The world is increasingly becoming interconnected due to the ease of movement, the spread of knowledge, as well as advancements in technology. This has led to diversified international trade (necessitating the respect for international law), increased globalization facets, and improved international relations between countries as shall be demonstrated in this essay. International law refers to businesses and countries engaging in global trade. Imports and exports are thus the two major data items in the concept of international trade. Vijayasri explains that comparative advantage is the fundamental concept underlying the trade across boundaries.
Countries benefit by having businesses that trade internationally. For example, global trade allows for specialization and reduced product costs to consumers of the trading countries as they (countries) engage in activities with the lowest opportunity costs. International trade also helps to maximize revenue by importing that which would be uneconomical to produce and exporting available surplus. Countries also experience economic development due to businesses trading internationally. For example, global economy exports and imports supported over 39.8 million jobs in the US in 2013. China, on the other hand, exported over $2 trillion of its total production. This accounted for a significant percentage of the countrys total GDP. America, on the other hand, exported $1.47 trillion in 2013, accounting for 13.45% of the countrys total GDP.
Both profit and non-profit organizations benefit from engaging in international trade. Apple Company, for example, trades on a global scale. This multinational company headquartered in California is reputable for its unique design, development, and sale of consumer electronics, software, as well as online services. Some of the companys most reputable products include their iPhone, Mac Personal computers, and iPads among others. Employing over 115,000 full-time employees globally, Apple also maintains over478 stores that supply their products in retail in over 17 countries spread worldwide. Apple sells its products to countries such as Indonesia, Israel, Canada, Netherlands, Brazil, and China among many others. Though there arent explicit details on its import and export statistics, it is inarguable that apple exports its products to many countries. Further, it does import from other countries, but the major preference being China where most of its products are manufactured and assembled. The decision to import from China is informed by competitive advantage as manufacturing, for example, the iPhone in America would cost it $4.2 billion more. The decision on the volume of products to export is informed by the size of the market. For example, the companys product has a larger market in Germany compared to Vietnam, hence exports more to the former.
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Apple has inarguably achieved its set aims and objectives. For example, the company aims at becoming the leading company in the mobile and technology market. Recent Analysis places it as one of the leading companies in the field. Secondly, the company aims to continue with research and development leading to new product innovations. The company has achieved this objective as it continuously releases new products such as iPhone 6 Plus and iPhone 7. Further, Apple also has the objective of reaching consumers who do not have access to Apple products. They have been successful as their products are also available in developing countries such as those in Africa. Lastly, the company aims at providing bother-free products that provide services facilitating customers enjoyment. This has been achieved by the continuous development of new products.
Non-governmental organizations such as UNICEF also operate internationally and are governed by international laws. UNICEFs business purpose is to help provide humanitarian aid for children and others in developing locations in the world. The organization also purposes to expand childrens opportunities to help them reach their full potential. Also, UNICEF strives at promoting the physical and emotional welfare of women and children in underdeveloped or war-torn countries (UNICEF). Its history spans back to1946 when the United Nations General Assembly established for the provision of healthcare and food to women and children affected by the second-world war. UNICEF has helped improve situations in different countries. For example, the organization helped in the development of a water station in South Sudans West Darfur region. This water stations allowed children to attend schools on time, provided a clean supply of water, provided a means of livelihood and improved the womens lives.
International law can affect businesses in foreign countries. First, the difference in laws between countries can lead to litigious issues. This is evidenced by Apples case where an audit established that Apple violated employment laws. The audit showed that the company was violating overtime terms. The audit also revealed that employees worked longer hours than is stipulated by the Chinese law and had poor safety standards. Apple had to develop better compensation packages as well as adjust the working hours and terms to adhere to the labor laws. International law consumer rights may also impact a companys policy and in the long term, its revenues. For example, the Danish Sales of Goods Act gives the customer a right to receiving a new product in replacement of a dysfunctional product, provided the product was replaced within a two-year time frame. Apple usually replaces such with refurbished products, but the case in Denmark shows how such laws can impact Apples revenue. Apple was expected to replace the customers product with a new one in a consumer rights case, but Apple is reluctant as this is not how it handles such issues.
There exists an undeniable symbiotic relationship between the economies of the world and politics. This informs the increased importance to understand different views to world politics. Realism and Liberalism are two theoretical constructs with differences and similarities. The realism approach emphasizes on a states self-interest in a global economy that is naturally competitive. On the other hand, liberalism focuses on states establishing and promoting internal political philosophies that promote coexistence and cooperation. From the definitions, there are clear differences between the two views. Realism prioritizes the goals and strategies aimed at achieving national economic prosperity. As such, the states are the chief actors, and there exists no authority above the states to regulate behavior. Further, realism recognizes antagonism between nations as a natural phenomenal as each state looks at leading the others. The corn laws of 1815-1846 in England are perfect examples of what realists believe in. On the other hand, liberalism views anarchy as uncalled for and views harmony and long-term cooperation between states as critical. This view thus focusses on ethics, decency, and altruism as the foundational basis of a state. The role of international peace-keeping in liberalism, therefore, cannot be overstated. However, the major similarity between the two views is the appreciation for the hegemony concept that is important in the creation and maintenance of world order. The two approaches depict the currently increasing need of having an order that has a superpower leader in economics and to have some form of order in relations. Of the different views, the liberalism approach is the best as has been proven in many countries to be effective. Also, with ethics and cooperation, trade becomes freer as wars reduce. The liberalism approach is undeniably important in times of natural disasters and wars as countries can get help.
Globalization, as earlier mentioned, is evident in everyday facets of our lives. Its description also varies, but in an economic sense, globalization refers to opening up of markets, fairness in trade, and integration of economies within the world. Gupta defines globalization as the aspect of local and nationalistic perspectives opening up to a viewpoint that is interconnected and interdependent with freedom of capital, labor, and services. There are features that characterize globalization. The first characteristic is connectivity and integration. This refers to different communities or countries breaking barriers and boundaries that previously kept them apart and forging relevant links amongst themselves through the international spread of knowledge, technology, culture, and information among other aspects. The second characteristic is liberalization where there is freedom of trade and exchange of goods, services, and technologies between the countries. Industrialists and businesspeople, therefore, experience the freedom to trade within and beyond their countries. The last characteristic of globalization is that it is an amalgamated process. It has thus led to the creation of a new borderless world order with the integration of global nation-states through economic, commercial, political, cultural and technological ties.
The potential causes of globalization vary. First, globalization can be said to have occurred due to an improvement in capital mobility where the last few decades have seen an increased elimination of capital barriers. This has allowed capital to flow to different economies and increased global interconnectedness. Secondly, globalization may have resulted from technological advances and development that have fostered communication, subsequently making it easy to share information worldwide. The internet, for example, has been a helpful tool on the same. The other cause is the increasing growth of multinational trade where companies trade in foreign countries. This helps in the spread of information, knowledge, and culture. Globalization may also have been caused by the positive growth in trading blocks that have eliminated major national barriers. This includes blocks such as NAFTA, the European Union, and ASEAN among others. The improvement in transport facilitating the movement of people worldwide has also caused globalization.
Countries have experienced the benefits of globalization in higher capacities than others. This has created the aspect of developed, developing, and emerging economies. Developed economies refer to markets that are advanced economically. These economies have capital markets that are well-developed and with increased levels of liquidity, large market capitalization, and important regulatory bodies. Such economies are usually found in the U.S.A, Germany, Western Europe and Japan. Developing economies refers to economies of states that have weak industrial bases and low Human Development Index compared to others. People have lower literacy levels, lower incomes, and life expectancy is low. Many African countries fall into this category. Lastly, an emerging economy refers to economies of countries that are experiencing rapid growth and development characterized by low capita incomes and markets that are less mature compared to developed markets. India, China, Brazil, Ireland and Greece among others are fitting examples.
There are both benefits and limitations of international trade and economic growth. The first benefit is that countries can exploit their comparative advantage. A country can thus specialize in what it produces at the lowest opportunity cost and take advantage of the different economies to maximize their revenue. Efficiency in productivity is thus maximized. Countries and companies can also take advantage of economies of scale due to the possible trading between borders made possible by globalization. The second benefit is that international trade helps to steady prices. This is because, with the ease of movement of goods and services, competition is increased which gives consumers some purchasing power. On the other hand, there are limitations of international trade and economic growth. First, such trade impedes the development of local and home industries. Their survival is threatened by foreign competitors and unrestricted imports as well as cheap counterfeit goods. Secondly, the increased trade freedom may lead to the exhaustion of natural resources causing environmental dangers to countries. This explains why organizations such as Greenpeace campaigns against activities and businesses that endanger the environment. Another limitation is that international trade tends to favor the production of products where countries have a comparative advantage. This may negatively affect the counties in times of hardships such as wars.
There are differences between MNCs and TNCs. Apple is a multinational company. This means that though Apple has stores and trades in many world countries, it has a centralized system with a home company that manages them. The headquarters in California provides a centralized management system, and major decisions are made here. The concepts of free markets and liberalism in the different economies allow Apple to trade in the countries it does. Apple trades overseas as the markets provide sufficient customers for their daily growing number of products. The policies and regulations also attract Apple to the countries it trades in. On a global scale, Apples products are made for all people, hence embraces a one size fits all approach. The iPhone, for example, is designed for use by any person. The products characteristics and features are deliberated, and the design decided on in America. The different components making the iPhone are shipped from different countries, but the assembling is mainly done in China. This demonstrates the power of international trade and globalization. The product is also distributed by thousands of sellers which translate to differences in prices and taxes. However, in the recent past, there have been deliberations of scratching the on- size-fits-all to achieve their objective of facilitating their customers enjoyment.
In conclusion, it is undeniable that a global economy is imperative to the growth and development of countries. Such trade allows countries to capitalize on their comparative advantage and to benefit from economies of scale. Information, culture, and technology also spread through international trade. Further, international trade gives consumers purchasing power, helps countries earn through revenue, and increases freeness in trade. As such, it is important for a business to follow the laws governing them in foreign countries to enhance international relations. As seen from Apple Inc., following international trade laws helps avoid litigious issues that may damage the reputation and brand name of the company. If a company is to develop in foreign countries, there is no alternative to respecting and withholding the laws of that domestic company.