INTERNATIONAL BUSINESS

International Business

International Business

This paper presents answers to three questions related to the subject of international business.

Q1: Benefits and drawbacks for the country of Venezuela as a result of their membership in MERCOSUR?

Ans: The role of the Venezuela in South American integration, as the only world economic and political power, is so central that economists speak of a hub-and spoke relationship in the area, with the Venezuela the hub and as many spokes surrounding that hub as agree to the U.S. terms of economic engagement (Hufbauer, 2008).

The MERCOSUR also provides various provisions to enhance the flow of trade among the three countries. A trilateral trade commission was established to resolve disputes, to review and prevent dumping of products across national markets, and to establish procedures for a country to reinstate pre-MERCOSUR duties for a period up to 3 years, on a one-time only basis, if domestic industries were injured as a result of an import surge from another MERCOSUR country (Hufbauer, 2008).

Q2: Benefits and drawbacks for your business as a result of their membership in MERCOSUR

Ans: The firm, of which I am an employee, is engaged in import and export business of edible goods. MERCOSUR has liberalized trade in a variety of ways for Venezuela. Tariffs were either eliminated immediately or phased out over periods of up to 15 years. Limits on investments were removed, and investors from any of the three countries were treated equally, currency was freely transferred at market rates, and performance requirements such as maintaining export levels and trade balancing were eliminated. Trade in services was liberalized and equal treatment was expected for service providers and professionals in each country (Hufbauer, 2008).

Critics of MERCOSUR in the United States, both on the left and right, cite the widening trade deficits with Canada and Mexico as indications of ...