Submitted_MBA6601_International Business_Unit VI_submitted.doc - Running Head TRADE AGREEMENT AND BAILOUTS 1 Trade Agreement and Bailouts Columbia

Submitted_MBA6601_International Business_Unit VI_submitted.doc

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Running Head: TRADE AGREEMENT AND BAILOUTS 1 Trade Agreement and Bailouts Columbia Southern University March 2020
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TRADE AGREEMENT AND BAILOUTS 2 Part One Bilateral Trade Agreement Bilateral trade agreement refers to trading between two nations by giving each other access to other’s market. With bilateral trade agreement, the two countries will reduce or eliminate import quotas, tariff or any trade barriers to promote trade from other country into their country. Bilateral trade agreement can bring many advantages to participating countries. However, there are other issues that may cause disadvantages to the countries that make them consider before making decision to join bilateral trade agreement. In the situation when bilateral trade agreement helps increase trade for China and South Korea, the U.S also has advantages in continuing the bilateral trade relationship. In the first place, bilateral trade agreement allows a greater volume of trade to the U.S which helps increase the economic growth. In addition, greater volume of goods exported to the U.S by those countries helps balance the goods price and offer many choices for American customers. This also promotes relationship between China, South Korea and the U.S in terms of politic and economy while still helps the U.S to have impact on those countries. The relationship also create opportunities for the three countries to integrate and standardize their production procedure and labor standard. Furthermore, the bilateral with greater goods amount exported to the U.S will create a competitive business environment. This requires that the U.S producers increase their efficiency and productivity in order to reduce the product cost to remain competitive enough with products coming from China and South Korea. On the other hand, bilateral will create a more competitive environment to the U.S companies. In case competitors in foreign country are very strong and powerful, it will likely
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TRADE AGREEMENT AND BAILOUTS 3 create difficulties for the U.S companies. In addition, with the advantages that bilateral trade agreement brings to two countries, it will likely trigger the bilateral of other countries. To some extent, this takes away the advantages that bilateral agreement has brought to the two countries and create a competition between many different countries. Furthermore, firms will lose their pricing advantage as tariffs are removed. This will lead to situation when U.S domestic companies go out of their business and have to reduce number of staff which led to an increase of unemployment in the U.S. Trade Agreement The European Union ( EU ) was established in 1951 with only six members including Belgium, Germany, France, Italy, Luxembourg and Netherlands. Upon the time, the number of members increased to 28 and just now decreased to 27 as the United Kingdom just left the union early 2020. The EU is the greatest achievements of European countries in which it creates no internal border between countries within the union. People can go from country to country in the
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