International Trade Market
By admin On May 19th, 2011
The Director-General of the Four Company X is concerned about the implications for the issues listed below. As a lawyer, I was asked to address the problems in terms of research and analysis of the principles of GATT / WTO and structure. My goal is to advise the company X Four of the measures the country Fargo may have against the country of Narnia under GATT and WTO, in particular, where you can challenge the proposed tax.
I think the company is questionable tax Designer Four X, because it was introduced in contradiction with the theories of international trade. Moreover, the government of the country of Narnia has no sovereignty to impose tax on imported goods, and I know with similar products produced domestically.
In this article I will discuss the concepts of international trade and the implications of relevant legislation to find the appropriate decision, which could help the company Four X to solve the problem.
Trade Theories
Other theories of comparative advantage have been proposed to explain why the trade of nations. Over the past 20 years, a new theory of trade has been touted by economists. The new position is known as the theory of increasing returns. This term is an abbreviation of “increasing returns to scale” and is synonymous with “economies of scale.” 1 This theory holds that trade happens to take advantage of economies of scale. Industries in both countries in trade in lower unit costs of high volume production and dissemination of high costs of the total volume produced. If countries do not trade with each other and relied on domestic markets, may not be able to reach the highest level of economies of scale. International trade will result in volume, resulting in greater economies of scale.
