Sign Up Now
Get instant access to over 1 million+ study documents
OR
Already registered? click here to login
By creating your account, you agree to our terms of service, privacy policy and student honor code.
Free Trade Zones
Using Nissan Motor Mfg. Corp. VU.S. answer: Why Congress establish Free Trade Zones? What advantages Nissan assembling autos FTZ? How argue FTZs community?
Reasons for the Establishment of Free trade Zones (FTZ)
In the United States, free trade zones establishment is to provide procedural efficiency for firms wishing to engage international trade activities. The establishment of free trade zones by congress is for exempting operators in these zones or sub-zones from custom duty on imported commodities. The Congress makes specific mention of items that are exempt from duties to areas set as foreign trade zones. It is a form of privilege to public, private corporations to undertake operations within the boundaries of the United Nations. It acts as a measure to encourage effective competition and, encouraging economic growth.
Considering the cost of importing parts of Automotives, finished automobiles are imported at a 2.5%...
These costs are higher for significant components of the Automotives. The intention of Congress in this case is to create a conducive environment that beckons investors to locate production plant within the U.S. boundaries. The location of these industries within the U.S. economy will provide an opportunity for employment and exploitation of the local resources (Sturgeon T. et al., 2009.). The U.S. will also benefit from other revenues other than those foregone in custom exemption.
Advantages to Nissan for establishing autos in an FTZ
Other than the exempt taxes, Nissan stands to benefit from reduced cost of transporting finished commodities into the U.S. economy. The costs associated with shipment of finished products are three times higher that the costs of transporting components parts. The assembly of these products within an identified creates an opportunity to…
References
Sturgeon T., Memedovic O., Van Biesebroeck J., & Gereffi G. (2009.). "Globalisation of the Automotive Industry: Main features and Trends,." International Journal of Technological Learning, Innovation and Development,, 2(1), 1-2
Trade blocks remove certain restrictions to trade. Economic blocs help promote free trade. Discrimination against imports nor interference with exports describes free trade policy and the government's role in free trade. The role of the government includes not applying subsidies to exports or tariffs to imports nor quotas. In accordance with the law of comparative advantage, policy allows the trading of partners' mutual gains derived from trade of services and
The level of industrialization of the SEA countries also varies largely but this can be attributed to the difference in the size of the domestic market of each country or region and their overall level of development on the economic front. Singapore and Indonesia have benefitted largely from the creation of the ASEAN since these countries are the larger of the SEA countries. Malaysia has also benefitted as a
Also, the importation of technology from abroad exposes consumers and producers alike to the innovative use of vehicles, such as hybrid technology, that domestic producers can implement even better than the original manufacturer. Innovation is the ultimate driver of new sales and the creator of new markets and new markets means more jobs for workers. Beginning a trade war by setting tariffs or limiting imports through quotas ultimately creates waste
Free Trade Trade is the exchange of goods or services, and international trade is the same when it crosses international borders. Trade across borders traditionally has been subject to trade barriers such as quotas, taxes, tariffs and duties. Modern trade theory rests on two key platforms. The first is Ricardian trade theory, based on comparative advantage, where both parties in a trading arrangement can enjoy a higher net level of trade
However, each stakeholder has its own interests at heart. Those interests in the long-run may be served by freer trade, but in the short-run they are driven more by political considerations. Works Cited Markheim, Daniella & Rield, Brian M. (2007) Farm Subsidies, Free Trade and the Doha Round. The Heritage Foundation. Retrieved December 11, 2008 at http://www.heritage.org/RESEARCH/BUDGET/wm1337.cfm Chang, Ha-Joon. (2007). Protectionism...the Truth on a $10 Bill. The Independent. Retrieved December 11, 2008
Free Trade Agreements Are free trade agreements a good policy for nations? Given that there are 200 free trade agreements in place globally, there are clearly benefits, but what are the negatives? This paper explores the positives and negatives of free trade agreements, and this paper delves into the NAFTA pact between the U.S., Canada, and Mexico, for the upsides and downsides of that agreement. What are Free Trade Agreements and why