Global Protection Practices
Global protection practices vary from each country. Every country has its own reason why it has to implement practices that will protect their local traders, goods, or even jobs. Policies and practices, which governments implement, will also ensure their control over local and international trades, which are being imported and exported by their country.
EU (European Union)
European Union is using one of the common tools in protecting and controlling their trades. EU uses the Tariff on their imported goods. As an advantage, tariff will raise the imported price giving more opportunities for domestic producers to sell goods on a lower price and providing more income for the government by collecting more taxes. On the other hand, this impacts the consumers in the country where the tariff is being applied, forming more expensive goods. This will also raise the costs for export businesses once their trading partners will also apply their tariffs (Sanders, 2013). This kind of bilateral trade may suffer the products’ quality if traders will reduce production costs to account tariffs.
NAFTA (North American Free Trade Agreement)
NAFTA is an agreement that changed how Canada, USA, and Mexico do their practice their trade policies. This agreement allowed the companies based in the United States to move their businesses and production operations into another country like Mexico. This eliminates the tariff among these three countries which is an advantage for a business, which give them lower operational costs. On the other hand, this agreement gives Mexican workers lower wages and less protection in terms of health and safety. This will also reduce the number of jobs available for Americans, which is also not a good economic result (referenceforbusiness.com, n.d.). It also suppressed worker’s wage growth as the companies threat to move their operation to Mexico, but not all.
North American Free Trade Agreement (NAFTA) - duties, benefits. (n.d.). Retrieved from http://www.referenceforbusiness.com/encyclopedia/Mor-Off/North-American-Free-Trade-Agreement-NAFTA.html#b
Sanders, M. (n.d.). The Disadvantages of Tarrifs & Quotas | Chron.com. Retrieved from http://smallbusiness.chron.com/disadvantages-tarrifs-quotas-20726.html