Monday, June 25, 2012

How unrelated events can lead to unintended barriers to trade?

We live in a world with many and different cultures and in which each country has their own political arrangements and governments and, consequently, their own internal policies and regulations. Political instability, crime, illegal migration, food prices, monetary policies and safety regulation are factors that lead to unintended barriers to trade, affecting various countries and companies who depend on their daily exportation/importation.

There are also other unrelated events such natural disasters or war on terror. In these cases, nations and most important, companies who depends on their daily production should be prepare and have other options worldwide, such as having plants in other countries and not be dependent on their production in only one territory. As an example for this case was the Japanese Earthquake where many companies had to shut down temporarily their plants due to the disaster occur in the country. This affected their market share and most important their revenue.

Along the time, there will be unintended barriers due to so many changes in an economic, cultural and political manner between nations. It is important that companies and countries have multiple options to trade worldwide so that these unintended barriers don’t affect them in a drastically way.






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