Evaluating the Global Context

In this seminar, “Evaluating the Global Context”, we are looking at the different trades to define the different activities. There are different activities of buying and selling that exchange of products between the people. Different organizations perform these factors. Most importantly we will discuss the policy of trade protectionism.

Trade protectionism is one of the important elements that help to increase the progress of the business. There is a lot of understanding that has a better understanding of trade protectionism. The history of trade protectionism helps to understand the key concept that improves the entire process and the performance. The word free trade is also known as the laser fair.

This concept of free trade is the policy that helps to gain success. Some different taxes and duties are imports to gain success. The taxes, duties, and imports are the key concepts that help to raise awareness and gain success from time to time. It helps to buy as well as sell the key components and products. Trade protectionism and free trade are opposite terms from each other.

To gain success and improve the overall progress of the business, trading policies are important. In this report, we clearly define the difference between trade protectionism as well as free trade. Due to the impact of COVID-19, the trade protectionism actions also fluctuate. In this modern and technological world, there are a lot of factors that help to raise trade protectionism. To improve the current resources and generate higher success, the government of countries puts different resources on the internal framework.

Read more: Global Strategy and Implementation of Nestlé.

Techniques of protectionism:

There are different techniques of protectionism that help to protect trade and boost the economy of the country. Tariffs, quotas, subsidies, and product standardization are the main components to protect the trade. Tariff is the tax left on those goods that are imported to enhance the prices that shows the higher domestic product. Unit-based tariffs and the Volarem tariffs are the main components that help to raise awareness and generate higher success as the trading items.

The import quotas are the restrictions placed on the different products that have unique characteristics. The subsidies help that given by the government of the country that reduce the cost of production. In this phenomenon, the local products are more competitive as compared to the foreign products. In product standardization, strict products standards can be used as a protective measure to keep the big exporter. By setting the high standards of products that are disgusting for the protectionism.

The great depression 1929:

The US stock market collapse in the year 1929. It was one of the strongest shocks faced by the international market. The level of tariffs increased in the world from 1928 to 1933. It enhances temporarily as compared to a permanent basis.

General agreements on the tariffs and trade:

In 1947, there are different general agreements of tariff and trade development that helps to enhance the progress of the economic situation. It is signed in Geneva in October 1947 after the second world war to make the easier steps for international tariffs. There are more than 20 countries involved in the general agreements of tariffs and trades.

World trade organization:

In 1995, the world trade organization also contributed its services and efforts to improve the key signs of progress of trade and tariffs.

It is marked as the biggest reform of international trade at the end of the second world war. The world trade organization represents 98% of the international trade in the whole world.

The implementation of US and China based on the trade relations:

The economic situation of China becomes increases from time to time. In the following years, the rapid growth of China is due to the efforts and contributions of the world trade organization. In the market-oriented economy, there is a planned economy set.

China spread the influence of global trade by defining different key terms. The government of China creates different policies as well as the regulations that imposed the tariffs in the year 2018. The government of the United States also contributed different actions as well as activities to sustain the current resources.

The foreign investment risk review becomes managed by the key authorities and the key actions of the government of the United States. The inbound investment of Chinese into the United States has been sustained since the two years till the firm was passed.

The European Union: Evaluating the Global Context

The European Union also plays a vital role that clearly understanding the meaning of trades and tariffs. It ends the conflicts between the neighborhood countries by developing a strong bridge of policies as well as the trades. Three different aspects help to analyze the impact of the European Union on the development of strong relationships between the China and United States.

In these three pillars, the economic, social, and security include. It helps to change the entire structure as well as the key signs of progress of the business. There are twenty-seven countries are act as the union in this form. European union develop different policies in which there is a strong relationship develop between all the operations of the businesses as well as the countries that are located under this term.

To raise awareness and gain success the government of countries also develop different trade policies. In this modern world, when all of us are familiar with the use of advanced technology then the trade policies can be easily managed through the decisions of government. The main purpose of developing the European Union is to develop the ending conflict strategies among all the people that are associated with the government’s actions.

Trade policies:

The trade policies are open, sustainable, and assertive that have different natures. In the open trade policies, the encouragement as the free trade agreement or FTA is developed with Mexico, Australia, New Zealand, and Chile. All of these countries are associated with EU through the open policies.

The encouragement of small and medium enterprises to access the information through the different websites and push the reformation of world trade organizations are also the key components of open trade policy.

In the sustainable trade policy, the change of climate as the green deals and Paris agreement, the protection of biodiversity through promoting the sustainable food chain management exists. It establishes the mechanism to monitor as well as add the mechanism. The sustainable supply chain becomes more sustainable in this type of trade policy.

On the other hand, the assertive European Union policy monitor whether the partner countries have completed the trade agreements. The environment, market opening, and labor are key activities that include in this process. By the amendment of different laws that are associated with the trade regulations are appear in this form.

The protectionism of the European Union:

Two different elements play a vital role to increase the progress as well as the performance of the European Union through those countries that are directly associated. In these factors, the environment and technology both play a vital role.

Technology develops future success and the environmental factors help to understand the conditions of countries that are directly associated with each other. With the help of technology, the European Union can develop more policies of trading. So, the key trends and success rate become increase by focusing on both technologies as well as environmental factors.

Brexit’s relationship:

Brexit changes its relationship with the European Union due to different elements. Trade, security, and migration are the key elements that divert the intention of Britain to leave the European Union and change the relationship through migration, trade, and security.

The trade policy of Brexit:

By exporting the declarations as well as the new requirements that trade policies of Brexit become established. In the section of import, there is a full custom is check from January 2022. Imports and exports of the products based on the free tariff are some rules of origin. The intellectual property for the businesses of the UK has been changed.

From NAFTA to USMCA:

NAFTA eliminate as well as reduced the tariffs on imports as well as export between the different participating countries. It remains the zero tariff on the United States feed grains, ethanol, and co-products. It provides a higher standard of free trade of agreement. The trade policies generate a rapid response to address the trade challenges as well as include biotechnology to modernize the key procedure.

Porter’s determinant of National competitive advantage:

USMCA develops different strategies to gain a competitive advantage in the European Union. Different determinates help to gain a competitive advantage at the national level.

• The firm’s strategies, structure, and rivalry.
• The demand conditions.
• The related as well as supported industries.
• The factor conditions.
• All of these are the main determinants of Porter’s strategies.

Average global index:

Due to the average global index, there are a lot of entities that play a vital role to analyze the market of USMCA, EU, and the ASEAN. In these entities, the institutions, infrastructures, ICT adoption, macroeconomic stability, health, skills, product market, labor market, financial systems, size of the market, the dynamism of business, and the capabilities of innovation exist.

The Global effect of COVID-19 on trade protectionism:

Due to the first reported cases of COVID-19, that appear in December 2019 in China. It affects human life as well as the global economic conditions from time to time. With approximately 70 percent of the world’s population trapped insider the homes, different trading activities are less apparent. World trade activities become decrease from time to time due to their operations and ethics.

Coronavirus harmed the trade of the world. The government of all the countries has different policies to protect the economies of the country to damage the pandemic. Through some of these actions, there are various harmful results appear. All the countries have started to put restrictions on trade operations.

The global effect of COVID-19 on the trade:

The activities of trade were decease from March 2020 to July 2020. This form is stabilizing after the lockdown was imposed as shown in the graph. Most countries have dropped the entire success due to the higher rate of COVId-19.

The effect of COVID-19 on India and Pakistan:

Pakistan is a highly populated country across all over the world. COVID-19 has effect Pakistan very badly. According to the estimate, Pakistan faces a 10 percent economic loss. So, the country bears a huge economic layoff, and the price of daily items also increases to balance this loss.

In the year 2020, the annual growth rate of Pakistan was -5. In the year 2019, the annual growth rate of Pakistan was 0.9. The total import of Pakistan in March 2020 was 525 rupees. The total export of Pakistan in the year 2020 amounted to PKR 287.70. It indicates the downturn trend of 12.9 percent from the previous month.

Impact on India and its trade:

India also suffered a great pandemic. The trading activities came to a halt and the gross domestic product appeared in negative terms. After the pandemic of COVID-19, the trade of India also decrease which directly impact its economic condition. In January, the exports of India were 18.985 which decrease in July to about 17,031 billion dollars. India had the highest rate of gross domestic product.

COVID-19 and protectionism:

All of us know that the COVID-19 has spread across the globe and measures protectionism. Government in the different continents develop different strategies to protect the health of the people. While some actions, as well as the activities, are reasonable and legitimate. Related to protectionism, the Covid-19 measures different economic nationalism.

Before COVID-19 pandemic, a tendency towards protectionism:

All the parties in the advanced economies have become more nationalist with the respect to immigrants and the global financial crises. In the emerging market economies, these parties have become more nationalist in their industrial policies. Before the onset of the COVID-19 pandemic, the authors feared the widespread economic nationalism that would pose a significant obstacle to policies.

Restrictions on medical equipment:

Due to the pandemic of COVID-19, there is a strong restriction is placed on medical equipment. The world trade organization plays a vital role to protect the health of people. There are most common export licensing requirements put on medical ventilators. Some nations postponed the import taxes and the anti-dumping.

Vaccine nationalism:

A few countries in which the including France, India, and the United Kingdom restricted the exports of certain medicines. The world trade organization only registered the Eurasian economic Union of the food export terms. All of these countries are restricted to export the products in the threatening situation of COVID-19.

Pros and cons of protectionism:

Here are some pros of protectionism.

• Local job creation.
• The development of local competitive advantage.
• The protection of local firms from foreign competitors.

Here are some cons of trade protectionism.

• Less price pressure.
• International investors.
• Having a limited choice for consumers.

All of these are the pros and cons of protectionisms that analyze the impact of trading policies on the economic growth of the country. The developed as well as the developing countries can increase the economical situation by effecting the key resources and increase the different resources. Less pressure of price and the international investors are some cons that decrease the economy of the country.