Business - International Trade Assignment Example | Topics and Well Written Essays - 750 words

Business - International Trade - Assignment Example A safe guard restrains international trade. In 2002, the United States imposed a safe guard against steel products, (China Trade Remedy, 2011). The United States trade Representative asked the US international trade Commission (ITC) to begin an official safe guard investigation, under section 201 of the US trade laws. The request involved specifically asking the ITC to check whether steel imports were causing injury to the home steel industry. This was under 612, HTS product categories, (China Trade Remedy, 2011). In October 2001, the ITC made an announcement to the effect that it had discovered that steel imports had to a significant extent, caused injury to the domestic steel industry. In December 2001, the ITC made an announcement to the effect that a safe guard is to be imposed. This involved a relook into safe guard tariffs and quotas, (China Trade Remedy, 2011). During this period of time, the USTR began requested the US steel consuming industries and foreign steel exporters to start submitting petitions (China Trade Remedy, 2011). These petitions were meant to have their products removed from the upcoming safeguard. For this exclusion to be made they had to satisfy the USTR demand to know whether the domestic steel production was insufficient for the country. Why nations in the WTO refuse dumping: Dumping is an act of pricing that applies to international trade. ... It is a predatory practice, which is highly condemned, by the world trade organization, (WTO, 2012). This does not mean it’s necessarily prohibited. It is one of the things, which can utterly destroy domestic industries; therefore it calls for manufacturers to act with restraint. When local industries are hurt, the country has a lesser ability to do trade at the international platform. Dumping is a concern to the nations in WTO because it is an extremely expensive act to maintain, (WTO, 2012). It can take many years for it to work. The export country needs to subsidize the product that is being dumped. This can easily cause such a country to accumulate a large sovereign debt. It can even end up hurting the other aspects of the domestic trade in the export country. The other leading demerit of this predatory practice is that, it provokes retaliation from the trade partner. This leads to trade tariffs and barriers. The nations that are involved in this condemned practice can, th erefore, be censured by the WTO, (WTO, 2012). Dumping is rare, but when it happens, local manufacturers cannot avoid loses. This is because people buy the cheaper products. Are trade blocs recommended or not? A trading block is an agreement among governments whereby there is consensus to reduce or do away with tariffs and taxes that are imposed across the member states. These are sometimes referred to as free trade agreements, (Chase, 2005). They are simply intergovernmental trade pacts. Having trade blocs leads to easy and free access of goods or services, (Doole & Lowe, 2008). This easily causes the member states to specialize, which leads to quality of services being improved or better goods being delivered. Besides, at the level of the region, trade agreements lead to a variety of