International Simulation

The international simulation report is a compilation of the findings and outlines that reflect advantages and limitations of international trade as a whole. In reviewing the international trade simulation we can find that there are four distinct points that represent the elements that make up the report. I will be reviewing each point in depth along with providing a compare and contrast of the influences and advantages. I will finally conclude with a discussion that sheds light on the issues surrounding the international trade report and provide a summery. We know that all countries depend on international trade for some aspect of survival. Different countries and nations have fluctuating production levels of goods and services that
they are able to produce. The other notable difference of each country is the amount that they will charge for the price of a good or service. These kinds of assets tend to fluctuate greatly from place to place. We see that countries will utilize and even manipulate their own goods and services in order to make them a resource that is considered an asset so that they can resource it out as needed for profit. If a country is able to maintain minimal costs for a resource, a nation will export these assets with a low cost of production price and then turn around and import additional assets of higher value. (Hubbard & O’Brien, 2010). Enforcement needs to be in place for trading to guarantee the laws are followed and enforced. We see that international trade has both advantages and disadvantages. Most countries try to work within these limitations to ensure a profitable trade. The objective of profit can be met if a country works within its fiscal budget to develop fair and equitable trade with amongst other nations.

There is a wide range of advantages associated with the international trading of goods and services.
There is emphasis placed on the future and looking at potential future trade and markets. Other areas of advantage in international trade include the potential investment opportunities. Investment opportunities have the ability to create employment that will stimulate the nation’s economy. This will create revenue from taxes and business start up fees within the country of origin. This promotes a sustainable trade system within each nation when done correctly. The simulation that was reviewed discussed several scenarios in order to communicate the four key economic points. These are: International Trade, Comparative Advantage, Opportunity Cost, and Free Trade Agreements. When dealing with any kind of international trade scenario these key points become critical in their ability to influence the outcome of the concepts. The different scenarios that involved international trade discussed the importance of trade as an aid in development. This is done by allowing countries with significant poverty to use the technology and markets that are larger. We saw that the simulation provided examples of the use of tools for international trade, such as taxation, quotas, and profit. By using taxation of tariffs we can see that the countries are able to monitor the use and trade theories. This is useful in monitoring the “dumping” of products which creates a negative effect on the economy due to the loss. In reviewing of the comparative advantage we see visualize what each country has the ability to provide which could in turn lower the cost This is done by the review of economic practices of each country. By identifying the weaknesses of the international trade we can see how the importing of goods could create its own deficit. This is when the practice of taxes, tariffs and quotas are imposing to prevent such staggering
losses. Foreign exchange rates have long been a significant influence factors on trade. This has to do with the supply and demand theory and how it affects currency. We see the capital movements and investments can be made internationally with the direction in the disguise of a foreign direct investment. These foreign institutional investments will have a direct effect on exchange rates throughout the world. We can also see that price changes also have the ability to affect the exchange rate with a specific amount of supply and demand correlated with the current inflation or perhaps deflation the market will take the hit. Finally, we see that speculations made by countries as to the financial market and future exchange rates can provide for inaccurate information and forecasting in the international trade process. The strength of any countries economy can stay strong if they practice the comparative aspects of trade. We must take in to account that each government policy has the ability to directly influence the rates, banks, fees and market conditions. We see this influence in a similar avenue such as the stock market and political factors such as trade embargos. NFTA stands for the North American Free Trade Agreement and this is something that can directly affect the trading in countries. It is used as a tool in the economic and has not always been welcomed favorably because of its ability to remove some jobs away from the United States. We have historically seen that there are specific countries or nations that have decided to not follow the agreements set in place. This allows for poor quality products that are dangerous not only to our economy but to our community. We have seen a responsible response from NAFTA as it continues to improve health and safety codes which are important and a key factor in fair and equitable trade. In conclusion we have seen situations where the imposed restrictions have both helped and hurt the nations in trading. The help far outweighs the hurt in these instances. It is a vital part of trade to have these rules in place so that we can try to monitor the specifics of trade and supply that are being contributed by each country. The imposed restrictions are fair and can be equitable to all trading entities if used accordingly and consistently. I have reviewed the International Trade simulation and engaged the discussion of the importance of advantages and disadvantages that are associated in the use of international trading. The limitations discussed are a key factor in determining what can be done and by whom. It is not only the large profitable countries that participate in trade it is also the small underdeveloped nations that have something to contribute but need to play by the rules imposed. We have reviewed the absolute and comparative advantages and how they pertain to fair International Trade. We have looked at the influence factors on foreign exchange rate and the affects on goods and services being offered. A significant portion of any trade between countries is a needed commodity and must be ruled with a fair process to allow and ensure safe, profitable, and fully disclosed trading practices.