Outline and critically discuss three of the following topics in relation to trade and globalisation? a. Tariffs b. Subsidies c. Import quotas d. Voluntary export restraints e. Local content requirements

Trade and Globalisation

Trade and globalisation are two of the most important economic concepts of the modern age. Trade is the exchange of goods, services, and capital between two or more countries. Globalisation is the process of economic integration between different countries and regions, enabling the movement of goods, services, capital, and people around the world. Trade and globalisation can be seen as two sides of the same coin, as they are both necessary for the efficient and effective functioning of the global economy.

Tariffs

A tariff is a tax imposed on imports or exports between countries. Tariffs are used by governments to protect their domestic industries and to raise revenue. Tariffs reduce the competitiveness of foreign goods and services, making them more expensive than domestic products. They can also be used to discourage imports and encourage exports, as tariffs on imports make them more expensive and tariffs on exports make them cheaper. Tariffs can also be used to retaliate against other countries if they are perceived to be engaging in unfair trade practices.

Subsidies

Subsidies are payments or other forms of support given by governments to domestic industries to encourage production or make their products more competitive. Subsidies are used to make domestic industries more competitive, to support specific industries, or to protect them from foreign competition. They can also be used to encourage exports, as subsidies make domestic products cheaper than foreign competitors. Subsidies can have a significant impact on the global economy, as they can distort competition and lead to a decrease in a country’s trade balance.

Import Quotas

Import quotas are limits placed on the amount of a particular product or service that can be imported into a country. Import quotas are used to protect domestic industries from foreign competition, to reduce the risk of oversupply of certain products, or to protect certain industries from foreign competition. Import quotas can also be used to protect certain industries from foreign competition, as they limit the amount of imported goods and services that can be sold in the domestic market.

Voluntary Export Restraints

Voluntary export restraints (VERs) are agreements between two countries to limit the amount of a particular product or service that can be exported to the other country. VERs are used to protect domestic industries from foreign competition, to ensure a fair balance of trade between two countries, or to limit the amount of imported goods and services that can be sold in the domestic market. VERs can also be used to protect certain industries from foreign competition, as they limit the amount of imported goods and services that can be sold in the domestic market.

Local Content Requirements

Local content requirements are rules that require a certain percentage of the goods and services produced in a country to be made with local materials, labour, or technology. Local content requirements are used to protect domestic industries from foreign competition, to promote economic development, or to create jobs in the domestic economy. They can also be used to protect certain industries from foreign competition, as they limit the amount of imported goods and services that can be sold in the domestic market.