International Trade IA.

Question: Write a Report on International Trade IA. Answer: Several substantial importances have been gained by the issues of international trade as well as economic growth with the introduction of trade liberalization policies in the developing countries. The liberalization of trade mostly leads to the removal as well as reduction of barriers on the free exchange of goods between countries. The impact of international trade mostly depends on globalization. Trade promotes economic competence by providing a broad range of commodities mostly at lower costs due to specialization. At present, globalization is clearly the leading international business model at present. Globalization has also been considered as the remorseless pursuit of competitiveness that produces the highest cost at a lowest sustainable price. Multilateral and provincial action has diminished barriers to international trade and investment. Due to globalization, firms are able to separate the manufacture of commodities and services into international value chain. They are also able to demeanor trade in inputs as well as completed commodities and services. [1] The article deals with exploration and exploitation of trade opportunities that exists between the United Kingdom and Canada. This is mostly because, diversification of international trade as well as foreign portfolio investment by Canada, encourages indication that moves towards seizing blue-chip prospects that is generated in the UK. Foreign portfolio investment raises the liquidity of domestic capital markets that helps to develop market competence as well. It helps to become a market more liquid, as they become more deep and wide.[2] Foreign portfolio investment can also bring discipline as well as expertise into the domestic capital market. It also helps to promote expansion of equity markets. The article states Canada and the UK share an enviable economic partnership. An economic partnership agreement (EPA) is a scheme to generate a free trade area. EPA also generates opportunities to deal with several issues that are related to trade as well as development. As a result, the country helps other foreign companies to bring their high-quality expenditure to the dynamic economy of the UK. [3] Figure: High-Quality Expenditure (Source: Created by Author) High quality expenditure mostly focuses on the size and composition of public expenditure. The State does not exert its influence on economy as well as society with the help of public expenditure. Comparative advantage is an economic theory that deals with the profits from trade for individuals as well as firms that takes place from divergences in the factor endowments. Figure: Comparative Advantage (Source: Created by Author) The theory of comparative advantage holds the fact that two countries will be better off if each of the country specializes in what it does best. Canada and the UK share an exclusive link unmatched by any of its competitors that provides each country with a first-mover advantage. The first-mover advantage is the benefit that is gained by the initial imperative occupant of a market segment. It is also referred to as technological leadership. With the help of first-mover advantage both Canada and the UK will be able to lead to innovative technology that will provide sustainable cost advantage. The firms will also accomplish leadership in market share. The recognition of brand name is considered as the major first mover advantage. It helps to simply define ability of the firm to be better off as compared to its competitors because of being first to market in an innovative goods category. [4]The EU-Canada Comprehensive Economic and Trade Agreement (CETA) will improve trade opportunities considerably for European companies in Canada. The improvement in trade will lead to increase in output that is produced by an economy over a time-period. The outward shift in the production possibility curve leads to increase in productive potential of an economy. Investment in new technology is inevitably more effectual as compared to old technology. However, with inadequate resources an economy will not be able to expand. [5] Figure: Production Possibility Curve (Source: Created by Author) A division of labor on the other hand illustrates the fact that how production can be divided into separate tasks. A division of labor leads to improvement of production capacity as well as shift of the PPF outwards. References: Abbas, S., 2014. Trade liberalization and its economic impact on developing and least developed countries.Journal of International Trade Law and Policy,13(3), pp.215-221. De Melo, J. and Regolo, J., 2014. Revenue and Welfare Implications for Rwanda finalizing an Economic Partnership Agreement with the EU. Jain, P.K., Kuvvet, E. and Pagano, M.S., 2017. Corruptions impact on foreign portfolio investment.International Business Review,26(1), pp.23-35. Laursen, K., 2015. Revealed comparative advantage and the alternatives as measures of international specialization.Eurasian Business Review,5(1), pp.99-115. Malcolm, M., 2017. Do local exports impact congressional voting on free trade agreements?.Economics Letters. https://policyoptions.irpp.org/magazines/february-2017/jewel-britannia-the-value-of-trade-with-the-uk/ Abbas, S., 2014. Trade liberalization and its economic impact on developing and least developed countries.Journal of International Trade Law and Policy,13(3), pp.215-221. Jain, P.K., Kuvvet, E. and Pagano, M.S., 2017. Corruptions impact on foreign portfolio investment.International Business Review,26(1), pp.23-35. De Melo, J. and Regolo, J., 2014. Revenue and Welfare Implications for Rwanda finalizing an Economic Partnership Agreement with the EU. Laursen, K., 2015. Revealed comparative advantage and the alternatives as measures of international specialization.Eurasian Business Review,5(1), pp.99-115. Malcolm, M., 2017. Do local exports impact congressional voting on free trade agreements?.Economics Letters.