Google Answers Logo
View Question
 
Q: international trade relations ( No Answer,   2 Comments )
Question  
Subject: international trade relations
Category: Business and Money > Economics
Asked by: ola2-ga
List Price: $10.00
Posted: 12 Oct 2002 22:34 PDT
Expires: 11 Nov 2002 21:34 PST
Question ID: 75949
comparative advantage in southern africa custom union. Look into current
statistics and revenue allocation
Answer  
There is no answer at this time.

Comments  
Subject: Re: international trade relations
From: bluebeard-ga on 17 Oct 2002 08:29 PDT
 
What you have asked isn't even a question. Could you try a little
harder when phrasing it?

I will assume you are asking about customs unions, and I will contrast
this to a free trade bloc.

A customs union is where nations can trade freely with one another,
but may have their own tariff rates. A free trade bloc has free trade,
but has one common tariff for the whole bloc.

A customs union is politically easy, but an administrative nightmare.
Nations simply sign, and the union is born. But if country A has a 50%
external tariff, and B has a 2% external tariff, what is to stop firms
from importing into B, and transporting into A? In order to maintain
the 50% tariff rate, border patrols must exist. But there are further
complications. What if some of a good in B was produced locally, and
the rest produced outside the union? When does a locally produced good
stop being a locally produced good?

A free trade bloc is much simpler. Internally, there is no barrier.
Externally, the tariff barrier is the same. So it doesn't matter if a
good is imported into A or B, there is no incentive for taxation
arbitrage. However, it is politically difficuly because of the
surrender of national sovereignty to a supernational body, the trade
bloc.

Unfortunately, your question mentions only South Africa, which can't
form either a customs union or a free trade bloc with itself. Do you
mean the rest of Africa? As I understand it, very few statistics are
available for what occurs in Africa.

Please be more specific.
Subject: Re: international trade relations
From: ola2-ga on 17 Oct 2002 11:01 PDT
 
Thank you for your response. please look at the question again. I have
asked about the southern africa custom  union: how does not the law of
comparative advantage explain the trade relation. please note that the
southern africa custom union is made up of south africa, lesotho,
botswna, zimbabwe and swaziland.
thank you.

Important Disclaimer: Answers and comments provided on Google Answers are general information, and are not intended to substitute for informed professional medical, psychiatric, psychological, tax, legal, investment, accounting, or other professional advice. Google does not endorse, and expressly disclaims liability for any product, manufacturer, distributor, service or service provider mentioned or any opinion expressed in answers or comments. Please read carefully the Google Answers Terms of Service.

If you feel that you have found inappropriate content, please let us know by emailing us at answers-support@google.com with the question ID listed above. Thank you.
Search Google Answers for
Google Answers  


Google Home - Answers FAQ - Terms of Service - Privacy Policy