Key Term and Why You Are Interested in It
The theme that I select is Government Action that Promotes Global Trade. Governments want to improve the way of life of their citizens for this reason comes the trade of goods and services. There are options to promote cross-border trade; these include special government agencies, subsidies, export financing assistance, and foreign trade zone (Satterlee, 2018). I found this topic interesting because it is essential to know how the exchanges of goods and services are handled. How this can benefit and affect a government if it does not do its job well. See how each promotion option is different and how it is used to grow an economy. Another aspect that I found interesting is that the public and private sectors can create different promotions by collaborating.(Daniel Riordan, 2019)
Explanation of the Key Term
Several actions help promote trade. However, we will discuss four; special government agencies, subsidies, export financing assistance, and foreign trade zone. Further, we will talk about how private and public sector collaboration can promote trade. Most countries had created regulations for global trade monitoring. The US created the International Trade Administration to stimulate economic opportunities. Hence, most states have made special government agents do business with companies overseas (Satterlee, 2018). Subsidies are privileges offered by the government to attract companies to a region or provide them with the funds to operate successfully. Export financing differs from commercial lending, mortgage lending, or insure; this isn’t very easy to have because you must be reliable and creditworthy. To promote US trade, let its citizens have a free-trade system with other countries. The foreign Trade Zone is a program that alleviates individual costs of what is free-trade (Satterlee, 2018).
Major Article Summary
The World Trade Organization (WTO) was created in 1995 by several countries to monitor global trade. Then the U.S. developed the International Trade Administration (ITA) for stimulating economic opportunities for the State. Further comes the special government agencies that help constituent companies to do business overseas (Satterlee, 2018). Then come the subsidies; they are privileges offered by the government to attract companies to a region or provide them with the funds to operate successfully. These privileges can be that the government can provide tax breaks, lower the cost of lands, or offer money-savings techniques (Satterlee, 2018). There is also the WTO Subsidies Agreement; this one is defined as a “financial contribution” by a government that provides a benefit (Trade Guide: WTO Subsidies). Export financing differs from commercial lending, mortgage lending, or insure; this isn’t very easy to have because you must be reliable and creditworthy. The Export-Import Bank is the U.S. official credit agency. It is an essential tool for small businesses because it doesn’t have a minimum transaction limit. The U.S. lets people have free-trade with other countries, but this is usually quite expensive. For this reason, the program Foreign Trade Zone was made to help with the costs of the free-trade (Satterlee, 2018).
The article I focused on was Public/Private Sector Collaboration Can Promote Trade Growth (Daniel Riordan, 2019). I found this very interesting how, despite the fact that in mid-2018, tensions rose between the main trading partners, adding uncertainty to future conditions, Riordan thought it was worth taking the risk and looked for ways to do it. And he believes that both the government and private companies should prioritize trade while mitigating the downside risks that can affect growth. Talking about the three steps that can make a change. Collaboration is something that both sectors (public and private) must consider. Sometimes, both are in debt or have a system of corruption in their employees, and collaboration can improve them. With the combination of good characters on both sides, great things can be achieved, the private sector often has the technology and the innovation, and the private sector generally has a deep understanding of local market dynamics and local or regional culture. Taking risks usually pays off, but it’s essential to protect yourself when doing this. Development projects require a clear understanding of risks and an effective way to mitigate damages and losses. Managing risks should protect the invested values; sometimes, the credit is just as crucial as the interested parties. Navigating uncertainty, mitigating risk, and protecting value is vital to sustaining trade growth and supporting innovation.
1- Collaboration, joining forces between public and private companies can have a more significant impact than any attempt to do so separately.
2-Taking strategic risks mean that sometimes you take an investment that has low risk and has little profit. In contrast, an investment with a higher risk often provides the opportunity to obtain higher returns.
3- Protection, commercial credit, and political risk insurance offer the public and private sector methods to analyze and visualize risks; in a certain way, this promotes trade growth.
International Trade Administration: US Exports to Morocco More Than Triple in Ten Years Since US-Morocco FTA. (2016, August 27). Entertainment Close-up. https://link.gale.com/apps/doc/A461672243/BIC?u=vic_liberty&sid=BIC&xid=676edfd7
Global Markets. International Trade Administration | Trade.gov. (2020). Retrieved 13 November 2020, from https://www.trade.gov/global-markets.
Riordan, D. (2019). Public/Private Sector Collaboration Can Promote Trade Growth. Global Policy, 10(3), 443-444. https://doi.org/10.1111/1758-5899.12716
Satterlee, B. C.(2018). Cross Border commerce.SI-CORP
Seyoum, B., & Ramirez, J. (2012). Foreign trade zones in the United States. Journal Of Economic Studies, 39(1), 13-30. https://doi.org/10.1108/01443581211192080
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