Question

What are the major barriers to the International trade? explain how government policies maybe you see their restrict or stimulate global marketing. (can be short answer)

Answer 1

Companies and governments conduct international trade — as long as no one puts up trade barriers. Trade barriers generally prevent firms from selling in foreign markets to each other. Natural barriers, tariff barriers and non-tariff barriers are the main obstacles to international trade.

Natural trade barriers can be physical or social. For example, while raising beef in Argentina's relative warmth may cost less than raising beef in Siberia's bitter cold, the cost of shipping beef from South America to Siberia may drive the price too high. Therefore, distance is one of the natural barriers to international trade. Language is another natural barrier to trade. Persons who can not effectively communicate may not be able to negotiate trade agreements or may be able to ship the wrong goods.

A tariff is a tax on imported goods levied by a country. It can be a charge per unit, such as a barrel of oil or a new car; it can be a percentage of the value of the goods, such as 5 percent of a shoe shipment of $500,000; or it can be a combination. Every tariff makes imported goods more expensive, no matter how it is assessed, so they are less able to compete with domestic products. Protective tariffs make purchasers less attractive to imported products than to domestic products. For example, the United States has protective tariffs on imported poultry, textiles, sugar and certain steel and clothing types

In addition to tariffs, governments also use other tools to restrict trade. One form of nontariff barrier is the import quota, or restrictions on the amount that can be imported for a certain product. The objective of setting quotas is to limit imports to a given product's specific quantity. The U.S. protects with quotas its shrinking textile industry.

Government rules that give domestic producers and retailers special privileges are referred to as buy-national regulations. One such U.S. regulation prohibits the use of foreign steel in U.S. highways construction. Many governments of the state have buy-national supply and service rules. In a more subtle move, a country may make it difficult for foreign products to enter its markets by setting customs regulations that differ from generally accepted international standards, such as requiring quarter-size bottles rather than liter-size bottles. An embargo is a complete ban on importing or exporting a product. Often for defense purposes, embargoes are established. For example, the United States does not allow exports to countries that are not allies of various high-tech products, such as supercomputers and lasers. While this embargo costs billions of dollars in lost sales to U.S. companies every year, it prevents rivals from using the latest technology for their military hardware.

Exchange controls are laws that require a foreign currency (foreign currency) export earning company to sell the foreign currency to a control agency, usually a central bank. Assume, for example, that Rolex, a Swiss firm, sells 300 watches for US$ 600,000 to Zales Jewelers, a U.S. chain. If Switzerland had exchange controls, the Swiss central bank would have to sell its U.S. dollars and receive Swiss francs. If Rolex wants to buy goods from abroad (supplies to make watches), it has to go to the central bank and buy foreign currency. While controlling the amount of foreign exchange that has been allocated to firms, the government controls the amount of items that can be imported.