International Business for Political Economy in Trade & Investment

Question: Discuss about theInternational Businessfor Political Economy in Trade Investment. Answer: The 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 services upon human interaction (Hill, Cronk Wickramasekera, 2010). Globalization is seen to extend at a high rate and it is significant in Australias 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 and facilitate 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 should impose trade barriers. The political reasons such as the anti-global groups require trade barriers to protect the multinational businesses. In addition, trade barriers are put to avoid imports from the low wage countries which create a downward pressure on the nations. Governments adopt strategies such as bilateral, multilateral, and regional which helps in overcoming international trade. The multilateral mechanism is featured mostly among the nations which exchange tariffs preferences as it is non-discriminatory (Aggarwal Urata, 2013). The bilateral mechanism involves free agreements of trade where nations swap trade concessions. It helps to overcome trade barriers by addressing issues such as insecurity, intellectual property, and investment. Moreover, the regional mechanism provides the government with an opportunity to advance on liberalization and free trade. The World Trade Organization (WTO) facilitates trade through various ways. For instance, the organization aims to ease the border processes. This ease allows easy release as well as clearance of goods. The organization is obliged to assist the nations to engage in negotiations which concern national development. WTO has various implications such as assisting the goods and services producers, importers, and the exporters in running their businesses (O'brien Williams, 2016). This firm is also seen as an organization for opening trade. It creates a platform where organizations can negotiate and agree on trade activities. Also, it helps in settling disputes involving trade and also outlines the trade rules which need to be followed. Reply to a Friends Post In reply to my friends post, there are several economic and political reasons that the Australian government may apply to trade barriers. This step is common to any country as there is need to take care of its citizens on the basis of promoting local entrepreneurs. Australia adopts political regulations which concern trading with other countries. Politically, Australia needs to make a hard decision on controlling the situations in the local market through imposing trade barriers. Therefore, the barriers allow and limit the importation of various goods and services. Products such as the arm related materials, natural gas, steel, and sea products are restricted in Australia. However, there may be sudden changes which may result in competition in Australia. In addition, the Australian government may impose trade barriers to open doors to implement free trade with other countries such as New Zealand. Trade barriers also help in regulating prices of products imported in Australia. Through trade barriers, the Australian government can increase its revenue from the domestic investments. The economic reasons are that through trade barriers, the Australian government can achieve economic goals by protecting against local resources. In regard to the political reasons, trade barriers help the policymakers in maintaining imports at a low guarantee of political independence. Finally, the social reasons indicate that the Australian government can reach its social objectives through trade barriers. For instance, quotas and tariffs help to minimize the public consumption of unhealthy products. Therefore, trade barriers facilitate public awareness of the products for consumption. References Aggarwal, V., Urata, S. (2013). Bilateral trade agreements in the Asia-Pacific: Origins, evolution, and implications. Routledge. Anderson, K. Strutt, A. (2012,). The changing geography of world trade: Projections to 2030, Journal of Asian Economics, 23 (4) Cohn, T. (2015). Global political economy. Routledge. Hill, C.W.L., Cronk, T. Wickramasekera, R. (2010). The Political Economy of Trade Investment. In C.W.L., Hill, T., Cronk R., Wickramasekera (Eds). Global Business Today:? Asia Pacific Edition (2nd Ed.) (pp. 96-145), North Ryde: McGraw Hill. O'brien, R., Williams, M. (2016). Global political economy: Evolution and dynamics. Palgrave Macmillan. Ravenhill, J. (2017). Global political economy. Oxford University Press.