International Trade System

Trade system concerns recognizing obstacles and opportunities for US firms abroad. Companies might investigate tariffs (taxes on imported goods), quotas (which limits import amounts), and other obstacles like non-tariff barriers that can affect ability to compete.

1. The common Agreement on Trade and Tariffs - GATT: It is a 45-year-old treaty designed to endorse world trade by dropping tariffs and other international trade barriers.
2. Regional Free Trade Zone: Definite countries have composed free trade zones or economic communities-groups of nations prepared to work toward general goals in the regulation of international trade. One such type of community is the European Community (EC)

When selling aboard, the firm faces many restrictions. Examples are following:

1. A tariff is a tax levied by a government against definite imported products, which is designed to grow revenue or to defend domestic firms. It is the most common barrier.  The tariff can be designed either to increase revenue or to protect domestic firms.
2. A quota is a restriction on the amount of goods that an importing country will accept in definite product categories.  It is designed to protect on foreign exchange and to protect local employment and industry.
3. An embargo is a ban on the import of a definite product (the powerful form of quota).
4. Exchange controls are restrictions placed by a government on the amount of its foreign exchange with other several countries and on its exchange rate against other countries.
5. Non tariff trade barriers are no monetary barriers to foreign manufacture, like biases against a foreign company's bids or manufacture standards that go against a foreign company's manufacture features.