International Trade - Exporting and Importing - Essay Example

Download file to see previous pages Some of the popular tractors manufactured and exported by the USA are, John Deere, Ford Son and Kubota.
The companies engaging in international trade have to face various barriers before they can market their produce to oversee countries. The export of tractors from the USA to Chile or Thailand is affected by the following factors;
The demand for the product is the principle factor in the determining the viability of the country to export the product to. An example is the tractor which is used for tilling to produce crops for local and foreign consumption. Chile produces lumber, fruits and vegetable, grapes, pears, onion, wheat, corn, oats, peaches, garlic, asparagus and beans. Its major agricultural exports are fresh fruits, canned vegetables and wines. The government of Chile is encouraging more export from Chile to boost the country economy. Thailand on the other hand is a main exporter of rice. Due to this, tractors, which are used for tilling in large scale farms, are usually in high demand.
Before considering whether to export the tractors to another country. Careful evaluation must be done to ensure that the country does not have the technology or enough facilities to manufacture the product being exported. If the country has the means to produce the same product, then the exporter will be faced by stiff competition by the local manufacturers who may offer the same product at a cheaper price.
The existing trade blocks can p...
, Ecuador and Peru; if these countries have the ability to produce tractors then Chile would be obliged to purchase the tractors from the other member countries. This in turn would limit the exportation of tractors to Chile. Chile has signed bilateral trade agreement with the USA, Singapore and Jordan, this trade agreement encourages trade between USA and Chile, tractors can hence be exported to Chile with ease and the manufacturer can succeed in exporting tractors to this country. Thailand on the other hand belongs to the ASEAN trading blocks. The countries in this trading block are Philippines, Singapore, Indonesia and Malaysia. The free trade agreement between the USA and Thailand have not yet materialized hence the tractor exporter may have difficulties exporting to this country.
Internet
According to Rajib (166), the internet and E-commerce has led to the globalization. Customers from all over the world can search the internet and find products of their choice. Upon identification of the product to purchase they can pay online and also carry out other transactions through the internet. The firm seeking to export tractors to Chile and Thailand can use the internet to advertise the tractors.
Bilateral trade agreements
These are trade agreement between two countries, the agreement dictates what a country will export and import from its partner. These trade blocks can either promote or hinder trade between two countries. If two countries sign bilateral trade agreement then exporting and importing goods becomes relatively easy due to reduction of barriers and excessive import tax. However, these agreements may hinder other countries from exporting products to those with bilateral trade agreements. Exporting tractors from USA to Thailand may be hindered by lack ...Download file to see next pagesRead More