Globalization: Trade Barrier
According to economists the increase of trade barriers within the countries are a reason for the detrimental and decrease of the entire economy. This is clearly explained by the theory of comparative advantage. Free trade includes the removal of trade barriers except for some sectors that may comprise of the health and national security factors (Lumenlearning.com, 2019). An increase in trade barriers shall also affect the farmers adversely within the developed and developing nations. The trade barriers hurt the farmers by rendering various kind of food import and export taxes and also lead to over-production and wasteful dumping within the international markets. It also gives rise to the scenario where the prices of raw commodities and often produce higher rates for goods or products that are usually labor-intensive. The index of Commitment to Development is used to measure the effect of the trade policies in rich countries over the developing countries. It also puts s limit on the choice of products for the consumers. It makes the customers pay higher prices and accept a product that is not of superior quality. People in developing countries do not have a high source of income and therefore availing of such high-cost products on regular basis is nearly impossible for the developing nations (Karunanidhi, 2011). The capital markets are involved with the actions of investing money and supporting various enterprises. Most of the people argue that capital flows mainly to support the benefits of the capital owners than any other stakeholder group in the market. The disparity of income level between the poor and the rich has been increasing and this also resulted in the growth of industrialized nations at the expense of nations that are under-capitalized. This is one of the main and important challenges of the trade barrier.
The revolution of technology and innovation has also largely affected the entire world. With the extension in trade barriers, the cost of research and innovation has also increased within the various developed as well as developing countries. The capitalist countries are able to invest more in their innovation and research sector whereas the under developing and developing nations lag behind in terms of implementing similar innovation attempts within their territory (Egan & Guimarães, 2016). The various defense and trade agreements between the countries give rise to several defense treaties and barriers that bind the developing nations to enforce their innovation and research approaches without mutual consent with other neighboring countries. For example, the UN treaty of nuclear weapon suggests that any nation willing to perform missile tests need to be conducted under specific jurisdiction and guidance of the permanent members of the UN. Other than that the defense treaties also sometimes lead to an excessive increase in the trade barriers over other developed nations which results in economic and political clashes within the two nations. Thus it can be said that the increasing policy of trade barriers does not seem to hinder the developed and non-developed nations in equal measures.
Egan, M., & Guimarães, M. (2016). The Single Market: Trade Barriers and Trade Remedies. JCMS: Journal Of Common Market Studies, 55(2), 294-311. https://doi.org/10.1111/jcms.12461
Karunanidhi, R. (2011). Developing Africa: Trade barriers, liberalization and inequality in the World Trade Organisation. African Journal Of Business Management, 5(22), 8686-8696. https://doi.org/10.5897/ajbm10.1314
Lumenlearning.com. (2019). International Trade Barriers | Boundless Management. Courses.lumenlearning.com. Retrieved 20 October 2020, from https://courses.lumenlearning.com/boundless-management/chapter/international-trade-barriers/.
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