UNIVERSITY OF TURBAT
SUBMITTED TO: MR MALIK DAD
SUMMITTED BY: ABDUL BASEER
ASSIGNMENT:VOCATION ASSIGNMENT
SEMESTER: 6TH
TOPIC TITTLE:QUESTION AND ANSWER
DEPARTMENT: MANAGEMENT SCIENCE
PROGRAM: BBA
SUBJECT:INTERNATIONAL BUSINESS
DATE:10/1/2020
QNO 1: What factors have contributed to the growth of globalization in
recent decades?
Ans: The factors that have contributed to globalization.
Containerisation:
Technological change.
Economies of scale.
Differences in tax systems.
Less protectionism.
Containerisation: the cost of ocean shipping has come less due to containerization
bulk shipping and other effencies. The lower unit cost of shipping products around
the global economy helps to bring prices in the country of manufacture closer to
those in export markets and it makes markets more contestable globally.
Technological change: sustained and rapid technological change has reduced the
cost to transmitting and communicating information. Sometimes knows as distance
a key factor behind trade in knowledge products using web technology.
Economies of scale: many economists behalves that there has been an increase in
the minimum efficient scale mes associated with some industries. If the mes is
rising a demotic market may be regarded as too small to satisfy the selling needs of
these industries. Many emerging countries have their own transnational
corporations.
Differences in tax system: The desire of businesses to benefit from lower unit labor
costs and other favorable production factors abroad has encouraged countries to
adjust their tax systems to attract foreign direct investment FDI. Many countries
have become engaged in tax competition between each other in bid to win lucrative
foreign investment projects.
Less protectionism: Old forms of non-tariff protection such as import licensing and
foreign exchange controls have gradually been dismantled. Borders have opened
and average import tariff levels have fallen
QNO2: What are the criticism of globalization?
ANS: Globalization has created much global and internal unrest in many
countries. While the dynamic of capitalism is changing and each country is unique
in its political make up, globalization can be somehow responsible for the current
global economic crisis. It has been heavily criticized for its production of negative
effects. Globalization is not simply an economic project, it also effects heavily the
socially, politically, environmental country as well.
The environmental effect which can be damage by transactional corporations. The
sounds of machines dust of them etc effect environment due to globalization.
Social effects: growing inequality is a globalization factor which effects social
clase and loss of languages can come into existence cos of globalization. Many
factors are there that disturbs the life because of globalization.
QNO NO 3: why companies engage in IB?
ANS NO 3: companies engage in international for many reasons but the goal is
typically company growth or expansion.
1 To expend sales: over years the number of consumer is increasing with their
standard of living also rising. Which has led to increased purchasing power and
demands in a particular country. When this is compared to the consumers and
demand of the entire world it opens opportunities. This means high sales and high
profit due to economies of scale that can be achieved with high volumes.
2Minimize risk: companies seek foreign markets to minimize swings in sales and
profits arising of businesses cycle recession and expansions which occur
differently in different countries.
3lower cost of production: companies go international to find alternative sources of
labor. Labor in developing countries is much cheaper when compares to develop
countries. Labor cost has direct impact on cost of production which effects the
bottom line of the company. Some companies look to international countries for
lower cost manufacturing technology assistance and other services in order to
maintain a competitive advantage.
QNO NO 4: what are different entry modes of ib?
ANS NO 4: exporting is the marketing and direct sale of domestically produced
goods in another country. Exporting is a traditional and well established method of
reaching foreign markets. Most of the costs associated with exporting take the form
of marketing expense. Exporting is the easiest way to to inter in international
market.
Advantages of exporting: fast entry and low risk.
Disadvantage of exporting: low control, low local knowledge, potential native
environmental impact of transportation.
For example, Mexico accounts 40percent of goods exported from taxes.
Licensing and franchising: an international agreement allows a foreign company to
sell the products of a producer or to use its intellectual property such as patents
trademark copyrights in exchange royalty fees.
For example: Mc Donald’s and Kentucky fried chickens and hotel chain, such as
holiday Inn and Best western.
Advantages: Fast entry, low cost low risk.
Disadvantages: Less control licensee may become a competitor, legal and
regulatory environment.
FDI subsidiaries: market expand however a frim might decide to enhance its
compative advantage by marketing a direct investment in operations conducted in
another country.
QNO NO 5: Discuss the seven main instruments of trade policy?
TARIFF
A tariff is a tax levied on import or export however tariffs full into two categories
Specific tariff. Specific tariff are levied as a fixed change for each unit of a good
import Such as $3 per barrel of oil. Valor tariff are levied as a proportion of the
value of the imported goods,
A subsidy is a government payment to a domestic produces and subsidies take
many forms including cash grants low interest loan, tax, breaks, and government
equity participation in domestic firm and by lowering production costs Subsidiaries
help domestic producer in two ways.
An import quota is direct check on the quantity of some good that may be imported
Tariff Rate Quota.
A lower tariff rate is applied to imports within the quota then those over the quota
and tariff rate quotes are common in agriculture where there goal is to limit import
s over quota is give in the country focus is given country focus that looks at how
japan uses the combination of a tariff rate quota and subsidies to protect.
Voluntary export Restrain VER.
A VER is a quota on trade imposed by the exporting country typically at the
request of the importing country government.
Local content requirements
A local content requirements is a requirement that some specific breaks up of a
good be produced domestically. Also requirements can be expressed either in
physical team
E.g. 75 percent of component that part for product must be produced locally
however product value term 75 percent must be locally. Further local content
regulation have been widely used by developing countries to shifts their
manufacturing and it bases from simple assembly of products the low specific a
product as American if 51 percent of the material by value are produced
domestically and the amount to a local content requirements.
Finally local content regulations provide protection for domestic producers of part
in the some way on import quota does by limiting foreign competition so as with
all trade policies local content regulations tend to benefit producer and not
consumers.
Administrations policies.
Administration policies to the formal instruments of trade policy and government
of all types sometimes use informal and administrative policies to limit import and
multiple exports. Administration trade policies are relating to rules designed to
make difficult for import to enter a country. That the Japanese are the master of
this trade barriers in recent decades japan s formal tariff and non-tariff barriers
have been among the lowest in the world however critics charge that the country
informal administrative barriers to import more than compensate for this. For
example, at one point the Netherlands exported tulip bulbs to almost every country
in the world
except japan and in japan customs inspectors insisted on checking every tulip bulbs
by cutting it vertically down the middle and even Japanese ingenuity couldn’t put
them back together.
Antidumping policies
It is context of international trade and dumping is variously defined as selling
goods in a foreign market at below their cost of production as selling goods in a
foreign market at below their “Fair” market value. They are designed to punish
foreign firms that engage in dumping and ultimate objective is to protect domestic
producers from unfair foreign competition. Basically anti-dumping policies vary
somewhat from country to country the majority are similar to those used in the
United States. If a domestic producers believe that a foreign firm is dumping
production in the U.S market. It can be a petition with two government agency
however the commerce department and the international trade commission in the
Korean DRAM case micron technology a U .S manufactures of DRAM filed the
petition.
Countervailing Duties
The government agency then investigate the complaints if a complaint has merit
the commerce department may impose an anti-dumping duty on the offending
foreign imports anti-dumping duties are often called countervailing duties these
duties which represent a special tariff can be fairly substantial and stay in place up
to five year. For example, microns complaint the commerce department imposed a
percent and 4 percent countervailing duties on LG Semicon and Hyundai DRAM
chips respectively. Another example a firm U.S magnesium used anti jumping
legislation to gain protection from unfair foreign competitors.
INTERNAIONAL ORGANIZATION
IMF
The IMF was conceived toward the finish of World War II, out of the Bretton
Woods Conference in 1945. It was made out of a need to forestall monetary
emergencies like the Great Depression. With its sister association, the World Bank,
the IMF is the biggest public loan specialist of assets on the planet. It is a particular
organization of the United Nations and is controlled by its 186 part nations.
Enrollment is available to any nation that conducts international strategy and
acknowledges the association's resolutions.
The IMF is answerable for the creation and upkeep of the worldwide financial
framework, the framework by which global installments among nations occur. It
consequently endeavors to give a deliberate system to unfamiliar trade exchanges
to cultivate venture and advance adjusted worldwide financial exchange.
To accomplish these objectives, the IMF centers and educates around the
macroeconomic approaches regarding a nation, which influence its swapping scale
and its administration's spending plan, cash and credit the board. The IMF will
likewise assess a nation's monetary area and its administrative strategies, just as
primary arrangements inside the macroeconomic that identify with the work
market and business. Likewise, as an asset, it might offer monetary help to
countries needing rectifying equilibrium of installments errors. The IMF is along
these lines endowed with supporting monetary development and keeping up
significant levels of work inside nations.
The IMF gets its cash from amount memberships paid by part states. The size of
every amount is dictated by how much every administration can pay as indicated
by the size of its economy. The standard thus decides the weight every nation has
inside the IMF - and consequently its democratic rights - just as how much
financing it can get from the IMF.
The bigger the nation, the bigger its commitment; consequently the U.S.
contributes about 18% of absolute portions while the Seychelles Islands contribute
a humble 0.004%. Whenever called upon by the IMF, a nation can pay the
remainder of its share in its neighborhood money. The IMF may likewise acquire
reserves, if essential, under two separate concurrences with part nations.
Altogether, it has SDR 212 billion (USD 290 billion) in standards and SDR 34
billion (USD 46 billion) accessible to get.
Any nation may apply to be a piece of the IMF. Post-IMF development, in the
early after war period, rules for IMF enrollment were left generally free.
Individuals expected to make occasional participation installments towards their
quantity, to shun money limitations except if allowed IMF authorization, to
maintain the Code of Conduct in the IMF Articles of Agreement, and to give
public financial data. Nonetheless, stricter standards were forced on governments
that applied to the IMF for subsidizing. Part nations of the IMF approach data on
the monetary strategies of all part nations, the occasion to impact other individuals'
monetary arrangements, specialized help with banking, financial issues, and trade
matters, monetary help in the midst of installment challenges, and expanded open
doors for exchange and speculation
Conclusion
The International Monetary Fund (IMF) is a worldwide monetary organization,
settled in Washington, D.C., comprising of 190 nations attempting to encourage
worldwide money related participation, secure monetary soundness, encourage
global exchange, advance high work and supportable financial development, and
decrease destitution around the globe while occasionally relying upon the World
Bank for its assets.
World Bank
The World Bank was established in 1944, and its purpose was to issue long-term
loans to
governments for reconstruction and economic development following the Second
World War. It
has since become an international development agency, aiming to promote
prosperity and
sustainable development. Over the course of more than 50 years, its
institutional culture,
approach to development and priorities (along with its role in the world) have
evolved from the
rebuilding of infrastructure to reducing poverty and improving living conditions.
The World Bank Group contains five constituent foundations: the International
Bank for Reconstruction and Development (IBRD), the International Development
Association (IDA), the International Finance Corporation (IFC), the Multilateral
Investment Guarantee Agency (MIGA), and the International Center for Settlement
of Investment Disputes (ICSID). The IBRD gives advances at market paces
important to center pay non-industrial nations and reliable lower-pay nations. The
IDA, established in 1960, gives sans interest long haul credits, specialized help,
and strategy guidance to low-pay agricultural nations in regions, for example,
wellbeing, schooling, and rustic turn of events. While the IBRD raises a large
portion of its assets on the world's capital business sectors, the IDA's loaning tasks
are financed through commitments from created nations. The IFC, working in
association with private speculators, gives advances and credit certifications and
value financing to business endeavors in non-industrial nations. Credit assurances
and protection to unfamiliar speculators against misfortune brought about by
noncommercial dangers in agricultural nations are given by the MIGA. At long
last, the ICSID, which works freely of the IBRD, is liable for the settlement by
assuagement or intervention of speculation debates between unfamiliar speculators
and their host non-industrial nations.
The World Bank is identified with the UN, however it isn't responsible either to the
General Assembly or to the Security Council. Every one of the bank's in excess of
180 part states are spoken to on the leading body of lead representatives, which
meets once per year. The lead representatives are typically their nations' account
priests or national bank lead representatives. In spite of the fact that the leading
body of lead representatives has some effect on IBRD arrangements, genuine
dynamic force is used to a great extent by the bank's 25 chief chiefs. Five
significant nations the United States, Japan, Germany, the United Kingdom, and
France choose their own leader chiefs. Different nations are gathered into districts,
every one of which chooses one chief. All through the World Bank's set of
experiences, the bank president, who fills in as director of the Executive Board, has
been an American resident.
Conclusion
The World Bank is staffed by in excess of 10,000 individuals, approximately one-
fourth of whom are posted in non-industrial nations. The bank has in excess of 100
workplaces in part nations, and in numerous nations staff individuals serve
straightforwardly as strategy consultants to the service of money and different
services. The bank has consultative just as casual binds with the world's monetary
business sectors and establishments and keeps up connections with
nongovernmental associations in both created and agricultural nations.
GATT
The GATT outgrew the Bretton Woods Agreement. The culmination at Bretton
Woods likewise made the World Bank and the International Monetary Fund to
arrange worldwide development.
The highest point nearly prompted a third association. It was to be the profoundly
aggressive International Trade Organization (ITO). The 50 nations that began
arrangements needed it to be an organization inside the United Nations that would
make rules, on exchange, yet additionally work, product arrangements, strategic
policies, unfamiliar direct speculation, and administrations. The ITO contract was
consented to in March 1948, yet the U.S. Congress and some other nations'
councils wouldn't approve it. In 1950, the Truman Administration pronounced
annihilation, finishing the ITO. The General Agreement on Tariffs and Trade
(GATT) was the main multilateral international alliance. It previously produced
results in 1948 as an arrangement between 23 nations, and it stayed essentially
until 1995—so, all things considered its enrollment had developed to 128 nations.
It was supplanted by the World Trade Organization. The General Agreement on
Tariffs and Trade was an international alliance that wiped out levies and expanded
global trade.1 as the principal overall multilateral international alliance, the GATT
administered a critical segment of worldwide exchange between January 1, 1948,
and January 1, 1995. The understanding finished when it was supplanted by the
more vigorous World Trade Organization (WTO).
The GATT had three primary arrangements. The main necessity was that every
part should present most preferred country status to each other part. All individuals
should be dealt with similarly with regards to levies. It avoided the extraordinary
duties among individuals from the British Commonwealth and customs
associations. It allowed duties if their evacuation would make genuine injury
homegrown makers.
The first 23 GATT individuals were Australia, Belgium, Brazil, Burma (presently
Myanmar), Canada, Ceylon (presently Sri Lanka), Chile, China, Cuba,
Czechoslovakia (presently the Czech Republic and Slovakia), France, India,
Lebanon, Luxembourg, Netherlands, New Zealand, Norway, Pakistan, Southern
Rhodesia (presently Zimbabwe), Syria, South Africa, the United Kingdom, and the
United States. The participation expanded to 128 nations by 1994.
Conclusion
The GATT lives on as the establishment of the WTO. The 1947 arrangement itself
is defunct. But, its arrangements were consolidated into the GATT 1994
understanding. That was intended to make a big difference for the economic
alliance while the WTO was being set up. Subsequently, the GATT 1994 is itself a
part of the WTO Agreement.
World Trade Organization
World Trade Organization (WTO), worldwide association set up to manage and
change world exchange. The WTO is the replacement to the General Agreement on
Tariffs and Trade (GATT), which was made in 1947 in the assumption that it
would before long be supplanted by a particular office of the United Nations (UN)
to be known as the International Trade Organization (ITO). In spite of the fact that
the ITO never emerged, the GATT demonstrated strikingly effective in changing
world exchange throughout the following fifty years. By the last part of the 1980s
there were requires a more grounded multilateral association to screen exchange
and resolve exchange debates. Following the fruition of the Uruguay Round
(1986–94) of multilateral exchange arrangements, the WTO started procedure on
January 1, 1995.
The ITO was at first conceived, alongside the International Monetary Fund (IMF)
and the World Bank, as one of the vital mainstays of post-World War II remaking
and financial turn of events. In Havana in 1948, the UN Conference on Trade and
Employment finished up a draft sanction for the ITO, known as the Havana
Charter, which would have made broad guidelines administering exchange,
speculation, administrations, and business and work rehearses. Nonetheless, the
United States neglected to sanction the arrangement. Then, a consent to eliminate
the utilization of import standards and to diminish levies on product exchange,
haggled by 23 nations in Geneva in 1947, came into power as the GATT on
January 1, 1948.
The WTO has six key targets: (1) to set and implement rules for worldwide
exchange, (2) to give a gathering to arranging and observing further exchange
advancement, (3) to determine exchange debates, (4) to expand the
straightforwardness of dynamic cycles, (5) to help out other significant global
monetary foundations engaged with worldwide financial administration, and (6) to
help agricultural nations advantage completely from the worldwide exchanging
framework. Albeit shared by the GATT, by and by these objectives have been
sought after more extensively by the WTO. For instance, while the GATT zeroed
in only on merchandise—however a lot of agribusiness and materials were avoided
—the WTO includes all products, administrations, and protected innovation, just as
some venture approaches. Moreover, the perpetual WTO Secretariat, which
supplanted the interval GATT Secretariat, has reinforced and formalized
components for assessing exchange strategies and settling debates. Since a lot a
bigger number of items are covered under the WTO than under the GATT and in
light of the fact that the quantity of part nations and the degree of their support has
developed consistently—the joined portion of worldwide exchange of WTO
individuals presently surpasses 90% of the worldwide aggregate—open admittance
to business sectors has expanded significantly.
The guidelines exemplified in both the GATT and the WTO fill in any event three
needs. To start with, they endeavor to secure the interests of little and frail nations
against unfair exchange practices of huge and ground-breaking nations. The
WTO's most-supported country and public treatment articles specify that every
WTO part should give equivalent market admittance to any remaining individuals
and that both homegrown and unfamiliar providers should be dealt with similarly.
Second, the guidelines expect individuals to restrict exchange just through duties
and to give market access not less great than that predetermined in their timetables
(i.e., the responsibilities that they consented to when they were allowed WTO
participation or consequently). Third, the standards are intended to help
governments oppose campaigning endeavors by homegrown vested parties looking
for uncommon kindnesses. Albeit a few special cases for the principles have been
made, their quality and replication in the center WTO arrangements were proposed
to guarantee that the most noticeably awful overabundances would be evaded. By
accordingly carrying more noteworthy assurance and consistency to global
business sectors, it was figured, the WTO would upgrade financial government
assistance and decrease political strains.
