Trade without discrimination
The Most favoured nation (MFN), which is treating other people equally; was made under the WTO agreements, that states that governments cannot generally discriminate between their trading partners. The MFN is the initial article of the GATT that directs goods trade. This treatment requires the members to give the most satisfactory tariffs and regulatory treatment. Therefore the imported goods and the locally made goods should be equally treated, at least after the entry of the foreign assets to the market (de Oliveira, 2018). This should similarly apply to domestic and international services. Members should grant some special favour like lowering the custom duty for one of their products, and this should be done to all other members of the WTO. The article conditions that by reducing the trade barriers will encourage trade (Metzger, 2020). The WTO agreement, therefore, only allows countries to introduce the changes slowly, through what is termed as ‘progressive liberalization’. However, unindustrialized states are normally granted longer to accomplish their requirements.
Since the creation of the GATT in the year 1947, on the welfare grounds, a free trade arrangement can yield no benefits that are not particularly achievable under customs union, and can additionally generate welfare costs that are never incurred under a customs union. The Free Trade Area agreement is one of the privileged arrangements in the tariff rates among its members are zero; however, those exterior tariffs may be at different rates for diverse members of the mechanism (de Oliveira, 2018). On the other hand, Customs union is one agreement in which there is completely zero duty between its members on the importation of goods and services and one standard external tariff.
Question 2
Achievements of the 2019 Nobel Prize laureate in Economics
The 2019 Nobel Prize laureate in economics has dramatically changed the culture of economics, particularly development economics. It has significantly helped to change those deep assumptions about how people make those decisions and about what economic development is. It altered ways in which many expansion economists work, the kinds of individuals they work with and their places of work. Primarily, there were no specific applications of interactive economics in many unindustrialized countries (Misra et al., 2019). They carefully demonstrated the value of applying the central ideas from behavioural economics. Their work, therefore, made promising tremendous advancements in the real world strategies to balance people’s biases in ways that shaped their lives look much better. The influence that the experimental approach can make it to economies was often misunderstood until their work. The work of Duflo, Kremer and Banerjee has now changed the lives of many expansion economists. Initially, economists used to work mainly on their own, however far many of the development economists are currently working with several people and with other non-governmental groups and even private firms.
Secondly, regardless of the most current intense improvements, one of humanity’s most urgent issues is global poverty reduction. The Laurates have significantly introduced a fresh approach to gaining the most reliable answers about the best way of fighting global poverty (Ho et al., 2019). In short, it involves the division of this matter into smaller and more controllable questions- for instance, the most active involvements for refining educational results or child health. They have clearly shown that these more modest and more exact questions usually are best answered by prudently designing experiments among the people most affected.
Question 3
The three significant means through which multinationals are using to shift profit or avoid tax in the high tax countries includes debt shifting, registration of intangible assets and strategic transfers pricing.
- Debt shifting
This often occurs when a company’s borrows money from another company’s and pas interested in this loan to the second company. The involved payments are often considered as the cost of a company’s, and the tax is deductible in countries such as in Australia, they have in this case significantly reduced the profits that a company reports while at the same time increasing the profits that are reported in another region.
- Registration of intangible assets
The other channel that multinationals use is the transfer of unstable assets. In this process, intangible assets such as copyrights and trademarks are registered and termed as assets within the company which are taxed. And can artificially lower the taxes. Registration of intangible assets means that the company is considered to be having a larger asset base which ends up attracting relatively lower taxes.
- Strategic price transfer
Strategic pricing transfers is their channel use by multination corporation tin evading tax. In the channel, a company trading with another can apply what most countries uses called the arm’s length principle. This means that the price should often beset the same as they would be if two non-associated entities trade with each other. This expect helps the companies involved in lowering the amount of text that they pay. In practice, it is often tricky determining the arms’ length and is a considerable space for multination to set the price in a manner that minimalizes their overall tax liabilities.
Question 4
Kodak failure
Kodak’s failure has its roots in its success which made the company much resilient to change. The company’s inward-looking corporate values believed that the company’s strong point was wholly in its brand and marketing, and this undervalued the threat to digital. The visionless faith that the company had in its marketing ability in overcoming the threat from the new technology significantly proved disastrous. Therefore, Kodak failed to adapt to a new marketplace and new customer attitudes. Secondly, Kodak was overtaken by the Japanese Fujifilm due to stiff competition. According to McGrath, the competitive environment is in continuous motion, and several forces have openly come together to make the winning chances more visible to more companies. The kind of resources required to go after them is more available, too (Moon 2019). These dynamics made it hard for the Kodak Company to hang on to the competitive advantage for a long time and was therefore overtaken by Fujifilm.
Nokia failure
Nokia failed to adjust to change, lacked a proper strategic plan and repositioning. However, high completion in the industry led to the failure of Nokia, and the mobile phone industry became more saturated with many companies serving the same target market. Companies like Samsung, Apple, and Blackberry overpowered Nokia because it did not improve its services and therefore lost to other players in the market (Ciesielska, 2018). According to McGrath, companies should look at whether they have new competitors emerging from unexpected places, or those companies that are keenly showing interest in what they are doing. Nokia did not see this and got overtaken by the players. The management failure where Kodak and Nokia fall into is Laggard, and these companies were once industry leaders. Still, they failed just because they were unable to adapt to the changing market environments. They were jammed in their identity of being leaders even as their dominance and supremacy were slipping away.
Question 5
Supply chain risk management
According to McKinsey unknown risks by their nature are very difficult and impossible to predict or to quantify. It is also hard to incorporate them into the risk management framework. Therefore. Unknown risks mitigation can best be achieved through the creation of strong defences that are joined with building a risk alert culture (Chu et al., 2020). With the outbreak of COVID-19 global companies are questioning on how to assess and manage the risk and organize their supply chains appropriately. According to McKinsey, the degree of professionalization of supply risk management widely differs. Several companies are following a more-reactive tactic in reacting to disruptions in the supply chain. Companies should, therefore, diversify their jobs and in-turn implement multi-sourcing approaches wherever possible and economically acceptable (Brindley, 2017). By working together with the suppliers and performing regular supplier assessments as part of their overall business exercise.
The innovative companies should have stable supply-chain risk management crews and procedures put in place, the information flow between marketing and Information Technology (IT) and the supply chain risk management should be appropriately established with clear boundaries. In the case of disruptions or disasters like the COVID-19, the crews can exchange information and react very promptly (Chu et al., 2020). Companies should also always observe the events and trends that are likely to cause disturbances in the universal supply chain. Lastly, thy should work in increasing transparency all over even multitier supply chains with the supply chain risk management leaders setting up a catalogue of suppliers across levels.
Question 6
Globalization marketing strategy
The thriving nature and success are in various products are traced to the fact most consumers if not all are more or less the same, all over the world. This is realized irrespective of cultural difference, as T. Levitt defines it. He considers MNC’s strategy of marketing as a disadvantage to global market growth. According to T. Levitt, there is only force putting the world as one, the energy, is none other the technology. The technology he believes has taken over the mode of communication and movement. He believes that technology has resulted in a new reality in a commercial. The business firms working in the direction of this reality are greatly advantaged in areas such as how the business is managed, the distribution of products, production as well as marketing. If the advantages are converted to the decreased world prices, they indeed carry over the MNC’s believed firms on how the world is progressing
It is in the past that there was a margin in customs both in national and regional likes. It is also in the past that a company was likely to sell the previous year’s model products to the market quickly the MNC’s strategy purports. The prices that were initially having a great margin with broad prices exaggerated as opposed to homes are no longer in place. What is in place currently is the globalization of markets. To this, it states that MNC’s is nearing to its diminish. It is in conclusion that the multinational and the global corporation are far apart to two different things. The multinational is found working in numerous nations with the cost extremely high as opposed to the worldwide corporation which has been constant in its operation at a low price selling the same commodity using the same strategy all over.
Question 7
The critical view of IMF bailout package so far
Introduced in the year 1944, the International Monetary Fund has, indeed made several implications as the spearhead for the global monetary system. Its existence has been of great impact to the nations doing business to each other. Just like any other body, the IMF has been on two ends of criticism as well as gaining praises for its effort to ensure financial stability. With the range of criticism which is majorly looked at on the terms of its loans, it has also received criticism in deficiency in accountability and failure to lend the nations that their human rights records are not good. Some of the criticisms of IMF are:
- Loans terms
To provide loans to countries, IMF has a condition to meet which is based on some economic policies involving a reduction in governments borrowing is rather the taxes should be higher than spending, they also consider the stabilization of the currency by imposing higher interest, the firms that are failing the firm is allowing to bankrupt. These policies can make cumbersome economic situations fall. For instance, in the 1997 Asian crisis, many countries were that are unable to meet the policies did experience slowdown hence very high unemployment.
- Exchange rate reforms
With their intervention in various countries in the 1990s, it led to the removal of the controls overflow of capital by the central banks. This is argued to have created avenues to corrupt leaders who quickly could transfer money out of the economy (Goldenberg scandal, BBC link). It was further argued that the IMF did fail in understanding the various dynamics in its countries of operations.
- Lack of transparency and involvement
It has been highly criticized for not consulting the affected countries while imposing their policies. The example was evident in Korea when the IMF insisted that those who were viewing for the presidency to endorse an agreement that they had no or little knowledge about. IMF has been on the criticism end since its inception with numerous highlights on its operation.
References
Ho, M. T., & Anh, H. H. (2019). Out, standing in the field to alleviating global poverty: 2019 Nobel Prize in Economic Sciences.
Misra, S. N., & Ghadai, S. K. (2019). Nobel prize for poor economics. Parikalpana: KIIT Journal of Management, 15(1and2), 1-8.
de Oliveira, W. V. (2018). UNDERSTANDING THE MOST-FAVORED-NATION CLAUSE IN THE INTERNATIONAL INVESTMENTS LAW. Revista de Direito Internacional Econômico e Tributário, 12(2 Jul/Dez), 282-300.
Metzger, S. D. (2020). Most-Favored-Nation Treatment of Imports to the United States from the USSR. Denver Journal of International Law & Policy, 5(3), 8.
Brindley, C. (Ed.). (2017). Supply chain risk. Taylor & Francis.
Chu, C. Y., Park, K., & Kremer, G. E. (2020). A global supply chain risk management framework: An application of text-mining to identify region-specific supply chain risks. Advanced Engineering Informatics, 45, 101053.
Ciesielska, M. (2018). Nokia on the slope: The failure of a hybrid open/closed source model. The International Journal of Entrepreneurship and Innovation, 19(3), 218-225.
Moon Jr, P. T. (2019). Missed Moments: Kodak’s Failure to Define the Consumer Market for Digital Photography.