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Economic Analysis: The International Trade Market International Essay

Economic Analysis: The International Trade Market International trade plays an historically large role in the growth and prosperity of countries around the globe. Similar to the benefits that open trade within a country brings to that country's respective economy, trade on the international front improves the global market economy significantly. Trade generates competition, promotes the transfer and utilization of new technology and allows countries, customers, and businesses alike to access to the world's best products. Trade in the international market brings about the capacity for innovation, high productivity and rising incomes and economic standings for each country that chooses to engage in it. However, certain strategies, regulations and methods must be employed within the international market to ensure success and smooth operations in each respective country that becomes involved in world trade.

Governmental Role in International Trade

The government plays a very specific role in the field of international trade and can be found in different levels of economic integration within the markets which impacts the international market in a very viable way. In beginning international trade, a foreign country with an appropriate demand profile is identified, institutional barriers, trade barriers, administrative regulations, commercial law enforcement standards are identified and adhered to by the government and trade is able to commence between nations (Winter-Nelson, 2007, p. 60).

Despite the notion that economically speaking, government should play no role in the market, the fact remains that these countries do play a large role in the market, especially on the regulatory level. Countries' governments oversee the operations of international trade through the passage of laws that deal with the internal structure of trade operations within its country such as setting trade regulations, assessing unfair trade laws pertaining to international trade specifically and the like; the government also has the capacity to deal with international dispute settlement procedures within its own country's court system (Lowenfield, 2001, p. 410). In dealing with the legal and structural...

Because the world on international marketing is comprised of countries with significantly different cultural, economic and social backgrounds, the inner-workings of the market are extremely complicated. This complexity is further deepened by the fact that all countries, whether they like it or not, are economically related to each other in one way or another (Rauch and Trinadade, 2009, p. 810). For example, an increase in the price of oil in one Middle Eastern country will directly affect the trade relationships that countries seeking this oil have with the Middle Eastern country. The increase in price creates an extensive and complicated chain of events that will no doubt effect each country that deals with the holding country within the international market. Such instances also cause strains on the social relationships between countries who may view such happenings from different cultural standpoints. In understanding this facet of international trade, one can better understand the implementation of internationally-recognized free trade agreements that allow countries with differing cultures and economic systems to interact with one another on a larger scale in hopes of benefiting each area involved. Such famous agreements include the North American Free Trade Agreement (NAFTA) between culturally and economically-diverse Canada, the United States and Mexico and the South Asian Free Trade Agreement (SAFTA) between Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka, both of…

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References

Dutta, N. (2010). Foreign investment, financial development and political risks. The Journal of Developing Areas, 44.2: pp: 303-327. Retrieved from: ProQuest Database.

Lowenfield, A. (2001). The role of government in international trade: essays over three decades. The American Journal of International Law, 95.2: pp: 400-502. Retrieved from: ProQuest Database.

Rauch, J. And Trindade, V. (2009). Neckties in the tropics: a model of international trade and cultural diversity. Canadian Journal of Economics, 42.3: pp. 809-843. Retrieved from: ProQuest Database.

Winter-Nelson, A. (2007). Roles for government in international trade. Journal of Regional Analysis and Policy, 37.1: pp. 60-61. Retrieved from: ProQuest Database.
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