Global Trade

Essay by mamekUniversity, Bachelor'sA, March 2002

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It is said that the world is becoming increasingly smaller due to improved communications and ease of travel amongst other factors. Companies that are unprepared for global business will be left behind in the coming years. With the global trade, the company could be more aggressive, open-minded and gain more benefit with the higher productivity (larger marketplace) and the exchange rate. Moreover, the competition and the economic are the most companies fight for survival. On the other hand, global trade could help a country be wealthier based on the foreign investors and the benefit of import and export, such as automobile (government gain 60-70% duty taxes from each import automobile). Thus, global trade is the key for the companies and countries to grow with the world.

In global trade, both imports and exports contribute in different ways to the development of a certain economy. For example, Malaysia has an open economy that allows importing and exporting.

When a country imports any product it can be because it does not produce it or because it wants to give greater variety to certain areas of the market. This last case should be like a stimulus for national producers to produce more and with a better quality and to find ways of having lower costs of production. These aims come to light because, as foreign products enter the market, they may be of a better quality and even cheaper than the national ones. Now, the consumers will have more possibilities to choose from and, it is very probable that they will choose the cheaper and brand new products. So, if national producer do not do anything in order to improve their products, then they will be in danger of going to bankruptcy. As a result of this, the national products have to seek...