Please check my essay for IELTS.How could I improve?I need 7 in ielts writing.
Question: some peole think that the main benefit of global cooperation is in the protection of environment but othes believe the main benefit is in world business.Discuss the both views and give your opinion.
In this globalization era, the world seems like a global village where international cooperation is urgently needed to deal with some crucial issues like starvation, poverty, environmental damage, economical crisis. Although which sector is benefited more by global cooperation has been a debated issue, some people argued that environmental protection has been received more profit than others. However, I believe that international trade are benefitted more by global collaboration.
It is obviously true that environmental damage and its protection is one of the most prioritised issues throughout the world. World leaders now have realized and agreed to work together to prevent the fatal consequences of environmental damage. For example Kyoto protocol was signed and ratified by 191 countries to work together to halt the progression of climate change. They were committed for reduction of greenhouse gas emission by 5.2%.Some countries now work harder to reduce the emission of green house gas from industries, vehicles by introducing strict rules and regulation. Worldwide the efforts against deforestation have been taken which is identified as one of the major signification cause of climate change. Developed countries now donate a huge amount of money to the developing nations who are more often vulnerable to climate change effects.
On the other hand, global cooperation contributes a lot to develop global trade. Free trade between countries increases now which causes the availability of product internationally and promote competition. For instance American i pod or iphone now in the pocket of almost everyone. Moreover it is claimed that multinational companies and industries move to low wages developing countries.Therefore creating a lot of job opportunities for the people of that regions.
In conclusion, by working together whole world have done a lot for world commerce and environmental protection but still couldn't achieve the target or halt the progression of climate change. Steps taken by international cooperation are not only insufficient but also non benefited for environmental protection.
it is a good work, however it need some work on it
first, in your introduction is better give your reason about what is more beneficial, if it really is. regarding to your opinion, which had effect on global trade or "why the international trade are benefitted more rather than environmental issues, by global collaboration?".
according to your two following paragraphs I think it would better to put your opinion like that, you think both of them were beneficials, as your examples show later.
the rest is very good, you explained both aspects and gave examples.
The conclusion should be a sum up of all your writing in 2-3 sentences, without adding a further or new reasons. find out if you did that in your conclusion?
keep on try and do not forgot to keep the tract of the time.
If you walk into a supermarket and are able to buy South American bananas, Brazilian coffee and a bottle of South African wine, you are experiencing the effects of international trade.
International trade allows us to expand our markets for both goods and services that otherwise may not have been available to us. It is the reason why you can pick between a Japanese, German or American car. As a result of international trade, the market contains greater competition and therefore more competitive prices, which brings a cheaper product home to the consumer.
What Is International Trade?
International trade is the exchange of goods and services between countries. This type of trade gives rise to a world economy, in which prices, or supply and demand. affect and are affected by global events. Political change in Asia, for example, could result in an increase in the cost of labor. thereby increasing the manufacturing costs for an American sneaker company based in Malaysia, which would then result in an increase in the price that you have to pay to buy the tennis shoes at your local mall. A decrease in the cost of labor, on the other hand, would result in you having to pay less for your new shoes.
Trading globally gives consumers and countries the opportunity to be exposed to goods and services not available in their own countries. Almost every kind of product can be found on the international market: food, clothes, spare parts, oil, jewelry, wine, stocks, currencies and water. Services are also traded: tourism, banking, consulting and transportation. A product that is sold to the global market is an export. and a product that is bought from the global market is an import. Imports and exports are accounted for in a country's current account in the balance of payments .
Increased Efficiency of Trading Globally
Global trade allows wealthy countries to use their resources - whether labor, technology or capital - more efficiently. Because countries are endowed with different assets and natural resources (land, labor, capital and technology), some countries may produce the same good more efficiently and therefore sell it more cheaply than other countries. If a country cannot efficiently produce an item, it can obtain the item by trading with another country that can. This is known as specialization in international trade.
Let's take a simple example. Country A and Country B both produce cotton sweaters and wine. Country A produces 10 sweaters and six bottles of wine a year while Country B produces six sweaters and 10 bottles of wine a year. Both can produce a total of 16 units. Country A, however, takes three hours to produce the 10 sweaters and two hours to produce the six bottles of wine (total of five hours). Country B, on the other hand, takes one hour to produce 10 sweaters and three hours to produce six bottles of wine (total of four hours).
But these two countries realize that they could produce more by focusing on those products with which they have a comparative advantage. Country A then begins to produce only wine and Country B produces only cotton sweaters. Each country can now create a specialized output of 20 units per year and trade equal proportions of both products. As such, each country now has access to 20 units of both products.
We can see then that for both countries, the opportunity cost of producing both products is greater than the cost of specializing. More specifically, for each country, the opportunity cost of producing 16 units of both sweaters and wine is 20 units of both products (after trading). Specialization reduces their opportunity cost and therefore maximizes their efficiency in acquiring the goods they need. With the greater supply, the price of each product would decrease, thus giving an advantage to the end consumer as well.
Note that, in the example above, Country B could produce both wine and cotton more efficiently than Country A (less time). This is called an absolute advantage. and Country B may have it because of a higher level of technology. However, according to the international trade theory, even if a country has an absolute advantage over another, it can still benefit from specialization.
Other Possible Benefits of Trading Globally
International trade not only results in increased efficiency but also allows countries to participate in a global economy, encouraging the opportunity of foreign direct investment (FDI), which is the amount of money that individuals invest into foreign companies and other assets. In theory, economies can therefore grow more efficiently and can more easily become competitive economic participants.
For the receiving government, FDI is a means by which foreign currency and expertise can enter the country. These raise employment levels, and, theoretically, lead to a growth in the gross domestic product. For the investor, FDI offers company expansion and growth, which means higher revenues .
Free Trade Vs. Protectionism
As with other theories, there are opposing views. International trade has two contrasting views regarding the level of control placed on trade: free trade and protectionism. Free trade is the simpler of the two theories: a laissez-faire approach, with no restrictions on trade. The main idea is that supply and demand factors, operating on a global scale, will ensure that production happens efficiently. Therefore, nothing needs to be done to protect or promote trade and growth, because market forces will do so automatically.
In contrast, protectionism holds that regulation of international trade is important to ensure that markets function properly. Advocates of this theory believe that market inefficiencies may hamper the benefits of international trade and they aim to guide the market accordingly. Protectionism exists in many different forms, but the most common are tariffs. subsidies and quotas. These strategies attempt to correct any inefficiency in the international market.
The Bottom Line
As it opens up the opportunity for specialization and therefore more efficient use of resources, international trade has the potential to maximize a country's capacity to produce and acquire goods. Opponents of global free trade have argued, however, that international trade still allows for inefficiencies that leave developing nations compromised. What is certain is that the global economy is in a state of continual change, and, as it develops, so too must all of its participants.
An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed.
A holding of an asset in a portfolio. A portfolio investment is made with the expectation of earning a return on it. This.
A ratio developed by Jack Treynor that measures returns earned in excess of that which could have been earned on a riskless.
The repurchase of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies.
A tax refund is a refund on taxes paid to an individual or household when the actual tax liability is less than the amount.
The monetary value of all the finished goods and services produced within a country's borders in a specific time period.
Published: 23rd March, 2015 Last Edited: 23rd March, 2015
This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.Introduction:
This module gives detail information of international trade and the sub theories consisting of assumption and limitations of each. It is about a brief discussion of implication of sub theories in virtual market at international level. Its is an detailed discussion of comparative advantage with the example of two countries i.e. China and United States. International trade theory explains varied ideas of goods and services of imports and exports around global boundaries. It deals with several modules of International Trade. This theory aims to expand its gains from trade for the parties involved in exchange of goods and services. It is similar to domestic trade but the cost and production splits international trade from domestic trade. Huge amount of share comes in trade which adds to total revenue. This theory also deals with confronts of laws, rules and several other issues before international trade. There are two theories in International Trade i.e. Traditional Theory which is also called Classical theory and Modern Theory. There were certain implications in Traditional Approach for instance this trade must have greatest differences within the countries. This theory also initiates to specialized goods in production of what they import. The emphasis is more on endowment in differences to other country in International Trade. Traditional trade theory enables investments throughout the glob i.e. from rich to the scarce country. Primarily International trade enables international investment. There is several direct investment of FDI from developed countries to developing countries. This theory features the diversity in comparative advantage in aspect of endowments. This theory also enables to present more realistic factor such as labor and capital. Modern theory has understood the general term of equilibrium theory of value wherein the old, traditional method failed to understand these values.BENEFITS OF INTERNATIONAL TRADES:-
International trade will help in increasing the domestic antagonism of the country.
International trade technology is advance and can be useful to the countries.
International trade definitely helps in increasing the sales and the profits of the country.
International trade helps in improving the potential of the sales of the existing goods.
Cost competition in the domestic market will be maintained due to international trades.
International trade helps any business to expand domestically and in another country internationally.
Global market share of the business will be improved by the improvement of share price.
Domestic business will not be dependent on existing markets.(economywatch, 2010)Theories of International Trade:
There are two main theories in International trade i.e. Classical theory and New trade theory, there are several sub theories in this concept which is explained below:Classical Trade Theory:
Classical theory is more concerned on event of trade. It attributes the differentiation in comparative advantage theory of productive commodity of 2 countries to the variation in manufacturing proficiency in particular country of workers which focuses on single value prices and ignores factor price variation. There are certain sub theories in this concept which are discussed as followed. (Sinha, n.d.)Comparative Advantage Theory:
Comparison of relative price differences between nations enlightens the trade pattern. International trade pattern is determined by comparative advantage. The reasons and benefits of this theory are attributed to the differences within several countries relative to opportunity costs. This theory is beneficial in term s of production i.e. advantage of trade even if the partner has superior production. (Aswathappa, 2010)Assumptions of Comparative Advantage Theory:
In this theory production is considered for the law of stable return.
Labor is given more consideration for the factor of production and cost of production includes only labor cost.
It is assumed that factor of production are mobile in country but is static within several other countries. (Karim, 2010)Limitation of comparative Advantage theory:
The benefits of trade can be enjoyed by only few workers due to different nature and structure of the trade.
Worker with same skill get paid in variations in different sectors. The consequences for welfare will be negative in this type of economy. (Bihari, 2009)Mercantilist Theory:
In this theory exports are been more emphasis and import is completely been avoided. After the exports are done payment is received in gold form. This theory ignores the fact that in some cases goods are to be imported which is an import factor from the trade point of view. This theory came under high use due to group of economist who eventually came to known as classical school of economics. Here wages are low in order to persuade the policies. Government control is high with particular policies in order to maximize trade surplus. It claims that strength of economies is directly linked to the upholding of a positiveÂ balance of trade. (Sarich, n.d.)Assumptions of Mercantilist Theory:
There is fixed amount of wealth in the world.
On the cost of other country any nation can grow rich only.
Therefore nations should export more than import so nation can try of creating a balance of trade that happens. (Dr. Good, n.d.)Limitation of Mercantilist Theory:
It excludes the factor of imports.
It puzzles the attainment of wealth with the acquisition of capital.Absolute Advantage Theory:
The name itself indicates that this theory gives more importance in producing what the country is best in i.e. things they have absolute advantage. Based on every countries product advantage incentives are been provided in this trade. In reality it is not realistic and is not common way used in this trade. Here trade is possible only if two countries have advantage in producing the second good. The absolute advantage would be considered only if goods are produced with less resources then other country. (Peng, 2010)Assumption of Absolute Theory:
This theory assumes that there is no cost other than labor cost.
It also assumes that there are only two countries and two commodities involved in trade.
It assumes that efficiency is always productive and it considered being country goal.
Assumption of single currency therefore exchange rate is eliminated.
Every factor of production is completely employed.
On free trade no government restriction is implied.
In compact units of production units are divisible. (Aswathappa, 2010)Limitation of Absolute Theory:
This theory assumes that there is transportation cost.
It is assumed that efficiency of product is given more importance.
This theory ignores the fact that the trade is internationally mobile.
This theory does not take opportunity cost into consideration. (Aswathappa, 2010)Factor Endowment Theory:
The factor of endowment suggest that country must produce resources which it naturally posses in large quantity. Here the country exports goods and services which is rigorously absolute profuse factor and import products that use intensively to its scarce factors. This theory explain trade pattern quite well, but current situation indicates that now a dayâ€™s industries are becoming more familiar in term of endowments. The research indicates that endowment contract in international trade will gradually will become less relevant.Import and export to promote International Trade:
There are several theories mentioned in International Trade i.e. absolute advantage, comparative advantage, mercantilist theory, endowment factor etc which explains international trade effectively. All these theories have different assumptions and limitations which differ according to the situation. These theories enable to explain why a country produces particular goods and service for exports. It also tells about comparative advantage of several countries. It is identified that there is distinction between traditional theory and recent theory. These theories have played vital role in economic development. If considered China the export rate has gradually increased over the period of time and import seems to fall. The GDP of China in the year 2011 was 9.2% exports where 9.3% and import were 9.7%. In 2011 the GDP of U.S was 1.7%, export was 7.2% and imports were 3.2%. There are several arguments on these theories based on security, infant industry and so on. There are also several barriers in exportation, apparent hurdles to exports to all country reflect the filtered vision individual decision in market. Most of the countries differ in language, culture, policies, and ideas and so on. All these factors affect the norms of government and introduce many new elements into the conduct of several theories. International trade has grown rapidly it observes acute growth of interdependency in financial matter within the countries. Firms focus in producing particular goods this enables economies of scale consumed by domestic population is been exported by the host country. There are several advantages of these theories, which relates to the protective division. This theory enables to utilize the resources efficiently. Equality of product at factor commodity is possible with the implication of several theories. (Sloman, and Garrat, 2010)Protectionism in International Trade:
Protectionism concept in trade is formed to protect the interest of the parties involved in trade. It helps the firm to protect themselves from exploitation. It is believed that Industries would not even enter into the market where manufacturing have developed to compete in global market if subsidies and liberalization is not provided to these firms. (Amadeo, 2012)Advantages of Protectionism in International Trade:
It protects the trade through government subsidies to industries with tax credits or even direct payments.
One of the major effective benefits is imposing quotas for imports.
It enables to control the price which makes exports cheaper and this helps the firm to stay ahead compete with other countries.
It also creates job opportunity in domestic country which adds to the economy of particular company. (Amadeo, 2012)
Protectionism will reduce the dumping from foreign countries. These countries sell their goods at lowest possible price lower than the costs of production.
Protectionism helps the well developed organization to work and develop at proper rate reason being these organizations are not pressurized by more developed organizations. New firm will take their time to develop properly resulting in good domestic economy for future.
Protectionism will help strengthening the domestic economy by increasing employment and people will spend more if they have income which will create good flow of economy. (Ronquillo, 2009)Disadvantages:
Mounting protectionism would lead to decrease in economic growth and will lead to more layoffs.
Protectionism averts the countries from increasing their specialization level because of the inefficient production of factors used.
Retribution reaction is caused due to protectionism which is ruining the relationship of the two trading countries.(ronquillo, 2009)Analysis of export and import with the help of comparative advantage in China and U.S:
Based in relativity the comparative advantage is done, it is an important concept all over the world therefore countries are more concerned on producing efficient products. Exports and import in different countries have different applications in several factors for instance rules, regulations, policies etc. China has superior integrated production network in the glob. It is observed that there is rapid growth in exports of goods by the mean of efficiency. Improved quality of the exported goods has created competition in the market which leads other countries to contraction to manufacturing sector in several other countries. The extensive margin of China is observed to be less strong than other developing countries. It was due to overlapping of goods with other developed countries. This theory is considered to be most important but there are certain drawbacks of this theory for instance it misunderstood in terms of assessment. They also consider this theory as absolute advantage. (Morrison, 2012)Comparative Advantage in China:
China has the benefit of a comparative advantage in economical educated laborers. It is assumed that this advantage will be enjoyed by this country at list for next two decades. High quality and cheap labor will help the country to increase its growth rate and maintain economy (Beijing time, 2002).Comparative advantage in United States:
U.S enjoys comparative advantage in service sector; domestic market of this particular country is well developed industries. The net export balance is also increasing and this reflected in their total share. In addition this country also has comparative advantage in financial asset (Chinaglobaltrade.com, n.d.).Conclusion:
International trade theory gives detailed information of the current market situation. The increasing growth rate of developing countries is a clear indication of success for operating trade at global level. The limitation of each sub theories enables to know the impacts on economy. Analysis of comparative enables to know the comparative advantage of a country in term of goods.
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