Thursday, October 17, 2019

Fair system of international trade Essay Example | Topics and Well Written Essays - 2500 words

Fair system of international trade - Essay Example However, the economic, legal and socio-political disparity in countries has created significant problems and challenges to such business thus making it difficult to continue with operations1. Different countries have different laws governing the operation of foreign businesses and this has been demonstrated to create inequality and unfairness in the market. Some laws favour domestic firms and make it difficult for the international companies and organisations to compete favourably with domestic firms. The existence of laws and political systems that favour one group as opposed to the other affect natural competitive advantage that organisations should gain in the market and bestow upon domestic markets undue advantage over the others. Apart from legal systems that affect operations of multinationals, other forms of inequalities exist that make it difficult to gain a completely free system devoid of legal, political and socio-economic interference. Although having a completely fair sy stem of trade seems far-fetched and utopian given the existing inequalities between countries, trade strategies employed by developed countries and huge global corporation can be fashioned in such a way as to allow a fairer system of trade. As such, it is not that a fairer system of trade cannot exist, but that the people, businesses and countries benefiting from the current system of trade do not want such a system to exist. As long as the economic and development interests of certain powerful countries come above the interest of other less powerful countries, such unfair trade will persist and the possibility of change for the better will seem not possible. Different countries in different parts of the world have different political and legal stages of development and maturity, which may differ with those of other countries. This affects the ability of other multinationals especially from developing countries to competitively conduct their business without facing the challenges of the legal and socio-economic systems. A number of factors make it impossible to gain a fair business environment in the global sphere and these majorly depend on the economic development and political maturity of the country2. Most developed countries have enacted laws that although are aimed to protect the interest of the citizens, affect the smooth development and operations of international trade around the world. International trade can only be complete if a country allows for free movement of goods and services as exports and imports. However, this is not the case in a number of countries including the United States and Canada who have enacted a number of legislations that make it impossible to achieve a fair trade system3. From 1930a, the United States has enacted a number of laws, which are aimed at eliminating or reducing the overall volume of international trade in the country by restricting the amount of goods that can be imported into the country. The enactment of the mu ltilateral trade agreement, the tariff act of 1984the omnibus trade act of 2988 and the antidumping act of 1921 made it impossible for multinationals to increase their operations by increasing imports into the country. The American legislations that have been used to protect the country and domestic firms from competition by multinationals has been widely viewed as being protectionist in nature and this increases unfair business practices in the global market4. Apart from the legal differences that do exist between countries, other factors such as the social aspects of a country affects the performance of foreign companies and give the domestic firms undue advantage. Citizens naturally feel at ease with products

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