As more and more people are getting fascinated towards the technology and rising modern products the demand for them is also rising because of which many foreign companies have abled to get through the troubles of getting licence in other countries. The role of spreading business and servicing one’s products into another country is known as globalization which is getting very famous in day by day and year by year but as we all know we cannot work only after seeing the positive sides and to do well in every zone it is better to understand the negative sides too. Although globalization is very important in bringing economic stability and reducing number of people under poverty line but will it be okay if we keep on inviting every company? Of course not and this is why government applies trade barriers so that companies that are helpful can only enter in their country’s market.
Generally we keep on blaming our government for not letting foreign companies to enter in our market and also for the high trade barriers and this is because we lag somewhere with the knowledge and advantages of trade barrier. Before going a bit deep let us know what exactly is trade barrier? As the word suggest trade means business and barriers means tax, and together they mean the tax applied on the companies to expand their business in other country. When a company gets settled in another country in order to get as much as market possible it does provide variety to the audience but it also becomes a reason for the local companies to shut their doors and then government has no role over it but if sufficient amount of trade barrier is applied then only big companies and the ones that are useful for the evolution will come and other small or struggling companies won’t come and settle into our country. This way advancement can be taken hand in hand with the economic development as allowing every foreign company will only leads to increase in variety but no change will come in alleviation of poverty rather the gap between the rich and poor will increase.
Trade barrier is not only applied on the companies coming into one’s country rather it is also applied on the local companies that are trying to enter in other countries. Trade barrier helps in simulating the amount of exchange, imagine a situation with no or very mow trade barrier then in this case the people who will be getting benefitted will only be the ones that are directed connected with this business and the ones that will be in loss will be the countries as there will be no management of the foreign exchange. There are many points which should be kept in mind especially by the people that are trying to expand their business because maybe now you are not aware of full scenario and in order to avoid future problems one should be well-aware of this.