ipl-logo

Advantages And Disadvantages Of Export Subsidies

1708 Words7 Pages

QUESTION1
EXPORT SUBSIDIES
Export subsidy reduce the price paid by foreign importers, which means domestic consumers pay more than foreign consumers. Export subsidies are government policies to encourage the outflow of goods and services from a domestic economy to the international market and discourage the sale of goods and services on the domestic market through direct payments, tax relief for exporters.
Advantages of export subsidies
 infant industries
Export subsidies protect small or developing countries so that they can benefit from economies of scale, as a result the production cost of infant industries will be low.
 National security
Domestic production of goods that are found to be harmful to the security of the nation are encouraged …show more content…

Consumers will be encouraged to buy local products because they are more affordable
Revenue generation
Revenue tariffs are most collected on imports.Developing countries collect taxes on cross border transactions.
Maintenance of foreign exchange reserves
Government imposes import tariffs in order to limit imports which results in the conservation of foreign reserves.(
Disadvantages

GLOBALISATION
Globalisation refers to the integration of markets in the global economy. Markets where globalisation is common include financial markets such as capital markets.
Advantages
Access to market
Availability of larger markets means that firms may experience an increased rate in the demand for their product.as well and benefit from economies of scale which leads to a reduction in the average production cost.

Availability of resources
Globalisation enables worldwide access to sources of cheap raw materials and this enables firms to be cost competitive their own markets and in overseas markets. Seeking out the cheapest material from around the world is called global sourcing because of cost reductions and increased revenue globalisation can generate increased profits for shareholders.
Revenue …show more content…

• Further liberalisation will result in Lower prices. The removal of tariff barriers can lead to lower prices for consumers. For example removing food tariffs in South Africa will help reduce the global price of agricultural commodities such as maize, milk, rice and grains.This would benefit South Africa since it’s a developing country which is largely dependent on the agricultural sector and benefit foreign countries who are importers of these agricultural commodities.

Show More
Related

  • Columbian Exchange Dbq Essay

    311 Words  | 2 Pages

    One advantage from globalization is the idea of joint-stock companies. Joint-stock companies gave multiple people around the world the ability to own a company and make money off of it, even if the partial owners didn't live near the company (Document

    Read More

  • American Foreign Policy Between 1789-2003 Dbq

    531 Words  | 3 Pages

    With such foreign policy being passed by Thomas Jefferson on the United States trading, protected them from perceived or actual threats from

    Read More

  • How Does Globalization Affect Canada

    1226 Words  | 5 Pages

    Reducing trade restrictions such as imported taxes (known as tariffs) allows for the transfer of goods, services, and investments to be free across national borders. Canada, United States and Mexico already have an agreement through NAFTA (North American Free Trade Agreement). The importance of globalization, however, is free trade throughout the world. Goods, services and investments move freely to find the most competitive environment so that customers and investors benefit. This kind of environment depends on several factors such as labor costs, government regulations like environmental controls on manufacturing, and the value of a nation's currency.

    Read More

  • 1920s Social Changes Essay

    660 Words  | 3 Pages

    From the article, Smoot-Hawley Tariffs, it states, “it raised the prices of imports to the point that they became unaffordable for all but the wealthy, and it dramatically decreased the amount of exported goods, thus controlling bank failures, particularly in agricultural regions.” This proves the impact tariffs have on the economy in America and how destructive it is. After all, tariffs prove to be a significant factor in leading the nation to the Great

    Read More

  • The Pros And Cons Of The Spanish American War

    1367 Words  | 6 Pages

    Enacted in response to the escalating conflict in Europe, the policy allowed the United States to supply war materials to other countries without getting directly involved in the war. This approach brought several benefits to the United States, both economically and strategically. By allowing the sale of goods to warring nations, the policy stimulated American industries and facilitated the export of American products. The United States was able to capitalize on the demand for war materials and supplies, leading to increased production and job opportunities within the country. Resch, this policy was a crucial factor in reviving the U.S. economy after the Great Depression, as it provided a significant boost to American industry and helped restore economic stability (Resch, 2011).

    Read More

  • Case Study Qnt 561 Week 3 Tax Trouble

    1218 Words  | 5 Pages

    QUESTION 3 Tax trouble 1.Ad Valorem Tariff • An Ad Valorem Tariff is an import duty that is charged as a fixed percentage of the cost of one unit of the goods. Therefore, accurate documentation reports on the part of the Importer of Record are important, as the import duty is charged as a percentage of the monetary value of the good. • Reason for using this tariff is to be able to adjust the tax burden according to the amount the traders spend on taxed item, also to avoid discrimination of specific rates against the low-priced varieties of commodities, and to stimulate government revenue • For example, The US currently levies a 2.5% ad valorem tariff on imported automobiles. Thus if $100,000 worth of autos are imported, the US government collects

    Read More

  • PESTEL Analysis: Pestel Analysis Of UPS

    854 Words  | 4 Pages

    And the world is connected by internet, freight market help raising the efficiency of the stuff trading between suppliers and

    Read More

  • Pros And Cons Of International Trade

    751 Words  | 4 Pages

    There are quite a number of trade restrictions that a government can implement on imported goods in order to protect domestic industry, such as tariffs, quotas, embargo, safety standards regulations, Anti Dumpling, complex custom duties, labeling requirements and quality restrictions. Tariff refers to tax placed on foreign goods which raises the price of the imported goods as it enters the country. This is the most common form of barrier to trade. Through tariff imposed on imported goods, this will lead to an increase in government revenue as well as protection on domestic industry. If the government motive is to increase revenue, then tax usually imposes on imports in which its demand is inelastic, such as cigarette.

    Read More

  • Protectionism Essay

    2919 Words  | 12 Pages

    Protectionism is coming to us from all directions, and numerous nations are using both direct and indirect barriers to trade, as when they require to do so. What economists mostly talk about are the threats of protectionism, rather than its benefits and how protectionism isn’t a long term solution. By now we have understood that protectionism, whether we like it or not, is used in certain economic situation by every other country, but it shouldn’t be seen as a permanent solution. Protectionism is a superficially convincing concept, because we can immediately point out the number of jobs saved, lesser no of imports etc. but it slightly more difficult to see the benefits of free trade in numbers, but one country’s protectionist policies will not just hurt their trading countries exports.

    Read More

  • The Pros And Cons Of Globalization In Canada

    733 Words  | 3 Pages

    Nearly everything is outsourced from this country, we are 100 percent dependent on other countries to produce our items. Sure, we can blame China, we can blame the 3rd world, but the real problem is the corporations. It is big corporations that do not care about where the product is coming from but about maximizing profits as much as possible. Even companies that produce quality products are outsourcing to save money because it appeals to the shareholders, which all makes sense to a business person. There are some pros to globalization as Mike Collins states that, "supporters of globalization argue that it has the potential to make this world a better place to live in and solve some of the deep-seated problems like unemployment and poverty."

    Read More

  • The Pros And Cons Of International Trade

    1011 Words  | 5 Pages

    Like in Malaysia, you have to pay for it at your local store to buy tennis shoes. On the other hand, reduced labor costs will force you to pay less for new shoes. Trading allows consumers and countries to get access to goods and services which are not available in their own country. Almost every product in the international market can be found at food, clothing, accessories, petroleum, jewelry, stocks, money, alcohol and water part. Services include tourism, banking,

    Read More

  • Advantages And Disadvantages Of Global Trade And International Trade

    998 Words  | 4 Pages

    International trade is also knows as a globe trade which give the country opportunity to expands their markets for both good and services that otherwise may not have been available in other countries. This type of trade also give advantages for world to rise the economy in term of prices, supply and customer demands, affect and are affected by global events. All of the good and services can be found on international market. International trade will involve two types of process which be export and import. Export is a function of international trade in which the goods produced in a country will be sent to another country for future sale or trade.

    Read More

  • Advantages And Disadvantages Of Import Substitution

    1399 Words  | 6 Pages

    There are many different approaches to development in which countries over the years adopted to further develop and grow their economy. Some countries adopted the approach of import substitution in which they try to decrease their dependency on other nations and protect and foster domestic small companies. The disadvantage for an import substitution based industry, ISI, is although it achieves growth it does so through a greater period of time. On the other hand, growth and development from export oriented industries, EOI, has greater results and is so much faster than import substituting industries. Examples of countries that adopted import based industries are countries of Latin America while countries that adopted Export oriented Industries are countries of East Asia.

    Read More

  • Disadvantages Of Globalization In Developing Countries

    805 Words  | 4 Pages

    First of all, the most obvious advantage that the globalization brings about is that goods (such as car, laptop, smartphone, etc.) produced in one country can be sold in other countries .For the developed countries, now the can easily export their products and services to other countries to earn money. And for the developing countries, it can create opportunities of employment and reduce poverty, which is very good for the economy. The next positive aspect which is taken into consideration is that the developing countries now can receive sources of capital, new technologies from developed countries, which is very essential for the growth of a country. And in return, the developing countries let the developed countries’ companies do business in their countries.

    Read More

  • Benefit Of Globalization In The Philippines

    945 Words  | 4 Pages

    Through globalization, people around the world share information as well as goods and services. As a result of globalization, consumers around the world enjoy a broader selection of products than they would have if they only had access to domestically made products. International trade has stimulated tremendous economic growth across the globe-creating jobs and reducing price. As globalization accelerates change in technology, more jobs are created and as a result more people are employed thus increasing their purchasing power. As the demand of consumers rise, more and more products are produced to suit the needs and wants of the people.

    Read More

More about Advantages And Disadvantages Of Export Subsidies

Open Document