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Africa
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Cross-border Trade in Services Is Not New!
Published in Sarita D. Jackson, International Trade in Services, 2021
International trade finance experienced a downward trend as countries around the globe moved away from outward, open-market practices toward inward-looking protectionist strategies. In other words, trade barriers were used by numerous countries as a way of protecting local producers from foreign competition. The rise of protectionism meant the decline of the export of goods and, thus, a reduction in the need for international trade financing. Financial services rebounded during the latter half of the 20th century due to the resurgence of exports and credit requests. Various institutions, such as commercial banks and government agencies, offered export financing, credit insurance, and loan guarantees. Today, export financing is a key service that helps to boost trade now that sellers can get the required capital to produce, supply the needs of an overseas buyer, and reduce the risk of non-payment.
Sustainable Development: How to Avoid Collapse and Build a Better Society
Published in John C. Ayers, Sustainability, 2017
Globalization is partly a result of increasing international trade made possible by cheap transportation fuels. Free trade agreements removed trade barriers, allowing goods to flow freely from producer to consumer nations. This resulted in greater efficiency and lower prices because each country can specialize in producing only products or services for which they have a comparative advantage over other countries. Countries with specialized production then obtain all other goods and services through trade (Rees 2010). For example, having the raw materials for a product that other countries do not have gives a country a competitive advantage; a country with large iron deposits and cheap labor is likely to produce and export steel. However, specialization makes nations less resilient, as they must rely on other nations for critical resources. In Collapse, Diamond (2005) notes that the loss of a trading partner was one of the influential factors contributing to the collapse of some ancient societies, particularly those in the very resource-limited Pacific Islands. For example, if country B relies on country A for food, but food production in country A declines because of climate change, then country A may stop exporting to country B so that it can feed its own people, and people in country B will starve. Thus, increasing specialization leads to decreasing self-reliance and increasing vulnerability. Many countries may depend on a single supplier of a product, so if that country stops exporting that product many countries are adversely affected and the economic impact is magnified. In a globalized world, countries are increasingly interdependent, so that trade disruptions can become global economic crises.
International Economics and Aviation
Published in Bijan Vasigh, Ken Fleming, Thomas Tacker, Introduction to Air Transport Economics, 2018
Bijan Vasigh, Ken Fleming, Thomas Tacker
Trade barriers are attempts by the government to regulate or restrict international trade. They all work on the same common principle of imposing an additional cost on the imported good that will result in an increased price for that good. A country can protect domestic industry by imposing a trade tariff, a quota or a trade subsidy.
Explore the export performance of textiles and apparel ‘Made in the USA’: a firm-level analysis
Published in The Journal of The Textile Institute, 2021
Another factor is high trade barriers facing the U.S. T&A exports and a lack of free trade agreements between the United States and its trading partners. Trade barriers, such as tariffs and various non-tariff barriers, increase a manufacturer’s production costs, and limit its ability to export (Imbruno, 2016). While the U.S. trade barriers overall are among the world’s lowest, the trade restrictions facing the U.S. exports, including T&A products, often are much higher (Jackson, 2018). For example, as shown in Table 2, over half of the world’s top ten textile importers set an import tariff rate higher than the United States in 2018, which significantly hindered the export potential of the U.S. textile products to these markets (WTO, 2019). Similarly, whereas the United States plays a relatively minor role in apparel exports because of cost disadvantages, the high tariff barriers make ‘Made in the USA’ garment even less price competitive compared with locally made products (WTO, 2019).
Global distribution network design: exploration of facility location driven by tax considerations and related cross-country implications
Published in International Journal of Logistics Research and Applications, 2020
Lorenzo Bruno Prataviera, Andreas Norrman, Marco Melacini
Other relevant issues to consider are customs duties and trade tariffs (Arntzen et al. 1995; Dong and Kouvelis 2020), as well as customs requirements and procedures (Sawhney and Sumukadas 2005) or duty drawbacks (Häntsch and Huchzermeier 2016). Generally, trade barriers are meant to protect national competitiveness from foreign competition, and they are usually classified into two types—tariff and non-tariff barriers (MacCarthy and Atthirawong 2003; Adams 2008). Tariff barriers refer to paying taxes on imports and exports of goods. They are often computed as a percentage of the product value that crosses the border (i.e. customs value), but they may also be levied based on other parameters, such as weight or volume (EY 2012). MNCs also face several non-tariff barriers, such as local content requirements, technical standards, quota restrictions and complexity in the required documentation (Lee 2010). Trade agreements may also entail lower customs duties or special treatment for some products and trading partners if specific requirements are met. In fact, the level of customs duties depends not only on the customs value but also on the goods classification (i.e. the tariff code) and the origin of the goods being imported (Arntzen et al. 1995; Cohen and Lee 2020). In the last decades, many countries have signed free-trade agreements, calling for a preferential origin (which entails reduced or zero-rate tariff duties) for goods originating from a specific trade partner (Meixell and Gargeya 2005; Frias et al. 2014). For instance, a shoe manufacturer retained its manufacturing plant in Canada to satisfy demand in Israel, taking advantage of the zero duty rate agreed on between Canada and Israel (Cohen and Lee 2020). Indeed, given the trade agreements and the customs duties in place, the classification of goods and the customs duties that should be paid may change (Henkow and Norrman 2011). As a consequence, homogeneous markets where trade could be conducted under specific rules (e.g. the EU or NAFTA) have been established (Adams 2008), but their existence implies higher customs duties and more restrictions created for other products and trading partners (Lee 2010; Dong and Kouvelis 2020).