In the essay “World Trade in Merchandise” the author identifies and critically discusses four factors that may have contributed to the growth of world trade. The combination of short and long-run factors have contributed to creating a widened rise in the prices of the commodities…
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Between the months of June and September, the price index lost 11.5 percent in terms of the dollar. (United Nations, 2009, p.45). The reason that can be identified for contraction in trade is a financial crisis. There was slow growth in output by almost 2 percent and the probability to fall further was high as well. The impact of the decline in total world production was magnified in trade. Since the month of September 2008, the imports and exports of the major developed and the developing countries declined. (World Trade Organization, 2009). The share of developing countries in the total global trade started to rise. It was assumed that a ‘decoupling effect’ would emerge into the picture and the developing countries will be less exposed to the economic downturn. As all regions of the World are slowing at once, the decline in demand conditions is more widespread than that of the past. The second reason that can be accounted for is the presence of increasing global supply chains in total trade. In the production process, the goods are supposed to cross many boundaries and the components in the final product are considered each and every time they cross a boundary. The only way to avoid such kind of effect is to measure the transactions in trade on the basis of the added value at each stage of the process of production. Shortage of trade finance can be regarded as the third reason for the situation. Shortage of trade has lead to a shortage of trade. This problem is receiving attention from government and other international institutions. The role of the WTO has been like an honest broker. It brings the top players to work together that will ensure the availability and also the affordability of trade finance. Protection is yet another factor that contributed to a contraction in trade. Rises in the level of protection are threatening to the prospects of recovery and delay the downturn. In the long run, the aggravated protectionism policy is a source of concern. 2. “Free trade, one of the greatest blessings which a government can confer on a people, is in almost every country unpopular” Lord Macaulay (1800-1859). It is true then and arguably very true today. (a) Critically discuss THREE forms of non-tariff barriers used by governments to limit the free flow of trade and assess their possible effects on consumers in any market of your choice. Nontariff barriers The three forms of nontariff barriers are imported quota, import licensing requirements, and import deposits. American firms have registered few grievances against Dutch firms. The Dutch came up as the neutral traders of Europe as they opted for a level playing field for trade matters. Soft drinks, beer, and petroleum products are the items where excise tax is levied. The excise tax is borne by the importers in addition to customs duty. The European Union aims to create a single international market and harmonize the excise taxes. Nontariff barriers are a measure used by the government to favor goods that are produced domestically over goods produced in foreign countries. The nontariff barriers are used to reduce the volume of imports so as to help the domestic producers. A quota may be defined as the maximum limitation either in physical units or in other terms imposed on imports of a product for a certain period of time.
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Indeed, WTO should be called an extension of GATT because the latter organisation focused on minimising tariffs on goods only to enhance trade. Nevertheless, WTO focuses on eradicating barriers (such as quotas, protectionist policies, duties etc.) on trade of goods and services.
World Trade Organization.The World Trade Organization is one of the relatively younger world organizations that exist to help regulate the international business community. Formally created on January 1, 1995 based upon the dictates of the Marakesh Agreement, the organization replaced the then existing General Agreements on Tariffs and Trade which was created in 1948.
Why do they peruse government tariffs and how do they justify, highlighting what they done and why for this case study, looking also at the strengths).
Key issues highlighted by the case study are the various Governments' interest in the economy of the country and its relation to the health of the private and governmental organizations, how the government supports the organisations particularly the civil aviation industry in developing new technologies and giving sops as an encouragement to this industry.
The rules of the World Trade Organisation have been put into a series of treaties and policies which it maintains. The organisation has a mandate to resolve disputes resulting from trade using dispute settlement systems. When an issue arises after WTO has resolved disputes, the organisation is forced to give decisions that are mandatory to the countries involved.
But the GATT was formed through agreement among trading countries: it did not have the international status of the International Monetary Fund (IMF) or the World Bank, both of which were international groups. Instead, the GATT Secretariat saved the signatories to the GATT.
Much have been written about the factors contributing to the marked growth of trade between the years 1955 and 2004. Several factors have been mentioned and speculated to have contributed to such growth.
However, I personally believe that the four factors that may have contributed to the growth in merchandise in world trade between 1955 and 2004 are the following, but not necessarily in order: 1) the advent of and significantly rapid advances in information technology; 2) the reduction of, or, in some cases, elimination of, tariffs; 3) the rise in income cost; and, 4) the fall in transporters.
WTO has been officially given the responsibility to monitor the national trading policies the occurs around the world aside from the handling of trade disputes and the enforcement of the GATT agreement which considers lowering down the tariff rates and other possible physical and non-physical barriers that could significantly affect the free trading in the world market.
Doha development agenda were launched in 2001 and expected to be completed in 2005. However, this was not realized despite efforts to gather urgent dignitaries (Jones, 2010). Although the G20 endorsed the goal of concluding the talks in