Question

Small companies typically have difficulty competing against large multinationals when their governments take part in regional trade blocs. What could governments do to help their small companies compete after the formation of such blocs?

Answer Length: 3-4 paragraphs

Thanks!!

The executive branch of the US government needs to lodge a protest through diplomatic channels (the State department). If the matter is not resolved, threat of tarriffs or ejudication may have to be made, if trade agreements are being violated. Such matters are often resolved by special international trade organizations and tribunals that are created by treaty agreement.

A regional trade bloc entails immediate neighbors that only agrees to eliminate trading barriers and also to facilitate the flows of the capital and labor. In order to permute and protect the small industries the government could establish tariffs that would protect intra-regional trade from a outside forces.

Import quotas can be impose limiting the amount of imports in the country so that domestic consumers buy products made by there countries and in there region. Smaller industries could be offered subsidies in form of the government that could offer financial assistances towards sectors of the home economy so that they have an influx of the capital. The policies of the government can be altered with out imposing to much restriction on smaller industries.

It is necessary to permute overall adjustments of industrial structure through the market mechanisms with the ultimate aims of the promoting of welfare of the industries. The level of success of small industries can be achieved in the terms of the relaxation and the elimination of regulation and ensuring of increase transparency in government administration. The governments need to create an environment in witch companies and individuals can displays their form entering and operating in the markets.