International-Business-Dr-R-Chandran-E-book

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International Business- Dr. R. Chandran
• The WTO and its agreements have an impact on every economic activity,
be it agriculture, trading, service or manufacturing.
• World markets are opening up due to lowering of tariffs and dismantling
of other restrictions in developed and developing countries to benefit
from their comparative advantages.
• Domestic markets will be increasingly threatened because of lowering of
tariffs leading to freer entry of foreign goods and because of foreign
companies’ establishing local manufacturing bases.
• Whereas the developing countries will have greater opportunities in
sectors in which they have cost bases comparative advantages e.g.,
textiles, agriculture etc., the developed countries benefit due to the
opening of the service sector and tightening of Intellectual Property
Regime.
• Export markets will become more difficult because of competition
among developing countries with similar comparative advantages.
• Products from developing countries will face higher quality standards in
developed markets particularly in the areas where they have comparative
cost advantage.
• Every company, whether serving the domestic or international market,
will have to undertake an internal exercise to identify factors affecting its
international competitiveness in terms of cost as well as quality. It will
need to study whether it can remain competitive once the product can be
imported freely or tariffs are further lowered or both.
• The WTO regime will be of greater benefit to those countries that show
ability and skill in the ongoing dialogue. The governments that are in
constant touch with their industries and affected groups will be able to
clearly determine how and what should be negotiated at multilateral
negotiations to the best of their advantage.
• International trade is becoming increasingly trade, deregulation and
privatization of internal economy have now been strengthened and
legalized under the WTO. Countries have no option but to follow this
direction. Countries that have understood this have moved swiftly in finetuning
their domestic and international trade policies, to create a winning
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