A Discussion on International Trade & Its Law & Regulations
INTERNATIONAL TRADE is one fascinating medium that endorses rationale pertaining to liberalization (progressive reduction of exchanging or trading barriers between world nations).
It primarily defines a set of rules and guidelines on the PURCHASE and SALE of goods and products from several intercontinental barriers.
Such practices are strictly governed and regulated by several sets of rules exhibited as agreements and treaties.
Quick Trivia on Inception of International Trading Law
- Transnational trading law adhered to in the 21st century was primarily adopted from commercial laws known as ‘lex maritime (law for sea merchants) and ‘lex mercatoria’ (law for land merchants).
- Modernistic trading regulations (superseding bilateral agreements) started soon after the 2nd World War with the GATT (General Agreement on Tariffs and Trade) to negotiate multilateral agreements for trading goods and services.
- Moreover, Intercontinental Trade pertained to economic liberalism theories and was formulated in Europe and then in the USA in the 18th century.
How Does International Trade Influence Our Daily Lives?
International Trade has been influencing our daily lives. The commonest examples are the stylist clothes we access online and in physical markets.
On a normal day, we wear designer jeans, shoes, accessories, or even posh formal attire (most of which aren’t manufactured in our own country.)
You’re riding a bus (engineered in Germany) with a designer bag (manufactured in the US) and interacting with your friends using a smartphone (produced in JAPAN).
Now, answer these questions.
- How do you think you got access to such convenient options?
- Or how do you think such internationally produced and approved items reach your city?
The answer to these questions is simple. It reaches your city due to the vast amount of International Trading transpiring among various continents.
In fact, several other convenient services that we rely on daily (international banking facilities, intangible goods, mobile phone services, etc.) are procured through mutual and cordial international trade happening globally.
Why Do Global Nations Engage in International Trade?
After explaining the basics of International Trading, let’s focus on why global nations engage in foreign trade?
The answer is straightforward!
Nations engage in international trade to produce usable, value-added goods and products because they cannot produce or manufacture them within their territories. Moreover, nations cannot satiate the varying and evolving needs of consumers.
Field experts consider various production factors to be the chief reason. Different production factors create an economy (per suitability) and churn our useful services and products accordingly.
Those chief production factors include as follows –
- Labour force
- And Capital
Every nation bequeaths a vivid combination of production factors. While that does make them adept in producing and providing specific products and services, it also restricts them from expanding their niche offerings.
There is also the consideration of domestic production and demand for specific products and services.
Nations inept at churning out those products to meet domestic demand engage in mutually beneficial trade with other international nations and their markets.
The common term for such engagements is EXPORTATION.
Here’s a relatable example to help you understand better:
Sweden isn’t congenial to mass produce fruits. It lacks the proper land or labour force to produce fruits.
Contrasting to Sweden, Lebanon is a nation conducive to mass-producing fruits. And Lebanon may even be interested in trading with Sweden.
Similarly, Swedish grocery stores or fruit sellers would want to receive large fruit production routinely to satiate their consumer market. So, they’ll be willing to trade with Lebanon.
The common term for such engagements is IMPORTATION.
However, this is one simple example of International Trade between 2 nations. But foreign trade transpires between countless nations for many large-scale products and services.
Furthermore, in other instances, competition arises among nations similarly adept at mass-producing similar products and services.
This is another consequence of International Trade.
International Trade – Benefits, Importance & Examples of Norms & Regulations
Noteworthy Advantages of Intercontinental Trading –
- International trading leads to increased revenue yields.
- It causes reduced competition in other nations lacking the offered goods and products.
- It causes extended product demand in overseas markets and its customers.
- It allows Better cash flow management.
- It lessens risks of economic downturns, environmental occurrences and other determinants.
- It lets you take advantage of favorable currency exchange rates.
- It offers you additional outlets to trade off surplus goods (especially those items that can’t be sold in the native market)
Significance & Examples of International Trading Norms & Regulations
Why is International Trade Law Important?
- International Trade Law contributes to endorsing worldwide economic growth, progression, and expansion.
- Such rules and regulations ensure all trade engagements between nations are transparent and just.
- These lawful guidelines remove any inequity or discrimination between nations participating in foreign trade, thus creating healthy competition and more economic innovation and scalability.
- International Laws also eliminate any dispute possibility among foreign nations. It compels every nation to play by the rules without demeaning other nations or levying unnecessary trading barriers.
- It makes every nation equal in trading status and strives to unite every nation to create a globally connected economy.
Examples of International Trading Norms & Regulations
- NAFTA (The North-American Free Trade Agreement) –The agreement is between Mexico, US, and Canada. It came to be in 1994 and is among the largest trading treaties globally.
- WTO (The World Trade Organisation) –It came to be in 1995 and comprises 164 members.
- ICC (The International Chamber of Commerce) –The treaty came to be in 1919, and its HQ is in Paris, France.
- EU (The European Union) –The treaty comprises 27 European nations and came to be in 1993. It consists of an independent treaty between China and the US.
Are you interested in securing a career in foreign trading law? Don’t worry.
- You will require fluent language and communication skills to investigate foreign trade law and their arising disputes.
- Moreover, you will also require other skills like quality writing, comprehending finance and banking, negotiating, and even applying for intricate statutes.
- Finally, sound know-how in economics is also necessary since a lot of numeric data is involved.
Of course, before all that, you must pass your course on Trading Laws and secure good grades on your assignment paper. Consult our assignment helpers if you require additional assistance to make your writing endeavors hassle-free. We will ensure you secure the grades you sought from the start.