Balance of Trade Issues - Essay Example

As opposed to free trade, it makes use of methods like tariffs, restrictive quotas, duties, taxes, and other regulations to discourage people from importing goods and services.

The North American Free Trade Agreement, abbreviated as NAFTA, is a free trade agreement between the governments of the United States, Canada, and Mexico, started in January 1994.

The main goals of NAFTA include the reduction of barriers in trade between the countries. It aims to increase and regulate trade between countries by minimizing and eliminating tariffs and duties on products and services (Foundation).

European Union is an economic and political jointure that consists of 27 European countries. Established in 1993, it aims to establish a single market through a standardized set of laws that all member countries have to adhere to. The laws mainly come under the domain of trade, fisheries, agriculture, and regional development.

Ethics refers to a code of principles and values that direct a person’s actions in his personal or business life. It means knowing the difference between what is right and what is wrong and then choosing the right way to do things.

Social responsibility refers to an ethical ideology that says that any individual or organization has an obligation to society. Any individual, company, or country should act in a way that inflicts the least amount of harm or damage to its environment and must take steps that are beneficial to society as a whole.

The main purpose of any business is to maximize gains and minimize losses. In a non-profit organization, however, these gains are not monetary. Nonetheless, the sole purpose of the existence of any business is to make profits. Therefore, this should be given the highest priority.

However, it is also the firm’s responsibility to abide by the particular state’s rules and regulations, standards, and moral obligations as well. Failure to do so, in the long run, affects the very purpose of the firm i.e. making profits. Therefore, the firm should not only be focused on making profits and should adapt its offerings and procedures to the regulations and other moral obligations even if that translates into some additional costs and compromise on the profits.

The business should understand long-term gains are better than short-term ones and the only way to make long-term profits is by following the right procedures.

The success of the business can be measured by the following metrics:
- Profitability of the business.
- The increment in customer base.
- Efficiency of business processes.
- Degree of customer satisfaction.
- Degree of Employee satisfaction.
- Degree of Owner satisfaction.

 As a business, I would have obligation to the following entities (in order of priority):
- The customers – customer satisfaction is the basis for any business’s core objective of profitability.
- The employees – customer satisfaction cannot be achieved if the employees are not motivated enough to work.
- The creditors – all lenders such as banks, shareholders, investors, etc. must be paid back or compensated through other means, in due time to avoid additional costs and lawsuits, giving the company a bad name.
- The government – the company must make sure that its processes adhere to the regulations and comply with the standards for the smooth running of the business.

Unethical lending practice simply means that the lender lends a loan to a consumer who cannot pay it back. The lenders are somewhat aware of the situation, but still, immorally, lend the loan by setting personal belongings as collateral (Howell).

Companies also engage in immoral business practices through accounting fraud. An instance of this was the American energy company, Enron, which used a systematic and planned accounting fraud known as the Enron Scandal.

Individuals also indulge in immoral practices in the commercial world at the expense of others. An example of such a practice is the Ponzi scheme operated by Bernard Madoff that defrauded thousands of investors, totaling billions of dollars.