Since globalization, our world has survived on international trade. Countries have built fortunes on international trade. International trade is similar to domestic trade except for the geographical borders. International trade is nothing new. Since the dawn of silk trade, International trade has become the intrinsic part of our lives. The internal trade turned the world into a global village. Nonetheless, international law needs to be governed by some rules and regulations. The international trade laws make sure that no country takes advantage or another.
The majority of international trade laws concern tariff, subsidies and various other forms of trade protection. Trade protection is necessary so that no country takes advantage of another. Professor of Law at Rutgers-Camden School of Law, Ari Afilalo believes that variety of changes need to be made in the current trade laws to ensure that no discrepancies occur. He focuses on three subjects for his research regarding the new trade laws:
What is a tariff?
A tariff is a government tax imposed by a country’s government. A tariff makes the imported products into the country more expensive. This is the main reason that the imported goods are more expensive than the local product. Generally, trade unions lobby the government to put in tariff. With the tariff in place, the locals jobs become more secure has the imported good becomes expensive.
What is a subsidy?
A subsidy is a monetary discount given by the government to support the local industry of the country. The subsidies make the products cheaper for the customer. This is one of the more competitive forms of trade protection. The trade unions often lobby the government to increase the subsidies to make people support the local government.
While the trade protection can help the local market, it makes the country less competitive in the international trade market. To keep the country competitive in the global trade market, the trade protection needs to be given carefully.
To know more about the relationship between the trade protection and the international trade law, read Ari Afilalo’s book – The New Global Trading Order.