INTERNATIONAL TRADE

The Impact of International Trade at Singapore

[Name of the Institute]

Introduction3

Free Trade3

Reason for Objection to Free Trade the Rule of International Organizations5

Short-Term Structural Unemployment5

Dependency on Global Markets and Increased Economic Instability5

Significant Rise in Environmental Related Problems6

Difficulties in the Establishment of Industries6

Inequality in International Markets6

Free Trade and Less Developed World7

BHP Billiton in Singapore7

Positive Impact of Control on Trade on BHP Billiton9

Enhanced Value in Supply Chain9

Effective Risk Management9

Fair Competition Policy10

Intellectual Property10

Less Import Restrictions and Tariffs10

Export Taxes11

Negative Impact of Control on Trade11

High Taxes on Import of Certain Products11

Competition Policy12

Theory Concept and Relevant Case Study12

Conclusion15

References16

The Impact of International Trade at Singapore

Introduction

The overall growth of the economy has remained the principal priority for government and people across the globe. To attain economic growth, the state tends to promote free trade, also referred to as trade openness. Singapore is among countries that have continually pursued Free Trade Agreements (FTAs) with its key trading partners, with an aim to advance the global free trade (Tan, C. J. K. 2012). In order to ensure effective cross-border trade, Singapore has significantly reduced import tariff rates, eased the investment rules and improved the intellectual property regulations. Currently, Singapore has 18 FTAs with approximately 24 trading partners (MFA, 2012).

By considering the value of free trade in today's competitive business landscape in Singapore, the validity of the objections to free trade along with the role of international organizations has been analyzed. In addition, the essay also highlights the positive and negative impact of free trade on international businesses operating in Singapore.

Free Trade

A process through which the state of a country eliminates its artificial control on international trade (i.e. tariffs, quotas etc) is considered as free trade (Lee, M. 2012). The elimination of artificial control leads to the elimination of differences between international trade and domestic trade. This suggests that free trade is the continuous movement of goods among the trading partners with no particular restrictions and barriers imposed by the state (GoS, 2008).

A country that specializes in the production of particular goods must trade its surpluses against those goods that cannot be produced cost-efficiently within the limits. This is the basic principle of free trade (Smith, A. 2008).

On the other hand, Sinha, A. (2010) defines free trade as a condition in which the restrictions imposed by the state is at its minimal level with almost complete absence of tariffs, exchanges restrictions, quotas etc (Bhagwati, J. 2002). Similarly, Dictionary defines free trade as an exchange of goods and services without the barriers that are frequently imposed by the government. This reflects that the free trade policy provides the international companies with a protective environment to establish and operate within the limits of a country. This is done primarily to improve and improve the economic growth of a country. Therefore, the idea of free trade is often considered as a win-win situation for both countries. For the government, free trade provides the country with an ability to improve its competitive advantage. On the other hand, international organizations are provided with protection from the restrictions ...