International Business Trade Policies and Relatoinship

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sTART
October 13
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2. INTRNATIONAL TRADE
POLICIES AND RELATIONS
October 13
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Presented
By:- Mr. Muiz Ghole.
Miss. Nikita
Humbre.
Mr. Rizvan
Mahadik and
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3. 1.TARIFFS
Tariffs refers to the tax imposed on imports
TYPES
1. Specific tariffs and
2. Valorem tariffs
The purpose of tariffs is to protect the
domestic industry by increasing the cost of imported
goods.
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4. Trade Policies aim to protecting the
domestic industry from the competition
of advanced countries through
imposing quotas.
Trade policies announced by government
Tariffs
Subsidies
Import quotas
Voluntary Export Restraints
Local Content Requirements and
 Administrative policies.
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5. The following parties Gain from the Tariffs:Government of the tariffs importing country:-
Industry of the importing country:Jobs in the domestic country are saved.
Business for the ancillary industry, servicing, market
intermediation etc. is also protected.
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6. The following parties are adversely affected by
the tariffs
Consumers of the domestic country lose as they have to pay a
higher price.
The industry of the exporting country losses the demand for
its product, sales and profits.
Example:
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7. 2.Subsidies
In order to encourage domestic production or to
protect the domestic producer from the foreign
competitors, government pays to a domestic producer
by reducing operations cost. Such payments are
called subsidies.
Subsidies help the domestic producers in the
following way’s:Low cost producer and have all the advantages of a
low cost producer
Enter the foreign markets.
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8. In 2012-13, subsidies are expected to be Rs2.16 trillion or 2.5
percent of GDP and government has set a target of bringing
them to 1.75 percent of the GDP in the next three years.
The fuel subsidies comprise of 3 major components.
 The subsidy on Kerosene for the lower income group
distributed through the public distribution system (PDS), the
subsidy on domestic LPG and the subsidy on diesel.
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9. Subsidies in developing countries
The Indian government has already started
withdrawing the subsidies on fertilizers, pesticides,
prices of agriculture output, output of small scale
industries etc.
Basically it reduce losses and provide insurance
against crop failure, market fluctuations, shifts in
customer tastes and technology changes.
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10. The government of not only developing countries but also
advanced countries provides subsidies.
Subsidies in advanced countries.
oIndustrialized country provided subsidy.
oSubsidies are only in the form of cash grant.
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11. Advantages of Subsidies
It helps the firms to have large scale economies and
advantages of low cost production
Firms can enter the foreign markets before the
firms of other countries and can this also have the
advantage of the first mover
The advantages of employment and tax gains to the
domestic country
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12. IMPORT QUOTA
Import quotas is a direct restriction on the quantity of
goods which are imported into a country.
•EXAMPLES:-
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13. The largest Indian partners with their total trade (sum of imports and
exports) in millions of US Dollars for calendar year 2012–2013 are as
follows:
Country
Exports
Imports
Total Trade
Trade Balance
United States
36,152.30
24,343.73
60,496.03
11,808.57
United Arab Emirates
36,265.15
38,436.47
74,701.61
-2171.32
Switzerland
1,116.98
29,915.78
31,032.76
-28,798.80
South Korea
4,201.49
13,461.25
17,662.73
-9,259.76
Singapore
13,608.65
7,754.38
21,363.03
5,854.27
Saudi Arabia
9783.81
34,130.50
43,914.31
-24,346.69
Kuwait
1,060.80
16,569.63
17,630.43
-15,508.83
Japan
6,099.06
12,514.07
18,613.14
-6,415.01
Iraq
1,278.13
20,155.94
21,434.07
-18,877.81
Iran
3,351.07
11,603.79
14,954.86
-8,252.72
Indonesia
5,331.47
14,774.27
20,105.75
-9,442.80
Hong Kong
12,278.31
8,078.58
20,356.89
4,199.74
Germany
7,244.63
14,373.91
21,618.54
-7129.28
China
13,503.00
54,324.04
67,827.04
-40,821.04
Belgium
5,506.63
10,087.16
15,593.80
-4,580.53
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14. Voluntary export restraints
Voluntary export restraint is a quota on export of
the domestic firm imposed by the exporting country.
Import quotas and Voluntary export restraints help
domestic firms by providing protection from the
foreign competitors.
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15. International Trade Relations
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October 13
A) International economic relation
Tariffs Policy
International Cartels
International Commodity Agreement
Dumping
Pre- Emptive Buying
Quotas & Licenses
State Trading
Embargoes
Boycott
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16. INTERNATIONAL LAW AND BUSINESS FIRMS
Law applicable to relation bet states, but in modern
times, individuals are becoming more and more
subject to international law such that the law of
nation is applicable to individuals in their relations
with the state and even to certain interrelationship of
individuals.
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17. Material Sources of international law
International customer
Treaties Include law – making treaties and treaty contracts
Decisions of judicial or arbitrary tribunals.
Juristic Work
 Decisions of the organs of international institution
conferences.
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18. International Disputes:Arbitration
Judicial Settlement
Negotiation, good offices, mediation, conciliation or
inquiry
Settlement under the auspices of UNO
Means of forcible or coercive settlement include;
 War and non-war armed action
Restoration
 Reprisals
Pacific Blockade
Intervention
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19. Private International law
Law applicable to private parties or
private corporate bodies is called
private law
Private law is concern with
selecting the law to the parties of
transaction and enforcement of
judgment.
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