Monday, March 4, 2013

global business strategy

 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.