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MBAF 503

 Weekly summary
of chapter-3

In the chapter- Competing in the global market, we
have learned about the global market, its significant role and about the
participation of comparative and absolute advantage in global trade. The global
market covers the market of the whole world and the market of Canada includes
approximately 34.6 million customers whereas, throughout the world, there are
more than 7 billion customers from 195 countries. The global market comes into
existence because each country is not perfect about the production of every
good, even the country is capable of all the resources and technologically
advanced. For instance, Canada is highly developed and very strongly equipped
country but there is no production of citrus fruits and they must trade with
other countries. Also, India import crude petroleum, gold, silver, electronic
goods, pearls and precious stones from other nations. Furthermore, it describes
the advantages and disadvantages of free trade. It is true that the
productivity and growth increase by free trade, but the domestic workers and
companies get highly affected by it. For example, in India, free trade leads to
depletion of timber, minerals and other natural resources like deforestation
and strip- mining decreasing their jungles and fields to wastelands.
Consequently, there should be some terms and conditions regarding free trade so
that, the outcome is beneficial. Moreover, Canada has an 11th position in the
world trade market. It has 73% export and less than 69% import with the United
States. Beside this, there are certain strategies such as licensing, exporting,
franchising, contract manufacturing, international joint investments for the
global market. To illustrate, if we want to have trade and business in India,
some specific rules and regulations should have to follow and after a certain
period, we must renew that by paying some amount of money. Moving further, it
explained about the different forces which attract trade in global markets like
exchange rate and technological constraints. After that, it depicts about the
protectionism practices that work for limiting the imports by providing
tariffs, quotas and regulatory trade barriers, In addition to this, tariffs are
of two types- one is protective which is meant for increasing selling price
whereas other is revenue that is meant to increase money for the higher
authorities. Apart from this, there are many world trade organizations and
trade agreements or unions. For instance, NAFTA is the agreement between
Canada, the United States and Mexico which has many profitable objectives and
provide impressive security and enforcement of intellectual property for every
union territory. In conclusion, to remain active for competition in the global
market, every nation must stay aware of the global challenge and focus on
modernization as well as entrepreneurship.


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