global business
Global financing operations include
the elements of accounting, financial planning and financial analysis, investor
relations and financial compliance (Carbaugh.
1995). The financial and accounting procedures of countries involves the
elements of import and export trade. When international trade takes place, some
measures has to be taken to control the flow of goods and these measures are
imposed inform of tariffs. According to(Carbaugh
1995). A tariff is a tax levied on imported goods upon arrival at the port.
Tariffs are implemented by the government for the purpose of earning revenue
and the most importantly they help improve the economic performance of domestic
industries by reducing the level of foreign competition.
Some of the measures used in global
financing include non-tariff barriers to trade which is aimed at reducing the
amount of goods that a country imports (Cross, 1996). They are aimed at
reducing the process of a country dumping its produce to another and also to
reduce the issue of countervailing. Most countries have adopted the use of
non-tariff barriers to trade in their quest for financial freedom and have
since then applied non-tariff barriers to trade in different forms most
commonly applicable modes of application being technical barriers to trade,
direct government intervention and the precautionary principle and sanitary and
phytosanitary barriers to trade.
The government has standards and
measures that it applies in controlling imports and protecting domestic
industries which is achieved by establishing the conditions of production which
must be met for the good enter into the market (Carbaugh). He also confirms
that most developing countries have imposed required domestic contents and hence
they are used to substitute imports.
Another method adopted to bar trade
is the use technical barriers to trade which involves a country devising its
own technical guidelines for the products it needs from other countries
which may include packaging, weights,
product labeling and other dimensions(Cross 1996). The application of these
guidelines limits the number of countries that will be willing to participate
in trade with the country that imposes these conditions.
Greater
concern for the future through precautionary planning can also act as a major
use of trade barrier by the government. This may happen in a case where the
government restricts trade based on environmental or health conditions
(O’Riordan and Cameron). In this view, the government restricts some
importation which it considers to be harmful and is capable of causing health
and environmental hazards.
In
conclusion, it’s worth noting that global financing can be a very risky venture
and managing it therefore spells out many challenges .According to (Carbaugh)
imposing the trade barriers highly affects the profit level of home companies
and can result into eventual closure because of constant operation losses hence
there is need to plan before imposing. Carbaugh continues to add that to protect
consumers and the environment tariffs must be imposed on imports and exports.
In addition, special policies must be enacted to ensure that when imposing a
trade barrier, the consumers should be negatively affected by bearing the
burden.
References
Carbaugh,
Robert J (1995). International Economics. South-Western: Southern Press
Cross, Frank
B (1996).Paradoxical Perils of the Precautionary
Principle
(Revision
851).Washington, DC: Lee Home Publication
O’Riordan,
Tim and James Cameron (1994) Interpreting
the Precautionary Principle.
New York,
NY: Earthscan Publications, Ltd.
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