International Trade and Enterprise
2International Trade and Enterprise
INTERNATIONAL TRADE AND ENTERPRISE
International Trade and Enterprise
The importance of international trade cannot be underestimated given its ability to create and sustain better growth as evidenced by recent studies in economics (Lewis 2015). Trade policies of a country therefore largely determine the success or failure of the economy of that particular country. The need for a detailed understanding of trade policy has become more imperative in the present time due to the dynamic global changes affecting trade and most importantly globalization. Improvement in productivity thus largely depends on an open trade and investment strategy which encourages integration with the global environment (Lewis, 2015).
Despite the fact that trade reforms have the positive intention of engineering growth and alleviating poverty, the adoption of liberal trade policies are bound to affect the running of domestic institutions in a particular country (Mingst, 2013). The after effects include creating a less than stable macroeconomic environment which weakens the reforms. Stakeholders of trade policies therefore have to adequately comprehend governance of trading bodies and the continuous changes taking place in the trade environment in order to sufficiently form and execute proper trade policies. Trade policies are in addition largely affected by politics of different nations and thus the need for a singular institution that helps to govern trade (McGovern, 2016). The World Trade Organization (WTO) previously referred to as General Agreements on Tariffs and Trade (GATT), focuses its goal on the liberalization of trade thus fostering growth and economic development.
Many countries, both developing and developed have benefited from international trade. China for instance has gone through swift development and spectacular economic growth through international trade thus making the country aim towards the world as its market. China enjoys a steady political structure, abundant natural assets and expert labor which makes it a global center for production. China’s case gives evidence that international trade policies coupled with a stable national institution are an avenue for promoting economic growth and productivity (Johnson, 2013).
The benefit of international trade cannot be disputed. However, most developing countries bear the brunt of foreign trade such as India where they have had their cottage industries destroyed (Running, 2015). There might be an established partnership with other countries but the individual citizens are left to suffer thus the overall objective to improve the country is not achieved. Exhaustion of natural resources and a continuous degradation of the living standards of nationals have been among the major effects of international trade in developing countries.
for their commitment to apartheid. developed countriesMoving from a highly cocooned and inward looking economy, South Africa’s trade and industrial policy has approached an internationally strategy which capitalizes on its advantages, both competitive and comparative. For several years, South Africa as a country lacked the ability to trade with other nations and was severely limited by the sanctions placed on the country. This was given as a punishment by most
In summary, the move towards international trade and the policies placed forth have been among the major factors contributing to economic growth most especially among developing countries. These policies should however be planned, analyzed and tested to ensure that their execution has a larger percentage of benefits than drawbacks.
Johnson, H.G., 2013. International Trade and Economic Growth (Collected Works of Harry
Johnson): Studies in Pure Theory. Routledge.
Lewis, W.A., 2015. The evolution of the international economic order. Princeton University
McGovern, E., 2016. International trade regulation (Vol. 2). Globefield Press.
Mingst, K.A. and Arreguín-Toft, I.M., 2013. Essentials of International Relations: Sixth
International Student Edition. WW Norton & Company.
Running, K., 2015. The Economic and Social Impacts to India and Its Citizens from Inward
Foreign Direct Investment (Doctoral dissertation, University of Sheffield).