This may be true as far as international trade laws and regulations are concerned. But, on the other hand, according to Wallerstein (2004), there is a more serious issue of trade imbalance whereby developed countries have an upper hand due to their economic strength advantage, superior manufacturing capabilities, and advanced logistics and delivery systems. In some occasions, Hurst (2008) claims that developed countries impose trade sanctions mostly against developing nations for reasons not directly related to trade such as it stand on homosexuality, prostitution, issues of religions etc. Poor nations would never do the same to their developed counterparts because they would lose more and it would even look
However, in the long run these will have an effect on unemployment that will rise up and getting even worse. Moreover, most people are unlikely to be happy to accept higher taxes as it reduces disposable income and the level of consumption. A reduction of government spending may result in less people will support the government. Demand side policies will bring down the price level (reduce inflation), but they will result in lower national output and rise in unemployment. Therefore, government could use supply side policies to deal with the unemployment situation such as in interventionist supply-side policies will increase the levels of human capital of an economy by support education and training institutions with subsidies or tax benefits and for market-based supply-side policies will reduce trade union power.
What worst is when businesses lower prices of their product in a desperate attempt for people to buy their goods. Deflation is measured by any decrease in the Consumer Price Index. Fall in the Consumer Price Index causes the prices to fall. When prices continuously fall, people tend to put off purchases hoping that they can get a better deal. This pressured the manufacturers to constantly lower the prices of their products.
While free trade aims at attracting more consumers to increase sales turnover and generate more profits, fair trade aims at educating the consumers about the benefits of producing goods without the exploitation of labour or the environment. Thus, fair trade mainly thrives on the demand created by the consumers for such products. Free trade can benefit everyone, the developed and developing world. (Hufbauer, 2008) Free traders believe the best way to lessen poverty in the long run is to permit free trade while fair traders think that opening trade will even further make rich nations becoming richer and poor nations becoming poorer. But there are many ideas on having a managed fair trade which will generally result in sustainable long-term prosperity and equality between
The imposition of tariffs generates deadweight loss of both producer and consumer surplus. The welfare of both parties is reduced. It leads to production inefficiencies meaning producers that are safeguarded by the government have little to no incentive to reduce their cost of production leading to higher average costs and x-inefficiency. Protectionism causes trade wars between countries. If one imposes trade barriers on the imports of another country’s goods, the country will face retaliatory action by another.
Protectionism can also have a negative impact on the growth of the national economy, for instance economists argue that imposing trade barriers on imports from other countries would harm the exporting competing industrial sectors in US as trading partners would also impose protectionist measures to balance the returns from trade which will result in the decrease of US
Hyperglobalist believes that the power of individual governments is weakening as a whole, and that globalization has weakened the ability of individual governments to regulate the economy. (WEB Tiffany, Adams). So it makes the transnational governance organizations become increasingly important. There are some people play against the globalization. The protesters claim that globalization is bad for poor people in poor countries.
Impact on government taxation and spending and negatively affect country finances. Due to taxation on labor income deforms work-leisure decisions and it increases unemployment rates. When our country is on increasing unemployment rates it causes deteriorating economy. Due to deteriorating economy , the numbers of investors to invest in Malaysia decreases drastically. When there is no investment, there is no new jobs, therefore labor demand will decrease accordingly.
Inflation The first effect is the purchasing power reduce. When the price of goods rise speedily, consumers become more concern about future costs, prices of goods and services. When inflation rises but the salaries still remain, the purchasing power of consumers may decline, especially for retirees and fixed-income consumers. This is because they are unable to pay for more costs by the same income. They tend to spend less and reduce their standard of living.
In the country, as the news reveals in recent days, there have been delays in customs, which involve a series of documentation, which has not allowed speeding the clearance of goods. If the companies of the country are delayed in their exports, they lose competitiveness abroad, which can be threatening for this economic agent, and can lead to cessation of operations, generating increases in unemployment. Although it seems unimportant to analyze the trade balance, as a source of solution for unemployment, it can be shown that its actions influence the unemployment rates of a country. It should be sought to implement technologies or mechanisms that allow the customs to execute the process of verification of merchandise in a more expeditious way, seeking not to affect the export operations carried out by the country's companies, and which are indispensable sources of income, for Its