What Is FTA? Though FTA Benefits Both/bilateral Sides, Why People in Many Countries Have Opposed To It?
What Is FTA? Though FTA Benefits Both/bilateral Sides, Why People in Many Countries Have Opposed To It?
What is FTA? Though FTA benefits both/bilateral sides, why people in many countries have opposed to it?
A FTA is Free Trade Agreement. It carries out the process of eliminating or abolishing the tariffs for investment or for types of products. The reason why people in many countries have opposed to it : - Limitation of trade barriers will have a stronger competition. The competition maybe in their own countries. The higher the competition is, the higher unemployment rate is. hen !oining in FTA, each of countries will concentrate on producing the product line which is the best. The product line may be made from natural resources, which affects other sectors. - The countries with cheaper wor"force will attract attention of the industry from the other countries with e#pensive wor"force by industries. The company in areas with high cost of wor"force will recogni$e that it is not economical. It may be close business. B FTA stands for Free Trade Agreement. FTA will eliminate tariffs, import %uotas, ta# on almost goods and services traded among countries who signed it. FTA will open the chance for companies to e#pand their business in other countries. This ma"es the competition for local firms a lot harder. The employment issue will be affected when domestic firms got wea"ened, they may cut down their employees. ith the e#pansion of global firms, the host country&s culture will be affected as well as other factors such as the environment
Question 2
In regard to FTA, what does the " ules of !rigin" mean? illustrate your e"planation by an e"ample#
A 'ules of (rigin are used to recogni$e or identify or determine the origin the product for trade target. . For e#ample, )hina and *ingapore singed FTA in +,,,. It means that the products of the two countries are imported each other without tariffs. hen the products in )hina are imported to *ingapore, the imports would be no tariffs. -owever, )hina want to import the product line from other countries by. throughout *ingapore, the product lines cannot avoid the tariffs because the origin of the products is not from *ingapore. B The /'ules of (rigin/ is to determine the country of origin of a product for international trade. For e#ample: *wiss is well-"nown for their high %uality watch. 0ased on FTA, when *wiss watch is sold in the 1urope, all ta# and tariffs are eliminated but when *wiss watch is sold in other Asian countries, certain type of ta#es are applied.
Question 3
The creation of the $ingle %ar&et in 'urope has led to "harmoni(ation"# What does this mean? )ow does harmoni(ation affect a company*s global mar&eting strategies?
A -armoni$ation is a process that product standards are made a balance in alignment. It contributes on forcing company to review pricing policy. It affects mar"eting strategy to e#pand and reach large and rich mar"et.. The main purpose is to ma"e a consistent whole of law. It is very crucial in 1uropean to establish original laws in mar"eting strategy.
ith products, it affects product standards, testing and certification process, pac"aging, labeling and processing re%uirement. B /-armoni$ation/ of *ingle mar"et in 1urope means all of the european countries will used a same 1urope standards, regulations and practices for their goods and services. This will strongly affect the global mar"eting strategies since The 1.2 is one of the strongest and biggest area in the world trade. It may be easy but difficult for company&s global mar"eting strategies. 1asy here means company does not need to apply a very different mar"eting campaign for every single country since they all use the same standards. 0ut it is hard at the same time since this overall standards may be a difficulty for your company to catch up with. In long term, if your company meets all of the 1uro standards, it will much easier for your company to do campaign there.