THE COPPERBELT UNIVERSITY

SCHOOL OF BUSINESS
CHITI MWAMBA 19140041
KUNDA NG’ANDWE 19137215
MARTHA MOONGA 19137773
PETER MWILA 19133977
SNATRA NKANDU 19135749
MUNKOMBWE KAFUPI 19134847
STANSLOUS MULENGA 17116169
ZALIWE BANDA 19135872
JOSHUA MWENYA 19134683
SHANSOWA SHANZAMBWA 19137107
PROGRAM: BUSINESS ADMINISTRATION
COURSE: INTERNATIONAL BUSINESS
CODE: BS 416
LECTURER: DR EDNA LITANA
TASK: GROUP ASSIGNMENT 1
DUE DATE: 24TH JULY 2023
QUESTION: IDENTIFY THE STRATEGY OF THE FIRM AND
ACCOUNT FOR A POLITICAL ECONOMY OF
INTERNATIONAL TRADE.
Table of Contents
1.0 Introduction ............................................................................................................. 1
2.0 Understanding the Firm's Strategy ........................................................................ 1
2.1 The two-value chain ............................................................................................... 1
2.1.1 Primary Activities ............................................................................................. 2
2.1.2 Supportive Activities ........................................................................................ 2
3.0 Types of Strategies ................................................................................................. 3
3.1 Global Standardization Strategy ............................................................................ 3
3.2 Localization Strategy .............................................................................................. 4
4.0 Analyzing the Political Economy of International Trade ...................................... 5
4.1 Administrative Policies ........................................................................................... 5
4.2 Anti-dumping Policies ............................................................................................ 6
4.3 Subsidies ............................................................................................................... 6
4.3.1 Direct Cash Subsidies ..................................................................................... 7
4.3.2 Tax Subsidies .................................................................................................. 8
4.3.3 Price Subsidies ................................................................................................ 8
4.3.4 Production Subsidies ....................................................................................... 8
4.3.5 Export Subsidies .............................................................................................. 8
4.3.6 Research and Development (R&D) Subsidies ................................................. 9
4.4 Tariffs ..................................................................................................................... 9
4.4.1 Import Tariffs.................................................................................................... 9
4.4.2 Export Tariffs ................................................................................................... 9
4.4.3 Specific Tariffs ............................................................................................... 10
4.4.4 Ad Valorem Tariffs ......................................................................................... 10
5.0 political economy and shaping international trade ............................................ 10
5.1 Import Quotas ...................................................................................................... 11
5.2 Voluntary Export Restraints (VERs) ..................................................................... 11
5.3 Local Content Restrictions ................................................................................... 11
6.0 The Case for Government Intervention ............................................................... 12
6.1 Political Arguments for Intervention ..................................................................... 12
 6.2 Protecting Jobs and Industries ............................................................................. 13
6.3 Protecting National Security ................................................................................. 13
6.4 Retaliating ............................................................................................................ 13
6.5 Protecting Consumers.......................................................................................... 14
6.6 Furthering Foreign Policy Objectives ................................................................... 14
6.7 Protecting Human Rights ..................................................................................... 14
6.8 Economic Arguments for Intervention .................................................................. 14
6.8.1 The Infant Industry Argument ........................................................................ 15
6.8.2 Strategic Trade Policy .................................................................................... 15
7.0 Arguments Against Government Intervention .................................................... 15
7.1 Free Market Efficiency ......................................................................................... 15
7.2 Individual Freedom and Liberty ............................................................................ 16
7.3 Innovation and Entrepreneurship ......................................................................... 16
7.4 Moral Hazard ....................................................................................................... 16
7.5 Inefficiency and Bureaucracy ............................................................................... 16
7.6 One-Size-Fits-All Solutions .................................................................................. 16
7.7 Regulatory Capture .............................................................................................. 16
8.0 Conclusion ............................................................................................................. 17
9.0 References ............................................................................................................. 18
 1.0 Introduction

International business looks at firms that have business activities operations and
transactions that are spread over several countries. It is an important concept of the
global economy allowing companies to specialise in producing goods and services
while assessing products and services they lack. International business is facilitated
by imports and exports between countries, leading to increased economic
interdependence and cooperation on a global scale (Johnson et al., 2017).

The firm's strategy refers to the comprehensive plan and set of actions undertaken
by an organization to achieve its goals and objectives. It involves making choices
about resource allocation, market positioning, and competitive advantage.
Simultaneously, the political economy of international trade encompasses the
interplay between political and economic factors that shape the global trading
environment.

To analyze the firm's strategy and its account for the political economy of international
trade, we must consider how the firm's strategic decisions align with the external
factors that influence international trade.

2.0 Understanding the Firm's Strategy

Understanding the firm's strategy is crucial for its success and long-term
sustainability. A firm's strategy refers to the set of actions and decisions taken by the
organization to achieve its goals and objectives, considering the internal strengths
and weaknesses, as well as external opportunities and threats in the business
environment. For most firms a long-term goal means maximizing profits and for them
to maximise profits there are operations that firms undertake. A firms operation can
be broken down into two distinct value creation activities known as the two value
chains.

2.1 The two-value chain

The concept of a firm as a value chain was introduced by Michael Porter, a renowned
economist and professor at Harvard Business School (Mind Tools, 2023). The
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 operations of a firm can be thought of as a value chain composed of a series of
distinct value creation activities including production, marketing and sales, materials
management, Research and Development (R&D), human resources, information
system, and the firm infrastructure (Golden and Powell, 1999). A firm's operations
can be broken down into a series of distinct value-creation activities, which can be
categorized into two main types: primary activities and supportive activities.

2.1.1 Primary Activities

Primary activities are the core activities directly involved in the creation, production,
and delivery of a product or service. These activities are essential for adding value
to the final product (Mind Tools, 2023). There are several primary activities in the
value chain the following are some of them:

i. Inbound Logistics: This involves the receipt, warehousing, and inventory

management of raw materials or components needed for production.
ii. Operations: The operations stage includes the actual manufacturing or
production process where raw materials are transformed into finished goods.
iii. Outbound Logistics: This step involves the storage and distribution of the
finished products to customers, wholesalers, or retailers.
iv. Marketing and Sales: Activities related to marketing, advertising, and selling
the product to potential customers.
v. After-sales Service: This stage focuses on providing customer support, and
warranty services, and addressing any issues that arise after the sale to
ensure customer satisfaction and loyalty.

2.1.2 Supportive Activities

Supportive activities, also known as secondary or enabling activities, are not directly
involved in production but play a crucial role in supporting and enhancing primary
activities. Some of the supportive activities in the value chain are as follows:

i. Procurement: This involves the process of sourcing and acquiring the

necessary inputs, such as raw materials, equipment, and services, for the
primary activities.
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 ii. Technology Development: Activities related to research and development,
innovation, and the implementation of technology to improve product quality,
processes, and overall efficiency.
iii. Human Resource Management: This includes activities related to recruiting,
training, and retaining skilled employees, as well as managing their
performance and development.
iv. Firm Infrastructure: These activities are concerned with the overall
management, planning, finance, accounting, and other administrative
functions that support the entire value chain.

By analyzing the primary and supportive activities in a firm's value chain, managers
can identify areas where value is added and where costs can be optimized, leading
to improved overall performance and competitive advantage (Madamba, 2023).

3.0 Types of Strategies

Among various strategies, there are two main strategies that a firm can use these
are global standardization and localization strategy.

3.1 Global Standardization Strategy

A global standardization strategy is an approach used by multinational companies to

streamline their products, processes, and marketing efforts across different countries
and regions.

The primary goal of this strategy is to achieve cost efficiencies, enhance product
consistency, and create a unified brand image worldwide. By standardizing key
aspects of their business, companies can reduce complexities, simplify operations,
and facilitate international expansion.

The key elements of global standardization strategy

Product Standardization: This involves offering the same or similar products across
various markets with minimal adaptions. Companies design products that can meet

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 the needs of a broad range of customers globally, avoiding costly customization for
different regions.

Marketing Standardization: Businesses employing a global standardization

strategy tend to keep their marketing efforts consistent across markets. They use
universal themes, messages, and promotional materials that resonate with a diverse
audience.

Process Standardization: Streamlining internal processes and operations helps

reduce costs and enhances efficiency. Companies adopt standardized systems and
procedures for manufacturing, supply chain management, and other operational
aspects.

Branding: A standardized global brand image ensures that consumers recognize

and trust the brand across different countries. Companies often use consistent logos,
slogans, and visual elements in their marketing campaigns to create brand
consistency.

Economies of Scale: By standardizing products and processes, companies can

achieve economies of scale, allowing them to produce and distribute goods more
cost-effectively.

3.2 Localization Strategy

Localization strategy is used by multinational companies to tailor their products,

services, and marketing efforts to meet the specific needs and preferences of local
markets. Unlike a global standardization strategy that emphasizes uniformity, a
localization strategy focuses on adapting the company’s offerings to fit the unique
characteristics of each target market.

The key elements of localization strategy

Product adaptation: Companies adjust their products or services to cater to local

tastes, cultural norms, and preferences. This may involve modifying features,
packaging, sizes, flavours, or even the product's core functionality.

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 Marketing Localization: Businesses tailor their marketing and advertising
campaigns to resonate with the local audience. This includes using culturally relevant
messages, languages, imagery, and promotional channels that are popular and
effective in the specific region.

Pricing Strategy: Companies consider local economic conditions, purchasing

power, and competitive landscape to set appropriate pricing levels for their products
and services in each market.

Distribution Channels: Companies may adapt their distribution and sales channels
to align with the local market’s infrastructure and consumer behaviours. This might
involve partnering with local retailers or e-commerce platforms or adjusting the
supply chain to meet local demands efficiently.

Testing and feedback: Conduct thorough testing of localized products or services

to identify and address any issues specific to each market. Encourage feedback from
local users to continuously improve the offering.

4.0 Analyzing the Political Economy of International Trade

Analyzing the political economy of international trade involves examining the

interplay between political and economic factors that influence the patterns, policies,
and outcomes of trade between nations. It is a multidimensional analysis that takes
into account the following key aspects:

4.1 Administrative Policies

Administrative policies refer to a wide range of regulations, procedures, and

bureaucratic requirements that governments impose on imports and exports. These
policies are aimed at protecting domestic industries, ensuring product safety, and
maintaining national security. Administrative policies benefit producers and hurt
consumers, who are denied access to possibly superior foreign products (Technical
Information, 2023).

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 Governments can protect domestic industries by setting a limit on the number of
goods that can be imported into a country (Administration, 2023). This restriction
aims to protect domestic industries from foreign competition and encourage the
consumption of locally produced goods. For instance, China imposed import quotas
on automobiles to protect its domestic automobile industry.

4.2 Anti-dumping Policies

Dumping refers to the practice of selling goods in a foreign market at a price below
their production cost or below the price in the domestic market. Anti-dumping policies
are designed to protect domestic industries from the negative effects of unfair
competition.

Dumping is viewed as a method by which firms unload excess production in foreign

markets. Some dumping may be the result of predatory behaviour, with producers
using substantial profits from their home markets to subsidize prices in a foreign
market to drive indigenous competitors out of that market. Once this has been
achieved, the predatory firm raises the prices and earns substantial profits
(Administration, 2023).

To protect domestic producers, governments may impose additional duties or tariffs

on imported goods that are deemed to be dumped. This makes the imported goods
more expensive and helps level the playing field for domestic producers. For
example, the United States imposed anti-dumping duties on imported steel from
certain countries to protect its domestic steel industry.

4.3 Subsidies

According to IMF et al., (2022), Subsidies are often implemented to achieve specific
policy goals, such as stimulating economic growth, promoting domestic industries,
ensuring food security, reducing poverty, fostering innovation, or addressing
externalities like environmental concerns. However, subsidies can also have
unintended consequences, such as distorting markets, creating inefficiencies, or
favouring certain groups over others.

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 Subsidies are financial or other forms of support given by the government or an
organization to individuals, businesses, or industries to encourage or assist them in
achieving certain goals or outcomes. These goals can vary and may include
promoting economic growth, supporting specific industries, encouraging innovation,
or addressing social or environmental concerns.

Subsidies are typically provided in the form of direct payments, tax breaks, reduced
interest rates on loans, price supports, grants, or other forms of financial assistance.
The purpose of subsidies is to make certain goods or services more affordable,
incentivize production or consumption, or provide a competitive advantage to
recipients (Georgetown Law, 2023).

Subsidies can be found in various sectors, such as agriculture, energy, education,

healthcare, housing, transportation, and research and development. For example,
agricultural subsidies may be provided to farmers to stabilize their income, promote
food security, or encourage the production of specific crops. In the energy sector,
governments may offer subsidies to promote the use of renewable energy sources
or to make energy more affordable for consumers.

While subsidies can be beneficial in achieving specific objectives, they can also have
drawbacks. They can create market distortions, promote inefficiencies, and lead to
unintended consequences. The allocation of subsidies may be subject to debate and
scrutiny, as different stakeholders may have different views on their necessity,
effectiveness, and fairness.

Types of subsidies

Several types of subsidies can be categorized based on their purpose and how they
are provided (Clements and Parry, 2018). Here are some common types of
subsidies:

4.3.1 Direct Cash Subsidies

This type of subsidy involves the direct transfer of cash from the government to
individuals, businesses, or organizations. It can be in the form of grants, allowances,
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 or income support. Direct cash subsidies are often provided to low-income
individuals, families, or specific sectors to alleviate financial burdens or promote
certain activities.

4.3.2 Tax Subsidies

Tax subsidies are granted through the tax system by allowing deductions,
exemptions, or credits that reduce the amount of taxes owed. These subsidies can
be used to incentivize certain behaviours, such as investment in research and
development, energy efficiency, or job creation. Tax breaks for specific industries or
activities are also a common form of subsidy.

4.3.3 Price Subsidies

Price subsidies involve the government providing financial assistance to reduce the
cost of goods or services for consumers. This can be done by subsidizing the
production, distribution, or consumption of certain products. For example,
governments may subsidize essential commodities like food, fuel, or housing to make
them more affordable for the general population.

4.3.4 Production Subsidies

Production subsidies are aimed at supporting specific industries or sectors.

Governments provide financial assistance to producers or businesses to encourage
production, boost competitiveness, or promote domestic industries. These subsidies
can take various forms, such as direct payments, grants, or reduced costs for
resources or inputs.

4.3.5 Export Subsidies

Export subsidies are provided to businesses or industries to enhance their

competitiveness in international markets. They can include direct financial
assistance, tax incentives, or insurance programs that reduce the costs of exporting
goods or services. Export subsidies aim to promote exports, expand market share,
and stimulate economic growth.

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 4.3.6 Research and Development (R&D) Subsidies

R&D subsidies are designed to encourage innovation and technological

advancements. Governments may provide funding or tax incentives to support
research and development activities conducted by businesses or institutions. R&D
subsidies aim to foster discoveries, improve competitiveness, and drive economic
progress.

These are just a few examples of the types of subsidies that exist. Subsidies can
vary widely depending on the country, sector, and specific policy objectives. The
design and implementation of subsidies are influenced by the priorities and goals of
the government or organization providing them.

4.4 Tariffs

Tariffs are taxes or duties imposed on goods and services when they are imported or
exported between countries (IMF et al., 2022). They are a form of trade barrier and
are typically levied by the government to regulate international trade, protect
domestic industries, generate revenue, or address other policy objectives.

Tariffs can be applied in different ways:

4.4.1 Import Tariffs

These are taxes imposed on goods and services that are imported into a country.
Import tariffs increase the cost of imported goods, making them more expensive for
domestic consumers and businesses. The purpose of import tariffs is often to protect
domestic industries from foreign competition by making imported goods less
competitive or to generate revenue for the government.

4.4.2 Export Tariffs

Export tariffs are taxes imposed on goods and services that are exported out of a
country. These tariffs are less common than import tariffs and are usually
implemented to control the export of certain products, protect domestic supply, or

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 generate revenue. Export tariffs can be used to promote domestic production,
discourage the export of critical resources, or influence international prices.

4.4.3 Specific Tariffs

Specific tariffs are fixed amounts of tax imposed on a particular unit of a product. For
example, a specific tariff might be $10 per unit of a specific product regardless of its
price. Specific tariffs are less common and can result in higher relative tax rates on
cheaper goods compared to expensive ones.

4.4.4 Ad Valorem Tariffs

Ad valorem tariffs are taxes imposed as a percentage of the value of the imported or
exported goods. For example, an ad valorem tariff of 10% would result in a tax equal
to 10% of the value of the goods being imported or exported. Ad valorem tariffs can
vary depending on the price and value of the products involved.

Tariffs are often used as a tool in trade policy to protect domestic industries,
safeguard national security interests, correct trade imbalances, or address unfair
trade practices. However, they can also have negative consequences. Tariffs can
increase prices for consumers, limit consumer choices, reduce international trade,
and potentially lead to retaliatory measures from other countries, resulting in trade
disputes or trade wars (Wang et al., 2023).

It's important to note that the implementation and regulation of tariffs vary across
countries and are subject to international trade agreements, such as those
established by the World Trade Organization (WTO).

5.0 political economy and shaping international trade

The political economy plays a significant role in shaping international trade, and
various policy measures can be implemented by governments to influence trade
flows. Three common policy measures in international trade are import quotas,
voluntary export restraints (VERs), and local content restrictions. Let's explore each
of these measures:

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 5.1 Import Quotas

Import quotas are trade restrictions that limit the quantity of a particular good that can
be imported into a country during a specified period. These quotas are typically set
below the level of domestic demand to protect domestic industries from foreign
competition and promote local production. Import quotas are often implemented as
a means of safeguarding domestic jobs and industries, especially in sectors that are
considered strategically important (Takacs, 1977).

While import quotas can help shield domestic industries from foreign competition,
they may also lead to negative consequences. Reduced competition may result in
higher prices for consumers, reduced product diversity, and potential inefficiencies in
domestic production. Moreover, trade partners may respond with retaliatory
measures, leading to trade tensions and conflicts.

5.2 Voluntary Export Restraints (VERs)

Voluntary export restraints, also known as "voluntary export agreements," are

agreements between exporting countries and importing countries where the
exporting country voluntarily limits its exports of specific goods (Santoni et al., 1980).
This measure is often negotiated between governments as a way to avoid the
potential imposition of more restrictive trade measures, such as import quotas or
tariffs.

VERs are usually negotiated to address concerns about a particular industry's impact
on the importing country's domestic market. For example, an exporting country may
agree to limit the volume of its exports of a certain product to a specific destination
to prevent protectionist measures from being imposed by the importing country.

5.3 Local Content Restrictions

Local content restrictions, also known as "local content requirements," are policies
that require a certain percentage of a final product to be produced domestically.
These requirements aim to promote local industries and employment by encouraging
the use of domestic inputs in manufacturing processes. This is often done with the

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 intent of boosting domestic production and supporting local suppliers and
manufacturers.

While local content restrictions aim to foster domestic industries, they can also face
criticism and challenges. These policies may lead to increased costs for businesses,
reduced competitiveness, and potential inefficiencies if domestic inputs are more
expensive or of lower quality than imported alternatives. Moreover, local content
requirements can be perceived as protectionist measures and may lead to trade
disputes with other countries.

Overall, political economy considerations often underlie the implementation of import

quotas, voluntary export restraints, and local content restrictions (Santoni et al.,
1980). Governments need to balance the interests of domestic industries and
employment with potential negative consequences for consumers, trade partners,
and overall economic efficiency. As trade policies evolve, international negotiations
and agreements play a crucial role in managing conflicts and fostering more open
and fair global trade.

6.0 The Case for Government Intervention

Arguments for government intervention take two paths: political and economic.
Political arguments for intervention are concerned with protecting the interests of
certain groups within a nation (normally producers), often at the expense of other
groups (normally consumers), or with achieving some political objective that lies
outside the sphere of economic relationships, such as protecting the environment or
human rights. Economic arguments for intervention are typically concerned with
boosting the overall wealth of a nation (to the benefit of all, both producers and
consumers).

6.1 Political Arguments for Intervention

Political justifications for government action range from preserving jobs to

safeguarding sectors deemed crucial to national security, taking legal action against
unfair foreign competition, shielding consumers from "dangerous" products,

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 advancing foreign policy objectives, and advancing the human rights of people in
exporting nations.

6.2 Protecting Jobs and Industries

The need to preserve employment and businesses from unfair foreign competition is
arguably the most popular political justification for government action. When
exporting nations' governments in some manner subsidise their producers, it is most
frequently seen as unfair competition (Mazzucato, 2013). However, detractors
contend that allegations of unfair competition are frequently exaggerated for political
purposes.

The European Union established the Common Agricultural Policy (CAP) with a
political goal in mind. By limiting imports and securing prices, the CAP was created
to safeguard the livelihoods of Europe's politically influential farmers. However, the
CAP's higher costs have come at a significant cost to European consumers. This is
valid for numerous efforts by the government to safeguard industries and jobs (Autor
et al., 2016). For instance, the introduction of steel tariffs in 2002 increased the cost
of steel for American customers, including automakers, reducing their ability to
compete on the world market.

6.3 Protecting National Security

Some nations contend that because some industries are crucial to national security,
they must be protected (Autor et al., 2016). The defence sector frequently receives
this kind of scrutiny (e.g., aerospace, advanced electronics, and
semiconductors). This argument is still made, even though it isn't as frequent as it
formerly was.

6.4 Retaliating

Some contend that to assist open international markets and compel trading partners
to "play by the rules of the game," governments should threaten to meddle in trade
policy (Bown and Crowley, 2013).

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 Such a politically driven justification for government involvement could, if it succeeds,
liberalise trade and result in economic gains. It's a hazardous tactic, though. When
under pressure, a nation could refuse to give in and instead impose its trade barriers
in retaliation for the application of punitive tariffs.

6.5 Protecting Consumers

Regulations protecting consumers from dangerous items have long been in place in
many jurisdictions (Kaplow and Shapiro, 2007) The importation of such products is
frequently restricted or prohibited as a result of such regulations.

6.6 Furthering Foreign Policy Objectives

Governments occasionally use trade policy to further their goals in foreign policy. A
government may offer favourable trading conditions to a nation with which it hopes
to forge close ties (Irwin, 2017). Additionally, trade policy has frequently been used
to put pressure on or penalise "rogue states" that disregard international law and
standards.

6.7 Protecting Human Rights

Many democracies prioritise defending and advancing human rights in other nations
as part of their foreign policy. Governments occasionally use trade policy to influence
trading partners' human rights practices for the better. Government can intervene in
international trade by imposing import bans or restrictions on goods produced with
forced labour or modern slavery. Such measures prevent the perpetuation of human
rights abuses in global supply chains (Davidson, 2018).

6.8 Economic Arguments for Intervention

Recent years have seen a revival of the economic justifications for government
involvement due to the advent of new trade theories and strategic trade strategies
(Richardson et al., 2014).

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 6.8.1 The Infant Industry Argument

The economic justification for government intervention is by far the oldest in the infant
industry argument. In 1792, Alexander Hamilton made the suggestion. This theory
holds that many emerging nations may have a manufacturing comparative
advantage, but new manufacturing sectors initially cannot compete with well-
established sectors in wealthy nations. The concept is that governments should
temporarily support nascent industries through tariffs, import restrictions, and
subsidies until they have grown robust enough to compete internationally to give
manufacturing a foothold. Over the past 50 years, this justification has found
considerable favour with the governments of developing countries, and the GATT
has acknowledged the infant industry justification as a valid justification for
protectionism.

6.8.2 Strategic Trade Policy

Some new trade theorists have proposed the strategic trade policy argument. We
reviewed the basic argument when we considered the new trade theory (Paul, 1986).
The new trade theory argues that in industries in which the existence of substantial
economies of scale implies that the world market will profitably support only a few
firms, countries may predominate in the export of certain products simply because
they have firms that were able to capture first-mover advantages.

7.0 Arguments Against Government Intervention

Various aspects of society and the economy are often based on principles of limited
government, individual freedom, and market efficiency. Here are some common
arguments against government intervention:

7.1 Free Market Efficiency

Free markets, as opposed to rules and regulations imposed by the government, are
often more effective at allocating resources, according to supporters of limited
government intervention. They think that without excessive involvement, competition
and supply-demand dynamics can produce the best results.

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 7.2 Individual Freedom and Liberty

Many argue that governmental intervention limits people's freedom and agency. They
hold that everyone has the freedom to make their own decisions, even if those
decisions may not line up with what the government deems to be the best course of
action.

7.3 Innovation and Entrepreneurship

Excessive rules, according to opponents of government action, can impede

enterprise and innovation. They contend that less control over company activities
encourages innovation and experimentation.

7.4 Moral Hazard

Moral hazard is the theory that when the government intervenes, it can have
unexpected consequences by protecting people or businesses from the full
repercussions of their conduct. Bailouts of failed businesses, for instance, may
encourage risky behaviour because the businesses know they will be saved if they
run into financial difficulties.

7.5 Inefficiency and Bureaucracy

Government agencies, according to critics, are frequently ineffective and

cumbersome, which causes delays in decision-making and resource waste. The
effective provision of public services can be hampered by this inefficiency, which can
also limit economic progress.

7.6 One-Size-Fits-All Solutions

Government policies often apply broadly to entire populations or industries. Critics

argue that such one-size-fits-all approaches may not consider the diverse needs and
circumstances of individuals and businesses.

7.7 Regulatory Capture

Critics also raise concerns about regulatory capture, which occurs when industries
or special interest groups gain excessive influence over the government agencies

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 that are supposed to regulate them. This can lead to policies that favour these groups
rather than the broader public interest.

8.0 Conclusion

As international trade is not only an economic phenomenon but also a political one.
The interplay between economic interests, political decisions and global dynamics
shape trade policies and can significantly impact the prosperity and stability of a
nation. A firm's strategy in the context of international trade should be informed by
critically analysing the market conditions and competitive advantages it should be
flexible and adaptable to respond to changing market environment. Additionally, firms
need to consider the political economy of international trade including trade policies
to navigate the complex landscape and seize opportunities.

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 9.0 References
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Labor Market Adjustment to Large Changes in Trade.
http://www.nber.org/papers/w21906

BENEDICT CLEMENTS, & IAN PARRY. (2018). What Are Subsidies_ – IMF
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basics

Bown, C. P., & Crowley, M. A. (2013). Import protection, business cycles, and
exchange rates: Evidence from the Great Recession. Journal of International
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Georgetown Law. (2023). - International Trade Law Research Guide - Guides at

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Golden, W., & Powell, P. (1999). Exploring inter-organisational systems and

flexibility in Ireland: a case of two value chains.

IMF, OECD, World Bank, & WTO. (2022). Subsidies, Trade, and International
Cooperation (Vol. 001).

International Trade Administration. (2023a). Trade Guide Anti-Dumping.

International Trade Administration. (2023b). Zambia - Trade Barriers.

Kaplow, L., & Shapiro, C. (2007). Chapter 15 Antitrust. In Handbook of Law and
Economics (Vol. 2, pp. 1073–1225). https://doi.org/10.1016/S1574-
0730(07)02015-4

Madamba, D. (2023). BUSINESS BUSINESS ESSENTIALS Compare Accounts.

Mazzucato, M. (2013). The Entrepreneurial State Debunking Public vs. Private

Sector Myths.

Mind Tools Content. (2023). Porter’s Value Chain - Understanding How Value is
Created Within Organizations.
https://www.investopedia.com/terms/v/valuechain.asp

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