Regional Trade Agreements Effects on Global Trade
Discussion 1
There are issues for trades for trade that are affected by trade agreements. Trade agreements are responsible for shaping all the trade agreements in different firms worldwide. Trade agreements affect small trades where through a substantial reduction in international trade barriers. It also deals with foreign tariffs which are determined by trade agreements. Further, trade agreements help both small and big trades in securing access to foreign markets and trade blocs. It also helps nations in trading cohesive which increases trade I the region when compared to the outside region.
Trade agreement refers to tariffs and wide-ranging taxes which include investment guarantees and they exist when nations agree to help trade with one another. Some of the trade agreements include privileged and free skill kinds which aim at reducing tariffs and quotas. Trade agreements greatly impact trades in both positive and negative ways. My stand is that trade agreements impact trade positively.
Trade agreements help in the creation of favorable trading conditions since all the businesses in member nations have high incentives for trading in the new market. An example is the trade agreement between the US and Australia in 2005 which enables both nations in exporting and importing products without paying tariffs. Office of US trade representative shows that the united states exported over $18.9 billion goods worth to Australia in 200 which is a representation of a 33% increment of its trade from 2004 (Studnicka et al., 2019). Hence, trade agreements between nations lead to an increment in trade volumes between the involved nations. They also help in the creation of jobs since expanded markets led to increment in business performances. For instance, small businesses purchase raw materials from nations within their trade agreement with extra costs. It leads to creating new jobs since forms desire more personnel’s in supporting growing operations. As stated to USTR, in the United States, every $1 billion worth of exports leads to the creation of over 6000 new united states jobs.
Research indicates that trade agreements help in opening new markets for trade which increases competition increases forcing businesses to increases their quality. It then offers customers varieties of products and services (Studnicka et al., 2019). An example is in the case where the United States get in free trade arrangement with Cuba, then American cigar manufactures are forced in the generation of higher quality cigars if it wants to outsell and remain competitive in the market over the Cuban cigars.
In general, trade agreements help to boost the economic growth of member countries. Due to the increment in job opportunities, it reduces unemployment rates increasing regular incomes which helps in empowering the families. With the expansion of markets, it opens opportunities in the rising of new business enabling individuals in earning more revenue from their business tax. Moreover, trade agreements lead investment guarantees indicating that investors more so from the developed nations make investments in the developing nations where they have protection against any political risks.
Discussion 2
Walmart stores are one of the most interesting fortune 1000 companies. This is because it has stayed true to its purpose and is consistently tied to offering low everyday prices for the clients. Hence, it has built a strong customer base. It is interesting how customers walk into the Walmart stores knowing they will get low priced but high-quality products. Further, Walmart under its supply chain initiative named vendor managed inventory makes managements of all the products in their warehouses. This enables the stores in expecting a close to 100% demand fulfillment on the products (Stanley et al., 2017).
Risk factors associated with Walmart stores are presented through aggressive competition which is increasing every day for the company setting the bar standards very high. Another risk factor is the carrying of its businesses worldwide which is affected by factors like the barrier of long-term connection with clients and other restrictions on investments. Further, financing is a risk factor where Walmart can face challenges in expanding its manufacturing capabilities and acquiring technologies and repaying of debts.
The management strategy of Walmart stores is that it aims at addressing designs of the retail service through an emphasis on determinants like competence and cost-effectiveness. An example is through its cost leadership where Walmart is famous for its low prices. Hence, the management strategy is ensuring the maximization of the efficiency of the retail service personnel.
References
Studnicka, Z., Thierie, W., & Van Hove, J. (2019). The impact of regional trade agreements on European exports. International Economics and Economic Policy, 16(3), 467-488.
Stanley, B. C. M., & Securities, H. J. M. M. (2017). Wal-Mart Stores, Inc.