International Business and the European Union



International Business and the European Union

Introduction

There are a number of developments in the key areas of the world trade and investment patterns. It mainly depends on various factors such as national and international economy and political conditions. European Union provides various solutions for the problems in the International trade and economy.

Discussion

Key Arguments Surrounding World Trade and Investment Patterns

There are various arguments for the trends and patterns in the world trade and investments. Some of these major arguments described as follows.

Distributional Considerations

It is one of the major argument which deals with the distribution of the investments and potential gains associated with it. It also argues about the investment in the FDI and also involves host countries in providing incentives (www.wto.org). Investment also affects the growth patterns and it resulted in the progress of the economy.

Knowledge Considerations

According to the world trade organization (WTO), there is one argument which is positive for the government incentives associated with the FDI project. According to this argument accurate knowledge for the FDI incentives is also very important. In case of bidding for the FDI incentives there are various problems associated with it (www.wto.org). One of the main concerns is that actual value cannot be known and this also results in loss for the winner host country (www.wto.org).

Argument for the political economy

This argument for the pattern of WTO provides that the exceeded in the incentives and benefits of FDI are also very important. It also assists an economy to boost and thus, results in the political strengthening. There is also an important concern associated with it that, it results in loss for the other economy. In this way there are problems with the political and economic conditions (www.wto.org). Growth and Continuity

This ensures that the increase in the investment and incentives also results in the growth and development of an economy. One major concern is that it depends on the stability of the international economy and not with the situation in which one economy boost and other suffers (www.wto.org).

Intra-Firm Trade

Intra firm trade is also n important pattern for the world trade system. It generally deals with the better conditions of the international markets. In this way FDI and incentives play a major role in the increase in the options for the international trade and investment pattern (www.wto.org). International trade is the most important factor for the growth of the investment system.

Significance of Exchange Rates and Exchange Rate Policies upon International Business Transactions

All international business transactions depend on the exchange rate and exchange rate policies. It also assists in defining the economic condition of the country's economy and trade conditions. It also serves as the measure for the monetary value of a country. One of the most important and significant effect is that it defines the rate for the trade in the international market. Without exchange rate or policies of exchange it is not possible to trade in the international economy.

Defining Buying and Selling Rate

It is one ...