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InternationalBusinessandTrade
InternationalTrade
andTradePolicy
Presentationby:RoseB.Buendia,LPT
Whatarethetwomain
reasonsadvancedby
statestotradewith
eachother?
Economic
Political
Twomainreasonsadvancedby
statestotradewitheachother
Economic
AbsoluteAdvantage
ComparativeAdvantage
Economic
AbsoluteAdvantage
theabilityofanentitytoproduceagreater
quantityofaproductorservicewiththesame
amountofresourcesoveranotherentity
AbsoluteAdvantage
Country A Country B
AbsoluteAdvantage
Country A Country B
AbsoluteAdvantage
Country A Country B
Activity
Group with three members each
Think of two countries and
identify each other’s
absolute advantages and
why?
Economic
ComparativeAdvantage
theabilityto
producegoods
andservicesata
loweropportunity
costintermsof
othergoods
Economic
ComparativeAdvantage
theabilityto
producegoods
andservicesata
loweropportunity
costintermsof
othergoods
the potential forgone profit
from a missed opportunity—
the result of choosing one
alternative over another
ComparativeAdvantage
Opportunity
cost
ComparativeAdvantage
Opportunity
cost
can specialize
ComparativeAdvantage
Opportunity
cost
ComparativeAdvantage
Opportunity
cost
can specialize
Economic
AccesstoaGreaterVarietyofGoods
JobCreation
UtilizationofAbundantResources
Countrieswhichtradewith
eachotherarelesslikelyto
declarewaragainsteach
other.
Political
Political
EnhancedReputationandCredibility
BetterRelationsBetweenCountries
-tonavigatetradeagreements
-broaderpoliticaladvantagesand
alliances
Why Do States Restrict
International Trade?
WhyDoStatesRestrict
InternationalTrade?
National
security&
Self-
sufficiency
Infant
Industry
Beggar-
Thy-
Neighbor
WhyDoStatesRestrict
InternationalTrade?
acountrymaylimit
importsofcritical
materials,suchasoil,
toensureastable
domesticsupplyin
timesofconflictor
geopoliticalinstability
imposetariffsand
traderestrictionsto
shelteritsemerging
industries
reducingimportsand
increasingexports
S.Korea:electronics
andautomotive
sectors
aimsataddressing
one'sowndomestic
problemsatthe
expenseofothers
Whatis
InternationalTrade
Law?
InternationalTradeLaw
setoflawsandagreementsthat
governcommercebetween
countries
createstherulesthatcountries
andbusinessesmustfollowin
ordertoconductbusinessacross
borders
TariffsandCustomsRegulations
ImportanceInternationalTradeLaw:
DisputeResolution
ensure that trade conflicts are addressed through
established legal processes, promoting stability and
predictability in international commerce.
governs the imposition of tariffs, quotas, and other
trade barriers by countries
ImportanceInternationalTradeLaw:
TradeAgreementsandTreaties
TaxationandCompliance
encompasses the negotiation, drafting, and
implementation of trade agreements and treaties
between countries
helps ensure that businesses stay tax compliant and
avoid or lessen double taxation
Thankyou!
References:
BusinessSchool101.(2021,May26).AbsoluteAdvantageandComparativeAdvantage(withexamples)|International
Business[Video].YouTube.https://www.youtube.com/watch?v=RswNYuf5Rng
Chand,S.(2013,December11).8BenefitsofInternationaltrade|Exportmanagement.YourArticleLibrary.
https://www.yourarticlelibrary.com/trade-2/8-benefits-of-international-trade-export-management/5914
Staff,U.C.(2023,December11).Thebenefitsofinternationaltrade.U.S.ChamberofCommerce.
https://www.uschamber.com/international/trade-agreements/the-benefits-of-international-trade
InternationalBusinessandTrade byMattMartin,PH.D,publishedbyUnlimitedBooksLibraryServices&PublishingInc.2021

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International Trade and Trade Policy.pdf