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barriers-to-international buisness .pptx
- 1. Barriers to international Buisness Zunaira Akram FA20-BCS-092
- 2. Table of contents Socio-cultural,economic, political. Types of barriers 01 NAFTA,GAT,EUROPEAN UNION etc Reduction in barriers 02 About international trade policy Disagreement 04 Punishment,protection Remaining barriers 03
- 4. The 3 major barriers include : • Socio-cultural barriers language preferences lifestyle • Economic barriers Per capita infrastructure • Political & legal barriers 1-terrif 2- non-tariff 3-Geographical Types of barriers
- 6. NAFTA -1993 -North American Free Trade Agreement -United States ,Mexico, Canada -The trade barrier between them was eliminated .
- 7. GATT -General Agreement on Tariff and Trade -elimination of trade restrictions on specific imported products across 117 countries -WTO (World Trade Organisation) created and now have 140 countries under it -This enabled more easy import of product to other countries
- 8. LATIN AMERICA -June 2003 -United States & Chile -Free trade agreement was signed on more than 90percent of products send between to countries
- 9. European Union -27 states of Europe -also work with WTO -90’s European union agreed to remove the trade barriers -in 2002,most countries adopted euro as a currency, which made it easy to import and export products from one European country to other because of same currency and no risk of currency exchang.e
- 10. European Union -in 2004 they added new members from eastern Europe they have lower wages so they can do trade with western Europe because of no restrictions . Firms from the U.S can establish manufacturing plants in these countries to produce products to export in western Europe.
- 11. Reduced Barriers on direct Foreign investment In recent years, many Asian, European, and Latin American countries have reduced their barriers .Firms now have more freedom to establish subsidiaries or to acquire existing companies there. Some countries allow other firms to open their branches in their countries
- 13. Barriers used to protect Local firm Any government may be tempted to impose barriers to protect its own firms. For example, the U.S. government may impose trade barriers such as tariffs on imported steel, even though such barriers are in conflict with previous trade agreements with other couuntries
- 14. Barriers used to punish countries -Trade barriers are sometimes used to punish countries for various actions. -Trade restriction imposed on countries having no child labor act no lawful war act
- 16. Most of the people agree on this that the trade policy is beneficial because it provide the facility to consumer for best product quality & price wise free trade moves production to countries where it is done efficiently .which causes more employment in the other country . So, the person who gets un- employed because of it will definitely be againt trade policy They may agree that a tariff or quota on imported goods prevents free trade and has unfair advantage in their own market they may disagree on whether governments should be allowed to use other more trade restrictions against foreign firms or provide incentives that give their local firms an advantage Disagreement about international trade Policy
- 17. Some countries use these strategies to satisfy locals industries: 1. Firms don’t have environmental restriction so it can produce at a lower cost than firms in othercountries. 2. Firms don’t follow labor laws and are ableto produce products at a lower cost than firms in other countries by relying mostly on children to produce the products. 3. Firms based in one country are allowed by their government to offer Bribes (rishwat) to large customers when doing business deals in a particular industry. These firms have more advantage over firms in othercountries that are not allowed to offer bribes. 4. Firms in one country receive tax breaks if they are in specific industries. Such breaks are not necessarily subsidies Disagreement about international trade Policy
- 18. THANKS! Do you have any questions?