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Describe the Mechanisms That Regulate the Trade: in the Netherlands and Australia

In: Business and Management

Submitted By elisebells
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Economic activities that encourage/restrict international trade

Free trade
Free trade is a policy by which a government does not discriminate against imports or interfere with exports by applying tariffs (to imports) or subsidies (to exports) or quotas. According to the law of comparative advantage, the policy permits trading partners mutual gains from trade of goods and services.
Under a WTO treaty signed by 124 nations in 1995, tariffs are being systematically cut by an average of 40 percent during a fixed timeframe.

The concept of free trade is an interrelated factor to the aspect of globalization. Therefore, quite obviously, it is also one of the most controversial topics of 20th and 21st centuries focusing on economical, societal and moral issues and its impact in upcoming times both in positive and negative frameworks.

Economics of scales
The increase in efficiency of production as the number of goods being produced increases

Barriers to trade
Trade barriers are government-induced restrictions on international trade.The barriers can take many forms, including the following:
• Tariffs
• Non-tariff barriers to trade
• Import licenses
• Export licenses
• Import quotas
• Subsidies
• Voluntary Export Restraints
• Local content requirements
• Embargo
• Currency devaluation
• Trade restriction
Most trade barriers work on the same principle: the imposition of some sort of cost on trade that raises the price of the traded products. If two or more nations repeatedly use trade barriers against each other, then a trade war results.

Economic alliances
Both the Netherlands and Australia are part of this alliance.
IEA(International Economic Alliance) is a non-partisan, independent non-profit organization conceived at Harvard University in 2004 and based in Cambridge, MA. IEA’s mission is dedicated to furthering global trade, development,…...

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