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Causes of unfair Trade - Coggle Diagram
Causes of unfair Trade
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Balance of trade
Trade imbalance causes unfair trade by causing trade deficit which then reduces the incomes of domestic workers, pushing many people to lower income.
By consuming less and save more, depreciate the exchange rate and tax capital inflows, trade imbalance/deficit can be reduced
World market
Developing countries are sometimes locked into unfair trading agreements with larger companies and multinationals. So they can't afford to withdraw as multinationals can easily take their businesses or market elsewhere.
BY avoiding making false news about prices of products and goods. also avoiding unfair business tactics in big markets, there will be fair trade in the globe.
Tariffs
Tariffs cause unfair trade by increasing the prices of imported goods. So domestic consumers will be left paying higher prices as a result.
Solutions to tackle tariff increases include exploring new markets, raising prices where necessary...
Dumping
Dumping can push producers and manufacturers in the foreign(importing) country out of business, which can result in loss of jobs and higher unemployment.
According to usacustomsclearance.com, the most reliable way to avoid dumping is to consult with a licensed customs broker prior to make an international purchase.
Trading bloc
Trade blocs do not promote global trade, which contradicts importing and exporting to other countries. As a result, it leads to unfair trade because exporting countries lose the opportunity to sell their goods to other countries, lowering their income.
The WTO appoints a panel to hear a case if the opposing parties are unable to solve the problem through negotiations.
Globalisation
Globalisation affects trade by resulting in greater trade in financial services through both capital flows and created-borders entry activity.
By prioritising people-centred growth, fighting the dark side of globalisation, building more global value chains(GVC's), supporting medium, small and micro-enterprises can be implemented to solve problems regarding globalisation and unfair trade.