International trade is conducted by efficient companies specializing in different sectors. Governments impose tariffs or quotas, but international agreements and organizations aim to reduce barriers to trade. Containerization, harmonized contracts, and dispute resolution mechanisms have also facilitated trade.
International trade is conducted by companies that are efficient enough to be competitive on the international market. Firms in different countries tend to specialize in different sectors; for example, industrialized countries may have firms specializing in high-tech manufacturing or financial services, while developing countries may export mainly agricultural products. Governments impose tariffs or quotas to protect some domestic industries from imports from abroad, and these represent a barrier to international trade. International agreements and organizations have aimed to increase trade by reducing tariff barriers and providing dispute resolution procedures. World trade has also benefited from better means of transport, containerization and harmonized conditions for international contracts.
International trade has been facilitated by international agreements and organizations such as the World Trade Organization (WTO). The negotiations resulted in reductions in tariffs and quotas that had held back international trade. When tariff disputes arise, there is a dispute resolution process that includes the imposition of sanctions against countries that have broken the rules. While international agreements are often difficult to achieve, WTO negotiations ensure that international trade issues are carefully considered. Among the remaining issues for world trade as of 2011 are the reduction of subsidies to farmers in industrialized countries and the consideration of the need for protection for agriculture and other sectors in poorer developing countries.
The introduction of containerization has made the logistics of international transport much easier. The development of large container seaports and inland dry ports, as well as rapid docking, loading and unloading stimulated international trade. Larger vessels are guided to port by radar and carry larger cargoes. Ports have expanded to accommodate freight transport and have developed an infrastructure to move it rapidly.
International contract terms have been harmonized by the work of organizations such as the International Chamber of Commerce (ICC). Standard contracts reduce the possibility of misunderstandings between buyers and sellers regarding the distribution of transport and insurance costs. The increased use of electronic means of payment has reduced payment worries and letters of credit have been adapted accordingly to ensure that financial matters are expedited as quickly and smoothly as possible.
International trade disputes can be resolved more easily following the introduction of dispute resolution mechanisms through agencies such as the United Nations Commission on International Trade Law (UNCITRAL). Countries have facilitated international trade for businesses by signing bilateral investment protection agreements that grant certain guarantees to investors and provide for dispute resolution. Similarly, bilateral double taxation agreements between countries aim to eliminate the possibility of double taxation on companies trading internationally and provide a mechanism for resolving tax disputes.
Protect your devices with Threat Protection by NordVPN
