IMPEDIMENTS TO

INTERNATIONAL TRADE

Submitted to:
Prof. Raysam

Submitted by:
Ashini Mody
08BS0001751
Eventhough, International Trade is doing very well these days, there lies a
challenge at every step. With increase in competition, international trade is
subjected to many challenges. Challenge of international trade may be
psychological, infrastructural, and physical. The challenge of international trade
and other associated information and guidelines are usually made known in the
trade policies.

The above mentioned three challenges affect the economy at the enterprise and
micro levels.

In addition to the trade associated challenges in international trade, a new

challenge, which is lurking large, and had practically devastated the United States
of America, is the fight against terrorism.

After the terrorist attacks on the World Trade Center, there was global economic
slowdown. International trade suffered massively. There were tremendous
fluctuations in the exchange rates. Starting from anthrax attacks to the terrorist
attacks on Sept 11th, the trade scenario worldwide has changed dramatically since
then.

It is argued that International Trade adversely affects wages, particularly when

trade takes place between two countries in one of which wages are very low and in
the other very high. Like the trade between countries like America and China or
Japan.
Certain Arguments against International Trade

Some of the arguments advanced against international trade include the following:

 A country which depends on imports is in a vulnerable position during war.

 International Trade become a reason for economic instability and result into
conflicts with economic planning.

 International Trade inflicts harm on those home industries whose prduct are
displaced by the imports.

 It implied dependence on foreign markets as sources of supply and as outlets

for domestic production. Some people felt dependence to be dangerous.
They felt to reduce such dependence or entirely eradicated.

Hindrances Faced

International trade involves many countries. Every country is expected to abide by

certain norms, which govern the logistics in international trade. The economic
condition, political make up of a particular nation is never constant. In the event of
an unforeseen event, taking place in any country, the trading partners are also
affected to a great extent.

 National Defence

If a nation is depended on foreign sources of supply is in a woeful situation

during war. Taking the experience of England world war is a cited proof, in
which the blockade of England by German submarines had brought England
to their knees by cutting off imports of food and essential raw materials.
  Instability and Economic Planning

In 1930s when the Great Depression spread from one country to another by
disrupting the international flow of goods, services and capital. Today the
argument against international trade has been reinforced by government
policies directed toward achieving full employment and economic growth.
Most nations are unable to achieve the objectives of full employment and
growth as members of an in international trading system.

 Production

Attacks on international trade have been directed against imports. There is

always a risk for the protection of domestic industry against foreign
competition. It also affects national security, economic stability,
employment, protectionism and others.

 Non Tariff Barriers

There are certain restrictions such as Quantitative Restrictions, Voluntary

Export Restraint (VER), Licensing and Administered Protection. Quotas are
aimed at reducing the quantity of imports/exports in order to protect the
interests of domestic producers or to conserve foreign exchange. There are
certain chances for misusing the liberalization.

 Other Barriers

There are also other common barriers which are faced by all nations like
Language Barrier, Political Barrier, Infrastructure Barriers, Currency
Barriers which becomes impediments to International Trade. It also affects
Growth of the country which affects their GDP and also relationship between
two countries.

In order to overcome the challenges faced by the international trade market, several
measures can be adopted. With regard to shipments, export and import of
commodities, if the shipment can be traced in real time, loss worth several million
dollars can be prevented.