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Political Economy in Trade & Investment

   

Added on  2021-04-21

5 Pages1077 Words26 Views
Running head: INTERNATIONAL BUSINESS1International BusinessNameInstitution

INTERNATIONAL BUSINESS2Political Economy in Trade & InvestmentThe concept of globalization and the theories of international trade are greatly discussed in this paper. Globalization refers to the organizational processes developed through the international influence. Theories of international trade focus on the trading of goods and servicesupon human interaction (Hill, Cronk & Wickramasekera, 2010). Globalization is seen to extend at a high rate and it is significant in Australia’s income which is a country featured in the international business. On the other hand, theories of international trade suggest that nations should focus on trading with other nations. In this case, trading is beneficial and governments need to focus and trade. Therefore, this paper focuses on the government treatment to restrict andfacilitate trade.Governments use several barriers to trade such as quotas, tariffs, and non-tariffs. To start with tariffs, they are taxes which the government imposes on imports. The government aims to make imports more expensive than the local goods (Anderson & Strutt, 2012). Quotas refer to the limits designed on the number of products set for imports in a certain duration of time. The limitation operates in the favor of local producers minimize the importation of the competitive products as they protect against products dumping (Ravenhill, 2017). Finally, the non-tariffs are introduced to focus on products manufacturing and quality. Non-tariffs are also viewed as the product standards.There are various economic and political reasons why trade and investment barriers are set. To start with the economic reasons, the government targets to increase the assimilation of financial markets to facilitate consistency in the trading practices (Cohn, 2015). Also in case, there is an increase in the global capital inflows as well as international trade the government

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