International Trade and Trade Restrictions

International great deal and Trade Restrictions International Trade and Trade Restrictions International flip increases the number of goods that domesticated consumers good deal choose from, decreases the cost of those goods through increased contender, and allows domestic industries to ship their products abroad. While all of these seem beneficial, free throw is not widely accepted as completely beneficial to all parties and trade restrictions be applied.Trade restrictions can be in the form of tariffs, which are taxes on imports quotas, which are limits on the quantity of a particular good that can be trade or exported or other trade restrictions. International trade efficiencies, trade restrictions, and the consequences of these restrictions will be discussed raise.World trade offers many advantages to the trading countries access to markets around the world, lower cost through economies of scale, the opportunity to utilize long resources, better access to information a bout markets and technology, improved quality honed by competitive pressure, and lower prices for consumers (McEachern, 2012, p. 733). comparative degree advantage, specialization, and trade allow people to use their scarce resources most efficiently to satisfy their unlimited wants.Comparative reward is the susceptibility to make something at a lower opportunity cost than other producers face (McEachern, 2012, p. 32). The ability to make a good at a lower opportunity cost gives that individual, firm, region, or expanse a comparative advantage. Even if a country has absolute advantage in all goods, they should define in producing the goods in which it has a comparative advantage. If each country specializes and trades according to the law of comparative advantage, e genuinelyone would hit from greater consumption possibilities.McEachern provides three reasons for external specialization countries having different resource endowments, greater economies of scale can be achieved w hen firms participate in international trade, and tastes differ from country to country (McEachern, 2013, p. 719-720). Every country has a comparative advantage in the production of some products. This means that the labor and capital resources available in the reason are more productive when focused towards a particular industry and thus are able to be produce that product better as a result.In the case of the textile industry, Pakistan enjoys a comparative advantage as it has many cotton fields, providing it direct access to the raw material for the industry. It further has been operating in that industry for a long time that has spawned a lot of trained manpower relating to that industry in the country. Therefore, law of comparative advantage dictates that it should produce textile materials. The World Trade shaping (WTO) is the only global international organization dealing with the rules of trade between nations (WTO, 2012).Their goal is to help producers of goods and service s, exporters, and importers demeanor their business. The WTO and agreements such as NAFTA open up free trade, allowing goods to move freely and thereby aiding consumers in mingled countries in terms of prices and quality. It also spawns healthy competition in the local industries. Trade restrictions can fly the coop to a breakdown in competition and can lead to adverse effects in the local and international market. Restrictions can benefit certain domestic producers that lobby their government for benefits.Congress tends to support the group that fights back, so trade restrictions often persist, despite the clear and widespread gains from freer trade. For example, U. S. growers of sugar cane have been protected from imports, which results in an increase in U. S. sugar prices. Higher prices hurt domestic consumers, but they are usually unaware. As McEachern states, Consumers remain largely oblivious. Who is responsible for trade ethics? Government might be the initial consequen ce but all constituents involved should be aware and be transparent. An example is Nike, Inc.They provid a statement in understanding how to change the way an industry views its labor force. It does not happy by monitoring factories alone. supervise reveals the issues, issues that in turn are locked into a complex web of home causes. The ability to address these root causes should be shared by many, owned by no single constituent (Nike, Inc. , 2013, p. 1). One of their strategies is to translate working relationships with their contracted factories to incentivize change that will benefit workers. Are trade restrictions effective? Trade security measure can foster inefficiencies.The immediate cost of such restrictions includes not only the welfare loss from higher(prenominal) domestic prices but also the cost of resources used by domestic producer groups to secure the prefer protection (McEachern, 2012, p. 732). These costs whitethorn become permanent if the industry never reali zes the economies of scale and never becomes competitive. defend one stage of production usually requires protecting downstream stages of production as well. The biggest problem with appalling trade restrictions are that other countries usually retaliate which shrinks the gains from trade.Some experts believe the costs of protecting the jobs of workers in under fire(predicate) industries, which are ultimately borne by taxpayers or consumers, far exceed the potential cost of retraining and finding new jobs for those workers (Globalization one hundred one, 202, para. 1). In addition, that it may not promote firms and industries to make necessary changes to challenge foreign competition and find efficiencies to which then would make them become even more dependent on government protection. As international trade has increased, conflicts over trade have also increased.Trade restrictions may continue to be very political in nature. The more companies like Nike and consumers start be ing more aware of ethical deportment around international trade, the more everyone will benefit. The U. S. government does take responsibility for workers who lose their jobs by international trade and have programs established to assist in training and support to re-employ those workers. As countries specialize and trade according to the law of comparative advantage, consumers should also benefit from efficient production and cheaper prices.The increase of technology may have an impact that will increase the speed at which international trade and efficiencies happen. References McEachern, W. A. (2012). Economics, 9e (9th ed). Mason, OH South-Western. Globalization 101 (2013). The Levin Insitute. Consequences of trade restrictions. thttp//www. globalization101. org/consequences-of-trade-restrictions/ Nike, Inc. (2013). Responsibility. Targets and performance. http//www. nikeresponsibility. com/report/content/chapter/targets-and-performanceLabor World Trade Organization (2013). http //www. wto. org/english/thewto_e/whatis_e/whatis_e. htm