Globalization and International Trade Essay

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International Business is a term used to collectively describe topics relating to the operations of firms with interests in several countries. International trade occurs because no single country has the resources to produce everything well. Nations specialize in the production of certain goods and trade with other nations for those they do not produce. More and more companies are recognizing that pursuing opportunities in the global marketplace is the key to their present and future success. There are many advantages of going global such as, new markets, new sources of capital abroad, swifter technological advancement, and more choices for consumers, just to name a few. One of the results on the increasing success of international …show more content…
International Trade Organization
International trade theories play a major role in globalization. Free trade is an example of the international trade theory. Free trade is “where a government does not attempt to influence through quotas or duties what its citizens can buy from another country or what they can produce and sell to another country” (www.investorworld.com). The barriers to international trade and foreign direct investment occurred in the early 1900.
Sometimes countries engage in trade practices that are deemed unfair by the host country. To prevent trade disputes from escalating into full-blown trade wars, and to ensure that international business is conducted in a fair and orderly fashion, the countries of the world have created a number of agreements. According to investorworld.com, the major trade agreements include The General Agreement on Tariffs and Trade (GATT), The World Trade Organization (WTO), The Asia Pacific Economic Cooperation Council (APEC), and several regional trading blocs.
The GATT is a worldwide trade pact that was first established in the aftermath of World War II. Nondiscrimination has been the guiding principle. Any trade advantage an GATT member gives to one country must be given to all GATT members, and no GATT nation can be singled out for punishment. GATT successfully reduced tariff barriers on manufactured goods. The WTO is a permanent negotiating forum for
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