Lecture 4 Oppurtunities & Obstacles

Oppurtunites & Obstacles

Introduction

Imagine the world economy is like a giant marketplace where countries trade goods and services, like food, technology, and clothes. Some countries are really good at making certain things, while others might have different strengths. However, sometimes these countries face problems when trading, or they don’t agree on how to solve big global issues like poverty, pollution, or fairness in business.

The United Nations (UN) is like a big global meeting where countries get together to make sure the marketplace works well for everyone. 

The UN helps with the global economy in different ways:

1. Creating Fair Trade Rules
2.  Helping Poorer Countries Grow
3. Preventing Economic Crises
4. Promoting Sustainable Development
5. Encouraging Cooperation

What is the WTO? 

The WTO stands for the World Trade Organization. It’s an international organization that helps countries trade with each other more smoothly and fairly

How Can the WTO Help a Company Globalize?

When a company wants to expand its business to other countries (globalize), it often faces challenges like different laws, taxes, or rules in each country.  The WTO can help by:

• Making Trade Rules Clear and Fair
• Reducing Barriers
• Resolving Trade Disputes
• Encouraging Free Trade

Capitalist country/Communist country

Capitalism is about people or businesses owning things and making their own decisions, with less government control. People can become rich or poor depending on how successful they are.

Communism is about the government controlling most things and trying to make sure everyone gets the same amount, so there's less difference between the rich and the poor

What Are Import Duties?

An import duty is a tax or fee that a country charges when goods are brought into the country from another place. It’s like a cost for bringing something from one country into your country.

Why Do Countries Charge Import Duties?

To Protect Local Businesses: If a country has a lot of its own toy companies, the government might want to make foreign toys a bit more expensive so people might choose to buy toys made in their own country instead. This helps local businesses stay strong.

To Raise Money for the Government: The government uses the money from import duties to help pay for things like schools, roads, and hospitals.

People in Europe are worried about trade under Trump’s presidency because of:

• America First: Trump wanted to prioritize U.S. interests, which could lead to less cooperation with Europe.
• Tariffs: Higher taxes on European products in the U.S. could hurt businesses and make things more expensive.
• Unpredictability: Trump’s decisions were often unexpected, making it hard for businesses to plan.
• Populism: A focus on nationalism might make international trade harder and less fair.

Deterioration of terms of trade

Deterioration means something is getting worse. So, when we talk about the deterioration of terms of trade, we mean that a country is getting less value for what it exports, or it's having to trade more of its goods to get the same amount of something else

A lawsuit

A lawsuit happens when someone believes that another person or company has done something wrong (like breaking a law or not keeping a promise), and they decide to take the matter to court to get it fixed

An international partnership

Two or more countries or companies from different places in the world agree to work together for mutual benefits.

Let’s say you and a friend in another country both like making cool t-shirts. You both agree that you'll design the t-shirts, and they’ll help sell them in their country. You both work together and share the money made from selling the t-shirts.

This is an international partnership. It's like teamwork, but between countries or companies, and they agree to share resources, ideas, or profits to help each other out.

Terms

• Lawsuits are when you take someone to court because you think they did something wrong.
• Import duties are extra taxes countries put on goods that come from other countries.
• International partnerships are when countries or companies work together to help each other out.
• Trade wars happen when countries fight by raising taxes on each other’s goods, making it harder to trade.

Assignment 4