Features of Trading

Free trade helps the countries in getting mutual advantage for the nations that operate under the free trade policy. The features of free trade help the nations to promote trade effectively. Free trade helps in trading of goods without paying taxes and also prevents from other trade barriers. The absence of trading policies helps the households, and firms to have an advantage over others. It prevents the nations from paying subsidies, taxes, regulations and other kinds of laws. Free trade determines prices on the basis of demand and supply between nations. It helps in setting the prices of factors of production. Free trade provides accessibility to markets. It also provides access to market information. Free trade also helps in movement of labor between the nation and within nation. Free trade also permits free movement of capital between countries and within countries. The free trade policy also prevents from customs unions and easy movement of goods from one place to another.

Free trade provides absolute advantage to nations when they agree to share goods and services and labor with one another. Free trade differs from other forms of trade policies. The interventions like subsidies, tariffs and taxes are not a part of free trade. There are many trade agreements that have been signed between nations who are willing to trade freely. The North American Free Trade Agreement popularly known as NAFTA and the Central America Free Trade Agreement popularly known as CAFTA prevent the nations from any kind of market interventions and government interventions. Free trade also helps in proper allocation of resource and removing trade barriers. The government interventions increase or decrease the prices of products and services and increase trade barriers between nations. There are many nations that are members of World Trade Organization. This organization helps its members in trading in a simple manner without any kind of barriers. Thus free trade facilitates proper trading between nations.

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The Effects of Fair Trade on an American City

When people hear about free trade they tend to dismiss its impact in a place like the United States. Most people don’t think much of the matter because it doesn’t affect them. However, free trade affects everyone, and has had a profound effect on the market, and the availability of employment.

Companies operate to make money. So, when it comes to making money the most important thing for a business is to keep the operating costs low and keep profits high. Free trade, while it might not seem ethical, presents companies with the best opportunity to keep their profits high.

Oceanside, California produces goods like most parts of the United States, but they sell products at a higher price than other nations. An Oceanside Property Management company must maintain certain environmental and ethical standards that the rest of the world (because of free trade) doesn’t have to worry about. They, along with the Oceanside Environmental Service, offer goods that help the community. They are committed to protecting against urban sprawl and keeping the area safe for local wildlife. These things are not choices, but necessary standards that the company should adhere to.

While these standards are necessary, it does come at a significant cost and is important to the safety and health of Oceanside and its workers. Although many businesses should be concerned with the fact that many of these companies in other countries don’t have standards for their businesses and aren’t expected to develop land properly, the truth is that they often look past it in favor of dollar signs. They ignore the fact that other companies don’t have to develop land appropriately, dispose of waste in a naturally safe way, and correctly handle refuse.

The battle worldwide over free trade will continue to rage. Those in favor of it will never see a need to cut their volume of business, while those against it will never see a reason to harm the environment.

Filed Under: Business, Free Trade

Democracy – a Western Concept?

Democracy – it is a concept that has seen the rise and falls of many rules, has caused several changes of governments and has been the cause of many wars. The Democracy is derived from a Greek word that means ‘Rule by the people’. The original concept of democracy was first developed in Athens back in 600 BC. It was quickly adopted and adapted by the Romans who brought it to the rest of the world. Or is that all there is to it? Is democracy a western concept or was it prevalent in other civilizations as well?

When the concept originated, Greece and Rome were not part if the western more. They were categorized as being Middle Eastern, bordering that region. The concept then spread eastward before reaching any of the western civilizations. The western world adopted the ideology much later when the rise of Islam and losses during the Crusades led to a need to unify the western populace using a concept that appealed to them. As people were not aware of what was happening around the world and what the histories of other nations were, the western powers were able to claim democracy to be their own concept.

Democracy is historically found to be present in India as early as 500 BC! It first appeared in Europe only in the 5th century, while England adopted it as late as 1265. The US accepted the concept much later in 1788 and too with voting restricted to white males. The point being made here is that a concept as vital to human rights and public governance as democracy should not be attributed to the western culture alone but should signify a unified mindset which prevailed the world over much before recorded history. Modern day democracy should not be a struggle for power but a rule based on the pure concept of of a government ‘Of the people, by the people and for the people’.

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Of broken oaths and stolen benefits

There has been a lot of pressure building up in the international community for world powers, the IMF and the World Bank to cancel the debts of all those countries that are in a severe national and economic crisis. While this seems to have had some effect with many nations like the US, UK and Germany pledging to write off debts, most of these promises have not been carried out as yet. In fact, the IMF and World Bank remain the biggest creditors of third world countries.

At the 2002 UN Conference on Financing for Development held in Mexico, the US and EU pledged over 15 billion dollars to be given as foreign aid to poor countries over the next 3 years. The year 1999 was a great year so far as debt cancellation is concerned. The Canadian Prime Minister Jean Chretien promised that Canada would take solitary action even if other G7 countries refused to cooperate on the issue of debt cancellation. The then President of the United State, Bill Clinton, pledged a 100% debt cancellation on the condition that the countries would utilized the released fund for public welfare and infrastructure development. Britain followed the example and set the same condition for cancelling 100% of the debt owed by 26 poor countries. Germany followed suit by promising to cancel 100% of the bilateral debt of nearly 30 poor countries.

While all this sounds very promising for debt eradication of third world countries, the truth is quite different. By the time of the 2000 G8 summit, none of the promises made in 1999 has even started to be put into effect. A Green Peace survey announced that by 2002 for every dollar that the G8 had pledged towards debt relief, a meager 3 cents had actually been delivered. Red tape and slow execution has led to further debts being incurred by the third world making such partially fulfilled promises null and void.

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Does free money aid development?

The developed world provides all kinds of assistance to third world countries in the name of humanitarian aid. In addition to the Free Trade police, there is the Food for Peace program that provides free food to countries affected by famine or food shortage. There are also Development Aid programs which provide third world countries with financial aid that is meant to help the progress. The United States has provided over $131 Billion as development aid to developing nations since 1946 whereas a total of $800 Billion has accumulated as debt for third world and developing countries. Despite such mammoth funds pouring into their economies, developing nations have not showed the kind of progress this money would have expected to bring about. In fact, experts say that development aid might actually hinder the development of such nations.

 

It has been noted that aid funds are used by ruling parties or persons in power to further their own personal gains and influence. Trying to access aid funds illegally leads to an increase in corruption and although the aid is meant to uplift the poor, it only makes the rich richer while the poor remain deprived of its benefits. Development aid is meant to be spent of infrastructure and welfare programs aimed at improving not only public but private industries as well. However, barely a fraction of the funds is given to private sector development while majority of the aid money is put into government run projects that are unchecked and are not audited, giving no indication of spending. India’s recent multi-billion dollar telecommunications and Common Wealth Games cams are proof of how ministers in power swindle huge amounts of money without ever being caught. The governments of such nations vie to get even more aid draining international funds that could otherwise be used to better purposes. Development Aid cannot fully benefit third world and developing nation without international control, monitoring and auditing of its spending.

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How helpful is free food to the third world?

There are certain humanitarian programs of developed countries and world powers that, although aimed at making like better for people in poor countries, actually end up making life a living hell. Once such program is the free food program, more popularly known as Food For Peace (FFP). Launched way back in 1954, Food for Peace is meant to be a humanitarian aid program to avert death due to starvation in several countries. Since the inception of the Food for Peace program, the United States of America has distributed over $34 billion worth of food and provides $1.2 billion each year as food aid to third world countries.

 

While this may sound like a great initiative, it has some terrible effects on the lives of those living third world countries whose economy relies majorly on agriculture. To begin with, when a nation received free food in large amounts from other countries, the prices of food grains in the domestic market get lowered artificially. This means the local farmers end up getting a much lower price for their crops. Most farmers raise one or a maximum of two crop cycles in a year and depend on the income from these crops to support their families all year round. With lowered prices, farmers are pushed to the brink financially. American wheat that was given to India may lead to the bankruptcy and eventual suicide of thousands of farmers each year while hundreds of thousand die due to starvation.

 

If food is being given for free then how are people dying of hunger? Due to the high levels of corruption prevalent in government departments of third world countries, food aid seldom reaches those who really need it and indeed gets devoured by the rich and influential. Additionally, nations receiving free food tend to stop focusing on agricultural development, further impacting local farmers. While humanitarian aid programs may be aimed at betterment, the result is often tragic for the poor.

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An Overview of Ethiopian Economy

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Ethiopia is largely an agricultural economy, accounting to 85 percent of total employment. There are no private sector businesses or companies in Ethiopia, all the industries are controlled by the government. All the industries controlled by the previous regime have been transferred to “pro-government” for industry privatization. The current government has put into motion certain strategic developmental forces, and the country has only started to attract foreign investment.

Land and Financing Monopoly

There is a visible schism between privatization and non–privatization of land. The Ethiopian constitution says that every person in Ethiopia has the right to own land, but the land belongs to the state, as well. In fact, citizens cannot lease their land beyond 99 years, and they can neither sell nor mortgage the land. Furthermore, an affiliate review on financial investment shows a complete monopoly by not allowing any foreign bank to establish branches in Ethiopia. With the local banks that exist, it is almost impossible to get loans for small- and medium-sized businesses. Moreover, the youth unemployment ratio is too high, almost 70 percent.

Major Industries

Food processing, chemicals, metal processing, cement, textiles, beverages, energy, and, of course, agriculture are the main industries. Among the export goods, coffee, gold, leather, leather products, live animals, and oilseed are the main ones. In the recent years, the number of exported goods has declined gradually, making a negative impact on the Ethiopian foreign investment ratio.

The Problem

Even though the Ethiopian economy has a wide scope for growth, estimated at 10 percent in 2011, the major setback for the current government may be to override the existing conservatism and rigid land and trade control laws and allow foreign investors to build a base in Ethiopia. Nevertheless, this requires intrinsic planning and implementation of strategies for the betterment of the economy.

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The Importance of Free Trade

When you hear the words free trade what do you think? Do you think of a sort of open flea market between countries, bartering their goods? Or do you maybe see it as boats being shipped between countries? The fact is free trade is the system of a trade policy meaning that it just means that the people of two different countries can trade with each other without interference from the government. Of course this doesn’t mean two average citizens but rather what it means is that two companies with two big industries can trade for the betterment of themselves without the government acting involved. The law of comparative advantage permits that the trading partners end up with mutual gains from the goods and services.

When you are talking about a free trade policy you are looking at prices that are a true reflection of supply and demand and are also the sole determinant of resource allocation. The idea of free trade is different from the other forms of trade policy where getting goods and services are determined by artificial prices that may or may not reflect true nature of supply and demand. These prices are the because of the protectionist trade policies this is where the government gets involved in the market through price adjustments and supply restrictions. Government interventions can increase the cost of things for both parties.

So what are some of these interventions? They include subsidies, taxes, tariffs, and non tariff barriers and regulatory legislation and quotas. Sometimes there is inter-government managed trade agreements such as the North American Free Trade Agreement and the Central Free Trade Agreement and other governmental intervention resulting in artificial pricing.

Most states have trade policies that are protectionist. One such policy is that of agricultural subsidies where countries attempt to protect from outside competition by creating artificial prices for their goods. Free trade agreements are also an important part of free trade areas. It’s clear that free trade is an important practice for most countries.

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How Free Trade is Today

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So when talking about free trade it’s important to understand the further principles of free trade. There are many ins and outs and each one has an impact on the rest of the global economy. The first idea is that of trade diversion. So the idea is that global free trade is a benefit to society but have free trade agreements with some but not with others can lead to problems economically by something called trade diversion. It would make the most sense for a good to be produced by a country that is the lowest cost producer but this isn’t always the case if the high cost country has the free trade agreement but the low cost country has a tariff. This is why those in favor of free trade believe in free trade for the whole world because in many instances it does a country no good to buy from a high priced maker as this will lose them money in the long run.

Most economists believe that free trade is a gain for society even with it’s complications. Now this idea of free trade isn’t supposed to be confused with the idea of a free market. When people talk about free trade they often confuse it with the idea of a free market which is a problem in and of itself. There is nothing about a free trade that is the same as the free market.

Most Americans are in favor of the free trade as they see the benefits. Most American’s are in favor of it because they see it as a right of the American constitution much the way they view the freedom of speech or religion as a freedom and basic human right. They believe that the government should not interfere with the right of a person to sell goods or services in order to prosper and better their own lives. But with global economics being what they are it is unlikely they will rid the world of all tariffs.

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Filed Under: Free Trade

Comparing Pet Insurance

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When buying health insurance you like to shop around for the best deals. So why not do the same for your pet insurance? Comparing pet insurance online can really help you save a lot of money on your pet insurance.

Like health insurance, pet insurance can offer different policies that are completely different in price. Many companies do offer online quotes, which will make comparing pet insurance policies a lot easier on you. It’s important to make sure you read the policies carefully. Taking a look at three or four will give you a great idea to see how much pet insurance is going to cost you.

Make sure the policy you’ve chosen will cover any medical attention your pet may need.
Most insurers will give you the option to add certain types of care, such as dental cleaning, to your policy. You will need to think about your dog’s age before choosing a policy. The older your pet, the more you will pay in your pet insurance policy. They could also lower the cover of your pet.

Also keep in mind any medical care that could be needed for your pet. If you recently adopted a pet, make sure the pet insurance policy will cover either spaying or neutering.

Lastly, make sure the insurance company is licensed to sell pet insurance in your state. Each company will have all that information on their website. It’s also good to just make sure their credentials are good. If you have any doubts or concerns, it might be best to move to a different pet insurance company.

There is quite a bit of difference between many pet insurance quotes available online. In fact, the cost of your insurance plan can vary greatly, depending on your personal situation. What would make the price change is your pet’s age, its medical history and if your pet is an indoor or outdoor pet.

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