Global Business, Tutorial Questions Week 3

1. Low-wage countries can make same amount of output at cheaper price than developed nations, in results, developed nations usually import goods from Low-wage countries. This is good for consumers from developed nations. But this is bad for businesses from the developed nations that produce the same type of goods imported from Low-wage countries. This may force businesses to close which then lead to unemployment. Therefore unions usually oppose imports from Low-wage countries. and demand for advocate trade barriers. Unfair trade competition usually refers to the super-cheap products made by those Low-wage countries as opposed products by developed nations. I would say there is no such thing as unfair competition. The reason why I am saying this is because one countries import is another countries export, if we stop the import that would decrease the export for the other country which results in increase in unemployment. These countries already work for a very low wage and take that away would create poverty. To overcome this situation what the developed countries should focus on is things that can not be provided from the low wage countries. Examples for that could be service, tourism and so on which only people from the developed countries can control. All countries have their strengths, instead of exploiting and put barriers for import, should develop what the advantages of the developed country is. For those countries that export, their strength is cheap labour. I believe the argument has best interest for the unions and the people they represent. Because the import affects only the businesses that produce the same product at a higher price, not the whole nation.

2. Using the Porter’s theory of national competitive advantage the government should build the following policies for each point:

- Factor endownments : a nation’s position in factors of production such as skilled labour or the infrastructure necessary to compete in a given industry.

- Demand...