International Business Management (unit-1) Dr. A. Mohamed Riyazh Khan, Assistant Professor (Se.G) department of management studies,

Free Trade The trade is free from all artificial barriers to trade. Like … tariff, quantitative restriction, exchange control. Etc, It’s the liberty of all business transactions….

Arguments favour for free trade… 1. its lead to economic utilization of the productive resources of the world 2. under free trade, division of labour occurs on an international scale lead to specialization, efficiency and economy in production. 3. it help to break domestic monopolies… 4. its lead to get more benefit to the customers.

Protection It’s the protection focus for foreign brands. The developing countries take the weapons tariff and non-tariff barriers (NTBs). NTBs means… quotas, Voluntary export restraints etc,

Objective 1. to protect domestic industries towards the foreign competition 2. to direct the foreign trade in accordance with national priorities 3. to promote indigenous research and development. 4. to make BOP positive 5. to mobilise revenue for the govt…

Arguments for protection 1. Infant industries 2. Diversification (too much foreign industry can create risk) 3. Improving the terms of trade (imposing import duty and quota) 4. Improving BOP 5. Anti Dumping 6. Development of key industries 7. keeping money at home

Favour for Free trade: Protection is against the interest of consumers ( price and quality of product) Protection encourage domestic monopolies. Protection leads to uneconomic utilization of the world’s resources