What Does a Minister of International Trade Need to Know to be Effective at their Job?

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What Does a Minister of International Trade Need to Know to be Effective at their Job?

Resources of Retaliation against WTO guideline violators

International Tools to Restrict International Trade

United Nations

Known for promoting trade and economic activism in third world and developing countries that require trade development for the economic well being of the nation.

WTO

For example, restrictions relating to trade in nuclear materials, narcotic drugs, weapons, and several measures to protect the environment have been implemented by a majority of WTO members. Although not all members have as the WTO does not possess any real authority over these countries' actions.

Domestic Tools to Restrict International Trade

Tariffs

Tariffs increase the price of goods and services purchased from another country, making them less attractive to domestic consumers.

Sanctions

Used as a tool of protection, sanctions are coercive measures applied against a state or individuals that poses a potential threat to international peace and security

Export Subsidies

Can potentially increase domestic good prices as export subsidies are a government policy to encourage export of goods and discourage sale of goods on the domestic market

Export Taxes

Export taxes are implemented and increased with dependance on scarcity and high demand of products which would increase or decrease the export tax percentage

Quotas

A limited amount of a specific product which under official controls can be produced, exported, or imported.

International Trade Considerations

Within intergovernmental trade organizations such as the WTO, countries possess the power to implement sanctions, tariffs, quotas, taxes, subsidies, etc.

Implications can potentially form through violating the principles of international law and trade such as international law compliance, ethical production, etc. resulting in potential international backlash

For example, thousands across the globe refused to buy the extremely reputable brand Canada Goose as they utilize animal fur to manufacture their products. Similarly, many across the globe pursue a parallel mindset on items manufactured through the method of child labour. Ultimately, inducing severely minimal export taxes in hopes of increasing the desirability to international market.

Military power can influence trade as international military monopolists can place sanctions on certain countries to prevent a potential increase in international military power

For example, Russia received a multitude of military sanctions from the international community in desire of assisting and aiding Ukraine from facing the cruel intent of the Russians.

Where does the international community engage in economic trade negotiations?

General Agreement on Tariffs and Trade (GATT)

Preferential Trade Agreements tend to operate significantly more efficiently than multilateral agreements because they reduce barriers to trade, like import tariffs, restrictions on trade in services, and other commercial practices that may intrude in the operation of international trade.

World Trade Organization (WTO)

Advantages of WTO

Transparent, predictable and attractive investment

Decreases cost of life for civilians of member countries, leaving them with an increased share of disposable income

Awakens monetary progress and influences global governance

Disadvantages of WTO

Unfair to developing third world countries as the WTO's function is designed to benefit international superpower members

Insecurity due to the fact that the WTO is not accountable for ensuring the nations’ security in any other aspect

International governments are universally known rely on free trade as a policy for successful peace and economic benefit

Historical Approach

Historians tend to argue that "free trade is mostly good"

Frieden's Second Approach to Capitalism

Free Trade influenced concepts of growth and stability to overall society. Whereas, autarky induced the opposite, economic struggle and hardship

Frieden's First Approach to Capitalism

Economic Approach

Reduction in the monopoly powerof domestic firms

As a result of absolute and comparative advantage, many international firms possess the power to sell at a lower price than domestic firms which attracts the vast majority of consumers

Returns to scale

Trading to the right country or with the right country can bring greater economic benefit as every country possesses a different share of specific goods and resources

Consumer Benefit

As a result of comparative advantage it allows consumers to acquire goods at the lowest price possible price, providing them with an economic benefit

Driskill says that economists “almost universally support free trade as a policy”

However, Economists and free traders tend to oppose protectionism and discrimination