Solved: The practice of trade policy and what impact do they have on businesses, consumers and governments.

Expert Answer

Ans: International trade:

International trade is the exchange of capital, goods, and services across international borders or territories. It is the exchange of goods and services among nations of the world. In most countries, suchtrade represents a significant share of gross domestic product (GDP).

International trade policy

Denmark’s international trade policy fundamentally aims at allowing more free trade on a global basis. The Danish economy, the global economy and the developing countries will all benefit from an increase in international trade. Denmark’s international trade policy is conducted in close co-operation with the other EU-countries. EU speaks with one voice in international trade negotiations, which gives EU impact in international trade fora.

Although international trade policy may be conducted bilaterally and regionally, Denmark and the EU remain fundamentally and clearly committed to multilateral negotiations. Thereby, the WTO – the World Trade Organization is the primary focus of Denmark’s and EU’s trade policy. The WTO system creates an international legal system with legitimacy, and it provides the necessary guarantees for all actors in the global economy. It ensures the involvement of, and consideration for, developing countries. Furthermore it is important for Denmark that the WTO agreements can be enforced through WTO’s dispute settlement system. The alternative to WTO’s regulation of international economy is that “might is right”. Likewise, it is important for Denmark to continuously search for flexibility in agriculture and other important areas of negotiation.

Impact of trade policy on businesses:

Trade policy can include the imposition of import tariffs, quotas on imports and exports of certain goods, and subsidies for local producers to support them against international competition. This can be helpful to some businesses, but can also lead to increased competition from abroad.

The government’s trade policy can affect your business by making it easier or more difficult to trade across international borders.

Trade policy can include the imposition of import tariffs, quotas on imports and exports of certain goods, and subsidies for local producers to support them against international competition. Governments often enter into bilateral trade agreements with other countries, with the aim of reducing tariffs and barriers to business and establishing a free trade area or common market. This can be helpful to some businesses, but can also lead to increased competition from abroad.

Barriers may also be increased in the form of trade sanctions or an embargo against another country.

How will the government’s economic policy affect my business?

The government’s economic policies have a number of implications for your business. The government’s economic policy will affect your business directly via taxes and interest rates, and indirectly via public spending.

Tax laws can increase or decrease the amount of tax you have to pay, and therefore will change your net profit. Special rules or exemptions may affect certain business sectors. Tax regulations can become very complex, causing you to hire a specialist tax adviser. Higher interest rates will increase what you’ll have to pay to borrow money. Both tax and borrowing policies will also affect the income of your customers, which could have an indirect impact on your sales.

Government spending on infrastructure such as roads could help your business on a practical level, and investments in education could improve the quality of the available labour force.

Impact of trade policy on Consumers:

The Impact of International Trade on Consumers, is to encourage policy education specialists to develop programs for their audiences in this subject matter area and to provide them with subject matter background and program development resources. With this goal in mind, our three speakers have been asked to focus their presentation on specific objectives.

Dr. Dennis Henderson: Identification and discussion of a variety of policy issues in international trade that impact on consumers;

Dr.James Zellner: Examination of policy development alternatives to be considered in the selection of policy options;

Dr.Georgia Neruda: Identification of international trade/consumer impact program models and resources available to the program developer.

Given the importance of the international trade issues and the concern and confusion created for consumers by the conflicting issues of job security, lower prices, and the need for stable world alliances in trade and national security, it is our hope that extension policy education educators will rise to the challenge of interesting, meaningful consumer programming.