Main economic effects of regulation........................................................................................13
Comparing the burden of regulation on US and other countries.............................................14
Economic theories of trade agreements...................................................................................16
Conclusion................................................................................................................................25
Bibliography.............................................................................................................................28

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Introduction
The whole study is going to discuss regarding regulations that are lying within any
country and how the regulations are having impact on the international trade and commerce.
The concept is important from the global perspective because the incorporation of better trade
and development will improve the position of the country so that they can improve their
terms of trade. This will definitely help the countries to increase their gains from trade.
Throughout the improvement in the comparative advantage, the improvement in the
economical tantrums and distribution of both capital and human resource is possible that will
definitely increase the resource capitalisation. This will definitely allow the financial and
non-financial institutions to put up a regulation in the economy. Improvement in the resource
distribution is important in the sense that through the utilisation of better accessibility in the
world market the countries like Russia and other developed nations will bring an
improvement in their comparative advantage. Not only this, but the government regulation
will minimise the economic hurdles and will bring in perfection in the market.
Practising good and healthy regulation will definitely allow the economy to restrict
the occurrence of market failure. It is important in the sense that through the utilisation of
regulation and standards, some of the economic sectors will grow and some of the economic
sectors will be having lean. It has been seen that through involvement of better trade
regulation, stakeholders and intermediary will be allowing the process of efficient utilisation
of resources. This is one of the important factors in the sense that through the participation in
international trade, the economic improvement is going to increase the global terms of trade.
Through this trade, the benefited country will have to pay less while importing goods from
abroad if the terms of trade is favouring them. On the other hand, if the terms of trade are
going against them then they have to pay more while making both import and exports. Most

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of the countries are improving their position regarding the comparative advantages and
opportunity costs. Through the incorporation of comparative advantage, the economies in the
international trade will be going to highlight the importance of the resource allocation and
will be able to indulge better technologies that not only increase the production capability of
the economy.
Through the innovations in the business, the supply chain management is going to
provide better quality of goods. This is an important issue in the sense that in order to
increase the innovation in the economy will bring in best tools for using the human resource
capital. In other words, through the improvement in the gain from trade will definitely
increase the global comparative advantage. The economy will be bringing in efforts so that it
will be increasing the man power of the economy that will not only allow the improvement in
the resource capacity but will also distinguish the goods and services that will be part of
tradable assets. Before implementing regulations, it is important for the government to
understand the meaning of global interconnection of tools and technology.
Through the incorporation of tools and technology both, the developing and
developed countries will be mainly looking to indulge the development of better accounting
of monitoring of resources. On the other hand, the innovation in the technologies will
obviously bring the communication within the economy strong. It is highly important for the
government to increase the stabilisation of the policy. The main aim of the government is to
restrict the market failure so that they can indulge the improvement. It is highly important for
the economy to predict the market failure and will be willing to incorporate the information
regarding the price of the goods and services mainly for the benefit of the economy but will
also aim to maximise the profit opportunity that the participating countries will be willing to
incorporate.

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Through the establishment of better economic ground, the international trade will be
one of the crucial aspects so that they can indulge the improvement in their policies in the
form of monetary and fiscal policies. The countries will also get indulged to the improvement
of capabilities through regulation but this is also true that most of the small economies will be
the one those will be suffered the most. Regulation will not only bring problems for them but
will also make the market more competitive for them to survive. It is common that initially
government takes many regulations for the developing countries but actually they resist the
future economic growth at least for 5 years as they do not get the access to best technologies.
Discussion
International regulatory cooperation (IRC) is now the focus of the government that is
dealing with the international trade and commerce due to the advent of the Transatlantic
Trade and Investment Partnership (TTIP) and the Transpacific Partnership (TPP). On the
other hand, trade policymakers are using IRC as strategy to minimise the regulatory biasness
and trade costs in order to improve trade. It has been acclaimed both by OECD and non-
OECD members that the trade regulations are important and will help the countries to achieve
long run growth and objectives. Introduction of Better regulation, Smart regulations,
Regulatory management and Good Regulatory Practices (GRP) will increase the development
of trade1. Moreover, in order to increase the welfare of both society and individual most of
the countries do take the help of the regulatory authorities. Moreover, the Regulatory Impact
Assessments (RIAs) is systematic approach that has enabled the development of better
policies that will not only indulge the development of the resources so that the countries
doing international trade will be able to attain the objectives that has been set in order to
1 Adhia, N., 2017. Happiness Economics and Its Discontents. Journal of Private Enterprise, 32(1), p.77.

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gains from trade2. The need for public intervention and possible option for intervention will
be identified by RIA. Some of the key steps for RIA regarding the international trade and
policymaking will determine the efficiency level of international trade.
Problem statement
It is important to identify the problems that an overall economy in the global level is
going to face. Problems that are being faced by the countries and companies due to trade
regulations can be classified into two main groups in the form of market failures and
regulatory failures. Among the market failure, asymmetric information, barriers to market
entry, monopoly power, transaction costs and other market imperfections that will lead to
market inefficiencies. On the other hand, presence of the market failure will lead to the
development of instable price, increase in corruption level, entry of corrupted business units.
On the other hand, presence of regulatory failure will definitely allow the incorporation of
proposing administration that sometimes bring in new policies and if administration is setting
up new targets for the country. One of the major problems that most of the developing
nations face is that if they want to ignite the development of new requirements then countries
will not be able to use their resources in an efficient manner. On the other hand, through the
improvisation of better development of policy framing that will definitely increase the
chances of being involved in the end.
Identification of alternative regulatory options
Alternative regulatory options is going to highlight the regulatory options is going to
indulge in the improvement in the economy. In the developing or developed nations,
practising regulations will automatically allow the incorporation of development and
2 Antonakakis, N., Balcilar, M., Gupta, R. and Kyei, C., 2017. Components of economic policy uncertainty and
predictability of US stock returns and volatility: evidence from a nonparametric causality-in-quantile
approach. Frontiers in Finance and Economics, 14(2), pp.20-49.

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channelization of resources into the desired level3. Now in order to increase the trade
regulations the cost that is incurred in the trade is going to indulge both the private costs and
social costs. For example, a company is having X number of employees and the company is
producing Y quantity of goods. Now in order to produce that Y quantity of goods, the
company is making the environment polluted then in order to minimise the pollution, the
government is giving two options. The first option is that the company should pay a tariff of t
in order to continue with the current level of production and the second option is the firm
have to reduce the rate of production4. Now in order to align the cost along with the
production, the firm will obviously choose the second option. Now in order to achieve the
second option, the firm will automatically sack down employees. Thus, sometimes-
alternative regulatory options are forcing the economy to take some of the strong factors.
This is important in the sense that the employees those will be sacked are paying the price for
the increase in the pollution in the environment.
This type of example can be found in other sectors too. Practicing good regulation
practise will help the government to look into the innovation and the technologies that are
being used in the economy. Through the improvisation of better technology of regulating the
economy, the monitoring policy of the government will automatically incorporate the
business in the form of better development. On the other hand, through the improvisation on
the development of resources will definitely allow the betterment of the performance of the
economy. The participation of the government in improving the prices for many social
activities is helping in the development of better economy. Sometimes, through the
regulations, the government is mainly looking for the development of swift flow of the
3 Anuar, A. and Huan, A., 2019. Multilateral Matters: January 2019.
4 Benton, D.C., Thomas, K., Damgaard, G., Masek, S.M. and Brekken, S.A., 2017. Exploring the Differences
Between Regulatory Bodies, Professional Associations, and Trade Unions: An Integrative Review. Journal of
Nursing Regulation, 8(3), pp.4-11.

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resources from their natural height to highest value to the society. Most of the private
organisations will be looking to maximis4e their personal values and in order to increase their
personal values they sometimes over price the goods that is not the true reflection of social
value.
With the government intervention to correct the prices, the government aims in
increasing the efficiency and the extent of the resource distribution. Through the
incorporation of the monetary and fiscal policies will allow the economy to identify the
resource distribution that will definitely increase the overall efficiency of the whole
economy5. Imperfect information or asymmetric information is one of the main
characteristics of market failure. Through the participation of the government will allow the
information to be spread among public in an efficient manner. The information that are
available regarding the trade, price and technologies that are being used in order to produce
the goods will also invite the development of investment opportunity. On the other hand, the
improvement in the economic zones through the regulations will allow the economy to grow
in an improved matter. This is because in some of the country, the free market is going to
help the economy and it is the main responsibility of government to identify the opportunity
of free market.
The main difference between principle based regulatory system and that of
implementation based regulatory system is mainly going to highlight and identify the
capability of the government to implement certain level of the policy and regulations.
Through the intensive use of the theories and policies, it will be easy for the economy to
implement strong policy that will definitely increase the overall efficiency in the economy.
Through the implementation of principle based regulatory system, the economy will be more
5 Bery, S., 2018. The G20 turns ten: what’s past is prologue. Bruegel Policy Contribution Issue n˚ 20| November
2018.

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adjusted to the changes in the price and economic booms or recession. On the other hand,
principle based regulatory system can bring improvement in situations can be characterised
by complaints. Through the improvisation of the development of prescriptive rules, based
approach will allow the business units and other bodies to follow the compliances by any
means. It has been seen that using bright line regulations are helping in the development of
technologies that may make them more counter-productive in nature6. This increase in the
production ability of the companies and the countries will be willing to identify the better
technology for using the resources. The urge for using better technology will come either
from public interest or from social perspective. This is important aspect in the sense that
through the utilisation in the technologies, the economy and the business house will be able to
bring in better business in the alternative form and will definitely allow the incorporation of
better production is closely associated with practising better regulations.
Sometimes, the government decisions is too some extent bias in terms of better
influence of special-interest money and politics and this is the situation where the free market
outcomes are impartial. During this situation, the efficiency of the market will only come
with the government participation7. This type of situation is most common in case of the
developing nations. In the initial phase of development, each country is like newborn baby. In
this phase, the baby requires the guidance of mother is required and likewise in the newly
emerged country require the guidance of the government. In order to prevent the economy
from the foreign aggression, government has to intervene in the form of regulations8. The
6 Boshoff, D.M.M., 2017. Draft Regulations for the Domestic Trade in Rhinoceros Horn, or Part, Product or
Derivative of Rhinoceros Horn.
7 Bushnell, J. and Humber, J., 2017. Rethinking trade exposure: The incidence of environmental charges in the
nitrogenous fertilizer industry. Journal of the Association of Environmental and Resource Economists, 4(3),
pp.857-894
8 Ciuriak, D. and Ptashkina, M., 2018. The Digital Transformation and the Transformation of International
Trade. RTA Exchange. Geneva: International Centre for Trade and Sustainable Development (ICTSD) and the
Inter-American Development Bank (IDB.

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regulations can be a part of the trade regulation, price regulation, fiscal and monetary controls
and many more.
Roles that regulations play in developing the economy
However, the role that regulations play is that they try to identify the areas within the
trade where the government intervention is important. It is important to identify the areas that
will definitely allow the incorporation of resource development. Sometimes, government
regulation helps in restricting the market failure. This happens because of the fact that in
these situations costs and benefits are not being truly reflected by the price of the
commodities. On the other hand, government regulation is also helpful for implementing
entry barrier9. This regulation of the government will support the development of economic
growth by allowing competition and innovations in the product technology and product
quantity. This will improve the long run competition within the economy and will eliminate
the short run over sightless of the country. If the net benefits that will be obtained from the
business are made transparent by the government, then the investors, shareholders, consumer,
worker and other employees will feel transparent regarding the improvement in the business.
Irrespective of having high growth opportunities in the countries having strong
regulations, some of the individual small business companies will not support the regulation.
One of the reasons is that small business units will not be able to compete with the outer
industries. This is important in the sense that through the development of better technology
will bring in more economic growth and will allow the companies to increase their resource
utilisation and they will be mainly looking to increase the resource channelization. Most of
the studies related to the regulation claims that regulations always brings better level of
competition in the market by bringing innovation in their products. It is important in the sense
9 Committee for Economic Development of The Conference Board. (2019). Regulation and the Economy.
[online] Available at: https://www.ced.org/reports/regulation-and-the-economy [Accessed 25 Apr. 2019].

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that through the improvement in the technology the companies will be mainly willing to
develop the resource gap that is helping other countries to grow. In order to bring in effective
regulations that will help the incorporation of better involvement of resources will allow the
business house to indulge in better improvement in business. This is important to identify the
major resources that will help in gaining from the trade. On the other hand, through the
resource utilisation, the improvement in better gains from trade will allow the developing and
developed countries to increase the momentum in the economic growth. It is important for
the countries indulged in the international trade that will allow the economy to highlight their
gaps. This is true in the sense that through the increase in the valuation, the countries will be
willing mainly to highlight gaps in their trade level.

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Overview of the US regulatory system
Figure 1: Total spending by Federal government on Regulation
(Source: Committee for Economic Development of The Conference Board, 2019)
The above diagram is explaining the fact that in the recent years, the US economy has
spent more than 50% on the social values that is closely related with the social values.
Moreover, the introduction of the resources will definitely allow the economy to value their
social norms and responsibility10. Increased amount of social value will definitely increase the
opportunity to trade off. Now in order to increase the development of the economic
conditions government will allow the economy to increase the resource distribution. Through
the incorporation of better business environment will allow the trading economies to increase
their distribution of the employability. Competition policy and regulation in US,
transportation industry comprising of airlines industry, communication industry in the form
of TV, telephone and internet have been predominantly got affected by regulations and many
more11. The incorporation of regulation from the government is also affecting the sectors
10 Datta, N. and Dhingra, S., 2017. 18 What next for US-Europe trade policy?. Economics and Policy in the Age of
Trump, p.193
11 Dhingra, S. and Sampson, T., 2016. What kind of relationship with the EU is best for the UK economy post-
Brexit?. LSE European Politics and Policy (EUROPP) Blog.

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providing consumer safety and quality product. Significant positive impact has fall on labour
markets and because of strong regulation; provision of minimum wage, overtime pay has
been implemented within the economy. Through the implementation of the strong regulation
in the economy, the health care sectors are getting huge improvement. Affordable Care Act is
going to highlight the incorporation of the payments that will be done by the patients
regarding the services that will be consumed by them only.
The main agenda for the incorporation of regulation is to increase the long run growth
of the economy. After the global financial crisis in 2008, the concern has been increased
regarding the fact that excessive amount of regulation is holding back the amount of
investment in the economy. However, strong regulations have been helpful for the increase in
investment that encounters the cyclical recovery of the economy. Coming back to the point of
incorporating regulation in the economy, the economically significant rules have affected the
economy by $100 million or more within any year.
Figure 2: Economically significant rules published by government

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(Source: Committee for Economic Development of The Conference Board, 2019)
The US economy is going to portray the growth that is mainly helping the
development of economic growth. This has helped the economy of US and has enabled the
development of regulation in the international trade that will definitely indulge the
incorporation of better resources so that the countries those who will be willing to establish
them in international trade will be mainly looking to develop the overall growth in the
economy. Through the indulgence of better regulation, the countries that are indulged in the
economy will definitely increase the resource distribution that will definitely allow the
economic resource distribution.
Main economic effects of regulation
It is important to understand the effects of regulations that will signify the importance
of the development of strong communication in the economy. This will definitely allow the
resources of an economy to produce a particular product within the economy. They will
definitely try to give better input in order to increase the overall efficiency of their production
technology. Not only this, the presence of strong regulation will bring vibrancy and
competitiveness within the industries regarding the development of monitoring power that
will identify the firms that are less successful in nature12. Through the importance of strict
regulations will allow the development of resources that has taken the help of better
improvement in resource utilization and will definitely allow the countries to indulge in a cost
and benefit analysis regarding the public and private goods. Macroeconomic and employment
effects will be another key factor that will definitely allow the improvement in the economy
as well as their variables.
12 Economic Policy Institute. (2019). Regulation, employment, and the economy: Fears of job loss are
overblown. [online] Available at:
https://www.epi.org/publication/regulation_employment_and_the_economy_fears_of_job_loss_are_overblo
wn/ [Accessed 25 Apr. 2019].

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Comparing the burden of regulation on Russia and other countries
From the report The Council on Foreign Relations’ 2015 report, “Quality Control:
Federal Regulation Policy,” the impact of regulation is very harsh on the US economy, the
Economy will require a smart regulation. Doing business provides quantitative indicators on
the business regulations and protection of property rights13. Even the OECD also claimed the
fact that burden of regulatory burden is comparatively low in US compared to other
countries. However, in 2008, the US was having most friendly market structure and the
regulatory stance is going to indulge the improvement in the economy. Many studies have
claimed that in order to indulge in better regulation within the economy will obviously allow
the country to focus mainly on better information. This will incorporate better monitoring of
the government regarding the improvement in the gaps and better monitoring of the
government will bring in best information regarding the utilization of resources. Not only this
but better collaboration among the government and the stakeholders regarding the regulation
will bring the resource utilization that will bring stable and long run effecting regulation
within the economy14. In order to highlight the importance of regulations, it is highly
important for the economy to indulge strong communication that will easily allow the
economic data to be collected in advanced way so that the economy will be mainly dealing
with the incorporation of the resource generation. On the other hand, through the
improvisation of better development of the capabilities that will not only indulge the
channelization in the resources but will definitely allow the policymakers to increase the
distribution of the resources into correct way so that economies participating in the long run
international trade will definitely improve the terms of trade. Though the utilization of
13 Eisenbarth, S., 2017. Is Chinese trade policy motivated by environmental concerns?. Journal of
Environmental Economics and Management, 82, pp.74-103.
14 Fiorini, M. and Hoekman, B., 2017. Economic Governance, Regulation and Services Trade Liberalization.

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resources the economy will understand the resources potentiality that will easily identify the
resource distribution.
Through this kind of practice, the terms of trade will definitely increase the valuation
of the goods and services that are being produced in those economies will indulge in the
development of better prices that will actually reflect the social values15. In order to identify
the terms of trade, the regulation will bring the economic performances into limelight.
Economy will increase their performances as the global trade increases and they will claim to
the fact that in order to increase the resource distribution it is important for the economic
growth to utilize the gains from international trade. To take the positivity out of the
globalization so that they can increase the rate of production and they will be able to indulge
the better benefit of the economy. Through the incorporation of better involvement of
resource, distribution and they will be willing to underline the importance of existence of
capital industry and that will increase the internalization of the resources that will
automatically improve the substitution policy through which the development of the
innovation is going to increase the development of better resource distribution. Bringing
continuous innovation in the international trade will automatically allow the countries to
perform well and they will be mainly helping the development of better utilization that will
not only increase the development of resource channelization and will readily increase the
involvement of stakeholders that will help the government to increase the rate of investment
within the countries16.
15 Fuchs, C., 2017. Donald Trump: A critical theory-perspective on authoritarian capitalism. tripleC:
Communication, Capitalism & Critique. Open Access Journal for a Global Sustainable Information Society, 15(1),
pp.1-72.
16 Gittleman, M. and Kleiner, M.M., 2016. Wage effects of unionization and occupational licensing coverage in
the United States. ILR Review, 69(1), pp.142-172.
Gostin, L.O. and Wiley, L.F., 2016. Public health law: power, duty, restraint. Univ of California Press.

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Economic theories of trade agreements
The modus operandi of trade agreements is mainly to maintain the balance between
flexibility and commitments. Now if the presence of flexibility is too much within the
economy then the commitments will fade away. On the other hand, lack of flexibility will not
allow the countries to make deep commitments and trade off between the flexibility and the
commitments is one of the biggest issues in the world economy. From the period of
Keynesian economy, the argument against free trade is important in order to increase the
efficiency of economy has been put forward but also the neoclassical school of economics
protested against this view. They claimed that free market would destroy the capacity of
economic resources. Standing on this promise, there is no need for the trade agreements but
this will not be helpful for the long run. This is because of the fact that in the end more
development in the trade composition, more competition will come and they will make the
weak countries to face more struggle. Through the incorporation of regulation in the form of
trade, agreements will definitely allow the weak economics to incorporate self-defense
mechanism. Most of the economics have batted in support of the trade agreements that have
been written in GATT and WTO. It has been said that without the absence of the trade
regulations the country will be manipulating the terms of trade. Terms of trade are the price
of imports relative to exports. Secondly, the economic and political problems that are faced
by the government while setting the trade policies. Lack of trade regulations is one of the
important situations in the sense that through the incorporation of trade agreements, loss of
global welfare is possible.
Suppose two big countries, country A and country B has imposed a tariff on imported
goods. The immediate consequence of these effects is that the demand for the good in the
international market will fall by huge margin. This is because of the fact that domestic
residents will buy less of those goods at high domestic price. Responding to this situation the

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other country will automatically depress its price in the international market. This situation is
more or less common and its termed as prisoner’s dilemma17. This is a tricky situation and, in
such situations, the players in the game are not at all ready to be settling at the Nash
equilibrium. This kind of situations is very tricky for the international trade market. In spite
of having so many problems that are associated with the trade regulation, there are many
advantages too.
One of the advantages that is coming in the way of the trade regulations is the safety
of values that is lying within the economy that is going to indulge the improvement in the
business values. Establishment of business value will allow the government to indulge the
new projects so that trade liberalization is possible. Through the incorporation of the
insurance mechanism, the government will be willing to preserve the income stability.
Maintaining income stability in the era of globalization will definitely a big issue and in order
to increase the resource channelization it will be indulging the improvement in the money
growth. Thirdly, the trade remedies are part of adjustment policy that will help the economy
in controlling the variation in costs for the domestic country. Through the incorporation of
the high costs, variation will automatically allow the domestic economy to pay more. The
fourth benefit is in the form of compensation that is actually acting as the improvement of
trade liberalization. Moreover, the flexibility is going to make the industry more competitive
and will be able to bring in more improvement in the trade liberisation will bring
improvement in the policy management. Domestic uncertainty that is present can be removed
using flexibility. If the government is having strong flexible actions then the output will
increase with the use of modern tools and technology. On the other hand, through the
improvement in the terms of trade will allow the government to increase the resource
17 Grobbelaar, S.S. and Meyer, I.A., 2017. The dynamics of regional economic integration: a system dynamics
analysis of pathways to the development of value chains in the southern African customs union. South African
Journal of Industrial Engineering, 28(1), pp.73-89.

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improvement and will bring forward the desired level of economic growth in the economy.
Through the utilization of the resource, the improvement in the trade and commerce will be
helping the improvisation18. On the other hand, flexibility will also bring the economic agents
to be risk averse and they will take a decision staying within an economy. On the other hand,
through the technology of resource utilization, the rule of labor is going to make the
employees more flexible in nature. This will definitely bring the improved level of employees
and these employees will be highly skilled in nature.
Impact of the globalization is going to fall on the use of better amount of resources.
On the other hand, through the development of the better supply chain management the
economy will get better source of industrialization that will truly increase the growth of
economy. On the other hand, through the introduction of better technologies will definitely
increase the technological spillover19. The improvement in the technological spill over will
basically allow the economic background to change their position and they will be able to
compare their position with the previous autarky situations. Implementation of Hecksher-
Ohlin model will help the company to identify the equilibrium price of trade and autarky
price will shift due to strong regulations, as the trade will not be smooth.
Taking the example of India, the role of state is crucial. Through the participation of
the government the economy of both state and central are going to increase the development
of economy. The joint collaboration between state and central will identify the information
gaps that are present within the economy and will allow the implementation of the resources
that will easily bring in better amount of technology. Primarily through the utilization of
18 Gur, N. and Bjørnskov, C., 2017. Trust and delegation: Theory and evidence. Journal of Comparative
Economics, 45(3), pp.644-657.
19 Halim, R., 2019. et alii, 2019. Understanding the Economic Impacts of Greenhouse Gas Mitigation Policies on
Shipping What Is the State of the Art of Current Modeling Approaches?—Executive Summary for Policy-Makers
in International Maritime Transport. Washington, DC: World Bank.© World Bank.

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resource development, the economy will be boosting them with the best available raw
materials. On the other hand, through trade, the participating countries will learn technologies
that are being used by other countries20. It is important for any country to increase the
resource distribution and to increase the growth of economy. Improving the development of
international trade through the impact of regulations will bring the development of economic
balance regarding the resources.
Figure 3: India’s globalization merchandise trade
(Source: The State, Economic Growth, and Development in India, 2019)
The concept of merchandise trade has increased by huge margin. On the other hand,
the 2005 was the year that saw huge trade regarding merchandise. Moreover, the
implementation of political improvement, the condition in India has improved from the
economic perspective. Previously the Indian Economy was more focused on the development
of the agro-based cultures that will definitely was predominant. However after the second
five years plan, the Indian economy started to think beyond industrialisation. They started to
believe that service sector is one of the industries that will be growing and will be looking
20 Halim, R.A., Smith, T. and Englert, D.P., 2019. Understanding the Economic Impacts of Greenhouse Gas
Mitigation Policies on Shipping: What Is the State of the Art of Current Modeling Approaches?.

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into the phase of economic development. On the other hand, the before the fourth five year
plan, the economy of India was not having that much level of growth.
It is important to increase the development of service sectors and the IT industry so
that the economy will be having trust on the service sectors. This is important in the sense
that through the globalisation and expansion in the trade and commerce, the resource
development is going to help in the improvement in the business. Through the initiative the
development of better utility is going to increase both the internal and external demand of the
economy.
One of the slowest growths in India was around 1947-74. During this period, the
Indian economy faced slowest growth within the ten years. Before independence Indian
economy was under the scanner as most the goods that were produced in the economy was
mainly based on the British economy. Most of the commodities were produced in a sense that
most of the demands from the external level were served by the Indian economy. During this
phase of time, the economy was in dilemma regarding the development of the economy and
whether there will be so much dependence on the type of industry. During this phase of time,
the Indian economy was in severe condition and it was such that during that point of time the
Indian economy was in big dilemma. This is important in the sense that through the
improvement in the phases of development of industry. In 1970, the demise of Ballab vai
patel made the situation more badly. It is important for the Indian economy to develop the
resource development of the economy will bring the involvement of faulty government
policies. It is important for the government to take such a policy that will help in increasing
the initiative that will allow the government to clear the hindrance that the economy is going
to face.

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In the economy of India, the improvement of the economy was required because of
the fact that lack of proper monitoring mainly led to the development of the food crisis. The
situation forced India to ask US for subsidized wheat supplies and financial assistance. The
policy of slow shipping of ships and quid quo demanded by India forced the Indian economy
to devaluate the rupee due to external pressure. The financial crisis in 1966 and the aborted
liberalisation of the economy demonstrate the consequence of external pressure that has given
the economy of India extra pressure. Most of the domestic market was following the import
substitution policies that required import of better quality of goods so that they could
manufacture goods of better and superior quality. The intellectual government of the
economy was only battling for the devaluation of Indian rupee and was not paying any
attention towards the development of economy so that crisis can be mitigated. Large
industrialists were preferring for the development of quota through the incorporation of the
Monopolies and Restrictive Trade Practices Act (MRTP) in 1969.
The next level of growth in the economy is during the period of 1975-1980. During
this phase of time, the economic growth of the economy is going at a rate of 5% greater than
normal rate. On the other hand, during this phase, the Indian economy was going through a
flying stage and was truly looking for the development of steady private sector that the
economy was seeing to take off before reaching their glorifying phase. Due to huge
orientation towards the private companies, the Indian economy was open to huge level of
deregulation. At that point of time, the joint venture among the government of India and the
Maruti Suzuki. During that point of time, Suzuki captured the market of the well-known
brand Ambassador that has portrayed the development of new era in the automobile industry.
To some extent during that time, the government of India were more inclined towards
companies like Suzuki and other foreign countries. Establishment of legacy in 1970, the
restriction through MRTP act was resolved. This is important in the sense that through the

22
International Trade
improvement in the easiness of the trade and commerce, the economy will be able to get that
level of revenue and will be more inclined towards the growth of the economy. The initiative
that the government of Rajiv Gandhi took is that they tried to bring Association of Indian
Engineering Industry (AIEI) close to the India government. The Indian economy started to
increase the development of economic output by bringing investments. On the other hand,
through the introduction of relaxation in trade policy the economy is going to achieve the best
phase of the growth. On the other hand, the Indian economy was seeing the future of
development after incorporating the fifth five-year plan. In order to increase the innovation in
the economy, the economy was bringing in more investment in the industries and service
sectors. On the other hand, through the incorporation of this much level of better investment,
the economy will be flourishing. Relaxation of Foreign Exchange Regulatory Act 1974
would have been overturned in 1991. Between 1991-2002, the Indian government received
about US$48 billion. It was not an easy job for the government to release the amount. In that
US$48 billion, only $24billion came through the portfolio and US$24 billion came through
direct investment. The foreign portfolio investment was the most important strategy that took
place within the economy was just focusing on the development of existing industries.
Moreover, through the implementation of better development of resources will allow the
economy to increase the resource allocation that will bring better amount of involvement in
the economy. Companies dealing with high technologies and highly updated software will
automatically allow the economy to increase the development of the resource development
and they have portrayed the fact that they will be willing to improve the resources. This will
automatically increase the capability of the resources. Through the incorporation of better
development of the resource channelization, the economy will be mainly looking for the
development of better policies. Incorporating the better improvement in the policies will
allow the economy to bring in more updated tools and technology that will bring the

23
International Trade
information to be spread out in uniformly. On the other hand, through the motivation of
economic resources will allow the countries taking part in international trade will be gaining
from the globalisation level. Through the improvement in the economy, the boosting power
of the economy will increase that will definitely increase the information and will be able to
identify the gaps that are being present within the economy. In order to increase the
development of economy, the communication among the government and the resources will
be helpful so that the economy will be able to highlight the importance of industrialisation
that will definitely improve the economic benefit. Through the maintenance of the economic
background, the improvement is going to improve the relaxation.
Making an impact on the improvement in the resource utilisation that will bring the
involvement in the resource distribution will not only allow the company to increase their
reach of performances but will also increase the resource distribution. The time is one of the
important factor through the involvement in the long run the economic growth is going to
identify the resource channelization. On the other hand, improvement in the economic
resources will help the economies to identify the gaps in the trade so that the development in
the resource utilisation. Through the import optimisation facility will allow the incorporation
of better trade off that will allow the incorporation of better resource distribution. In order to
increase the identification of resources the economy will automatically allow the trade to go
smoothly. India’s power sector was a failure to the Indian economy. This will be having the
sense of better development of power regarding the better reforms in the infrastructure. Poor
and middle-income economies will have problems in the presence of externality in the form
of regulations. They wanted to focus on the agriculture sector but were forced to look at the
industrial sectors. Incorporation of better accessibility to the policies will obviously allow the
farmers about the agricultural crisis that will be having one of the main impacts in the sense
that through heavy industrialisation will definitely allow the increase in the resource

24
International Trade
distribution. On the other hand, through the resource development, economy will bring in
better involvement of resources that will automatically influence the development of
resources and will be able to identify the pros. Through the improvement in the economic
background implementation of resources will bring the highlight of heavy demand from
industrialisation will allow the economy to highlight the policies. It is important in the sense
that through the importance of the resource distribution the indulgence in the developmental
phase of the economic growth. Thus bringing the development in the phase of growth is an
important aspect in the sense that through this the take off will be possible. On the other
hand, through the incorporation of the better technology will be allowing the economy to
replace the low skilled employees with the high skilled resources. The development of better
incorporation of channelling resources will bring better investment in the economy. Through
the factor of better and highlighted development, the growth of the resources will be looking
to increase the distribution. This will automatically bring in better renovation of both physical
and capital resources so that the economy will be willing to identify the gaps in the better
development of benefits the country is going to have.

25
International Trade
Conclusion
After studying so many things, the study got clear in the sense that improvement in
the trade policies in the form of regulation will automatically increase the development of the
resource distribution. Through the relaxation of the regulation will allow the company to
bring in better involvement of the economy, the resources will be more willing to increase the
channelization of the economy. The better channelization will lead to better amount of the
technological up gradation that will bring the development of the resources through better
amount of investment. Using development and better indulgement of government regulation,
the economy will be using better modes of technology that will increase the production rate.
Most of the economies taking part in the globalised nations will be using better development
of technology will allow the economics to take part in the global phenomenon. It is quite
important in the sense that through better use of the technologies and relaxation of policies
the government is looking to indulge better growth. Making an improvement in the trade
policies and other regulations will obviously allow the domestic and international countries to
perform better.
The developed nations are just having regulations to control the imbalance in terms of
trade and extensive participation of the foreign companies regarding the development of the
business. It is important in the sense that innovation in the technological up gradation within
their economy has developed the urge for the economic growth. This is important issues for
the development of better sources of involvement will allow the development of resource
distribution. On the other hand, through the relaxation of international trade regulations the
economy is going to improve the industrialisation. It has been seen that with industrialisation,
resources will be able to channelize their capabilities. In order to increase the resource
distribution of their economy the government will also have to play a different role. They

26
International Trade
must identify the gaps in the resource distribution and they must take the spot action in order
to minimise the gaps. This is important in the sense that through the improvement in the trade
policy will allow them to portray the future growth of the economy. In order to highlight the
importance of government policy the countries will be mainly allow the smooth operation in
the trade. On the other hand, through the importance in the economic growth the development
of industrialisation will automatically focus on the development of industries. On the other
hand, through the importance in the relaxation of MRTP act the development and smoothness
of international trade will ease the business. In other words using the relevant information
and the development of utility will maximise the gains from trade. Development in the
resource orientation is going to highlight the indigence of strong communication among the
stakeholders and other investors. Through the incorporation of better development of
resource channelization, it has been seen that India was facing a bottleneck situation that was
looking for the development of resource gap and resource distribution. It is important in the
sense that through the improvement in the policies regarding trade and commerce will allow
the indulgence of better increase in the terms of trade for the economy. This is important
aspect in the sense that regulation has impact on labor markets because of strong regulation;
provision of minimum wage, overtime pay has been implemented in the economy. Through
the implementation of the strong regulation in the economy, the health care sectors are
getting huge improvement. Affordable Care Act is going to highlight the incorporation of the
payments that will be done by the patients regarding the services that will be consumed by
them only. This is one of the important aspects in the sense that through the innovation in the
economy the development of resources will bring the improvement in the economy. Through
the importance of better resources and the development of resources will bring initial
improvement in the short run and this will grow in the long run even. Trade regulations are
important in the country, as they will be looking to introduce the development of resource

27
International Trade
distribution that will in turn increase the development of the economy. Through the
importance of aspects the involvement in the resource distribution and will be looking to
increase the overall gaps in the economic criteria. They will be able to channelize the
resources and will be able to increase the capability of the resources. Through the
improvement in the economic performances, the economy will be boosting their
performances.

28
International Trade
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