Question

Read chapters 18,19,20 in the text on International Trade, International Finance, and Developing and Transitional Economies.

2. Identify one area each in International Trade, International Finance, and Developing and Transitional Economics that you believe will be of high importance in the next few years. It does not need to be so now.

3. Provide a 2-3 page outline and analysis of each area, along with your conclusion on what economic approaches and tools will work best to address it successfully. For each area clearly draw from and reference at least two scholarly sources, in addition to the text, that are no more than two years old. The project must be in APA format and submitted as a Word document.

Macroeconomics: A Contemporary Approach. 9 or 10th ed. are OK

Answer 1

Solution-

Intensive competition

International trade through globalization has opened up market opportunities of various products and services to a great variety of providers of those goods and services. According to Cavusgil, S. T., Knight, G., Riesenberger, J. R., Rammal, H. G., & Rose, E. L. (2014), this opening up of the global market provides a chance for many sellers from different countries to offer similar products to the same target market.

As stated by O'neil, P. H. (2015), the market competition is very stiff due to the number of players involved. This is contrary to the facts that if free international trade was not allowed, then each trader would focus on their countries and the competition would be lower. Appropriate strategies have to be formulated by traders to ensure they maintain market share or even gain. One of those approaches is to do a proper market research so that a trader knows exactly how to position his/her goods and services. Another approach is to advertise the goods and services by investing greatly in goods and services promotion.

Frequent Market Changes

It has proven very difficult for traders in international trade to accurately anticipate changes in markets located in foreign countries. According to Nahavandi, A. (2016), there would be changes in policies, the legal structure affecting the business, interest rates, inflation rates, and hence prices in international markets may change frequently. Such changes are due to entry of new competitors, changes in buyers' preferences, changes in import duties and freight rates, fluctuations in exchange rates, etc.

One approach of dealing with these frequent market changes for traders is to always do some research about the targeted market as well as keeping up-to-date with all information that would impact the business one way or another. This is in accordance with Stark, J. (2015).

Another strategy is to anticipate for these changes and plan ahead even if they are unforeseen at the time of the plan. This enables the traders to avoid the reality shock and great losses due to unanticipated changes in the targeted markets.

Imports and exports restrictions

All countries charge some customs duties on imports in an effort to protect their local firms. In a similar manner, tariff rates are also put on exports of raw materials. Importers and exporters have to face tariff restrictions which impacts negatively on business.

They are several customs formalities and rules that each trader seeking to import or export is required to fulfill before the business is initiated. Foreign trade policy, procedures, rules and regulations differ from country to country and keep on changing from time to time as mentioned by Hellweg, S., & i Canals, L. M. (2014).

To deal with this issue, many traders and nations have collaborated or come together to form trading blocks whereby there would be no tariffs levied upon exportation and importation of goods and products to and from a certain nation. These are bilateral agreements which have impact on the countries involved equally, Burnett, K., & Murphy, S. (2014).

References

Nahavandi, A. (2016). The Art and Science of Leadership -Global Edition. Pearson.

Cavusgil, S. T., Knight, G., Riesenberger, J. R., Rammal, H. G., & Rose, E. L. (2014). International business. Pearson Australia.

O'neil, P. H. (2015). Essentials of Comparative Politics: Fifth International Student Edition. WW Norton & Company.

Knight, J. (2015). Internationalization: A decade of changes and challenges. International Higher Education, (50).

Stark, J. (2015). Product lifecycle management. In Product Lifecycle Management (pp. 1-29). Springer International Publishing.

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