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The impact of free trade agreements on the economy and small-scale enterprising business

   

Added on  2021-04-21

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Running head: INTRODUCION TO INTERNATIONAL BUSINESSIntroduction to International BusinessName of the Student:Name of the University:Author Note
The impact of free trade agreements on the economy and small-scale enterprising business_1
INTRODUCION TO INTERNATIONAL BUSINESS1Table of ContentsIntroduction......................................................................................................................................2Global business and how it is influenced........................................................................................2Regional trade agreements and bilateral trade agreements..............................................................4Effectiveness of Trade: Case Study of Taiwan............................................................................6Impact of free trade agreements on the economy and the small-scale enterprises as well asconglomerates..................................................................................................................................9Economic effects of the free trade agreements..............................................................................13Conclusion.....................................................................................................................................13References......................................................................................................................................15
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INTRODUCION TO INTERNATIONAL BUSINESS2IntroductionThe issue that has been presented in the question is that the growth in the bilateral tradeand regional integration of the agreements has been a growing feature of the world trade. Theworld trade refers to the trade that takes place among the different countries over the globe.Therefore, world trade facilitates the exchange of ideas as well as currency over the politicalboundaries of countries and nations. The world trade has become the most potential and thenewest feature of the world trade. It must be noted here that there have been over 200 bilateraland regional trade agreements have been in force in the recent times. Furthermore, the regionaltrade agreements have resulted in the increase in the world trade. However, there have beencertain negative effects of the rapid growth in the bilateral trade agreements and the regionaltrade agreements (Lang and Heasman 2015). This particular study aims to reflect the significance of global trade or global business inthe present economy. The complicated changes that have been occurring in the global economyand the impact that they have on a range of enterprises like the conglomerates and the small-scale enterprises. Furthermore, this study also aims to provide an overview into the effect that thedifferent factors of business have on the decision-making process in the globally and theinternationally active firms (Lang and Heasman 2015). Global business and how it is influencedGlobal business has been a phenomenon that has been rapidly growing since the time ofWorld War II. This had been facilitated by the growth in the rate of the economic activitiesespecially in relation to the operations of the international trade and the foreign directinvestment. It must be noted here that these figures had continued to grow throughout the timeexcept when the world economy had been hit by a financial crisis.
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INTRODUCION TO INTERNATIONAL BUSINESS3Figure 1: Growth in world trade volume (Actual and Trend) over the decades (In billionsof dollars)(Source: Uri Dadush 2018)As is evident from the above figure, the volume of global trade has increasedconsiderably over the years, showing a stable positive trend. The volume however, dropped tosome extent during the period of 2007-2009, much of which can be attributed to the GlobalFinancial Crisis, which started with a sub-prime mortgage crisis in the economy of the USA andpercolated to all other major economies, thereby giving rise to an acute recession andcommercial stagnation. However, the effects seem to wither out fast as the trade volume can beseen to rise by the end of 2009 and has been showing positive traits in the current period. However, it is a rigorous task to keep track of the international flow of capital, financialinformation and human resources but the experts are of the opinion there has been a certainincrease or improvement in these components that have essentially contributed to the rapid paceof globalization. Moreover, the growth in the global business has also been facilitated by theincrease in the bilateral trade agreements and the regional trade agreements. It must also be notedhere that the studies of the European based agreements have identified the evidences that indicatethe fact that these agreements certainly increase trade (Lee and Cho 2017). Furthermore, the experts have found out the fact that the bilateral agreements that weresigned between the European Union and 15 Central and Eastern European countries had resultedin the creation of trade for the partners. To be precise, the establishment of the agreementbetween the entities further influenced the importance of trade in the selected region.
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