they desire. This then brings in the basic law of comparative advantage by David Ricardo, “Each country would posses comparative advantage in the production one of the two products and both countries would then benefit by specializing completely in one product and trading for the other.”(3) A country can definitely gain by any means of trade.Countries set up barriers to import and export for several reasons. Duties on importing and exporting can create some government revenue. It is usually a minor source of revenue, however, in smaller less developed countries, it can be a significant source of revenue. A shortage of supply is a reason for a high tariff on exports in a country. If there is a high tariff then there will be less exporting, therefore more of that product in the country, thus making the price of that product in the country lower since there will be a greater supply of it. So trade barriers can be helpful to a country. On the contrary, trade barriers can have a negative effect on a country as well. Consumers will have to pay a higher price on imports, and for similar products produced in the country the price will rise due to consumers buying the imported products. In order to regulate the barriers on international trade, there have been organizations formed. One such organization is GATT, which stands for General Agreement on Tariffs and Trade. Another organization that regulates trade is NAFTA, which stands for North American Free Trade Agreement. This organization of course is set up to regulate the trade in the North American continent, specifically between the countries of Mexico, United States, and Canada. The purpose of these organizations is to promote a free, open, nondiscriminatory trading system.One of the most important aspects to be taken into account when managing companies abroad are the cultural variations that exist between them. It is necessary to give attention to the way diffe...
