"Overall, TPP is a very positive agreement for New Zealand, further improving access to international markets, which supports our exporters to grow and create new jobs. New supports the release of the text before it is signed by TPP governments but arrangements yet to be finalised. TPP, like any free trade agreement, will go through New Zealand's Parliamentary processes. We expect it to come into force within two years."
Part A:
Assesses:
Learning Outcome:
Students will analyze the impact of operating in global context on entity goals ad on modern business practice by applying knowledge of the constructs of the international business environment and international trade.
Questions:
1. Define the term international trade and explain the supposed economic benefit of embracing mercantilism as an international trade theory? Are there many disadvantages to the use of this theory?
2. i) Compare and contrast theory of absolute and comprative advantage.
ii) New Zealand is constantly seeking market niches In order to bolster its economy and the TPP is a conspicuous example of that. Explain how the theory of comparative advantage holds true in this case.
3. New Zealand entered in to a free trade agreement with China in 2008 and recently signed a TPP agreement with 11 other nations. Use factor endowment theory in order to explain the rationale behind these two agreements.
4. Countries often create trade barriers in order to support their local producers. Identify and elucidate five reasons for trade barriers?
5. Non-tariff barriers have become increasingly predominant in recent years. Describe a non-tariff barrier, and evaluate any four types, explaining how New Zealand does or could use such a device.
6. Describe and analyse the mechanism of the following trade barriers:
a. Price based barriers
b. International price fixing
c. Financial limits
d. Foreign investment controls
7. Explain the following tariffs:
a. Import tariff
b. Export tariff
c. Transit tariff
d. Specific duty
e. Ad valorem duty
f. Compound duty
Discuss in detail the impact of tariffs on prices of goods/commodities with the help of a supply-demand diagram and justify as to why NZ government has been constantly attenuating Tariffs over the last decade.
8. After reading the case meticulously, explain in detail any two techniques that New Zealand government is currently using or can use in future to promote international trade and there by strengthen NZ economy.
9. Analyse and discuss the role of World trade organisation (WTO) in modern international trade.
Part B:
Learning Outcome 4: Students will identify specific risks facing an entity, both nationally and internationally and apply knowledge of the principles and practices of risk management.
Question:
Suppose that Wal-Mart wants to enter the NZ market, as a part of TPPA. From the following entry modes, recommend one that will be most suitable and beneficial to Walmart for its international expansion:
a. Exporting
b. Licensing and Franchising
c. Partnership and Strategic Alliances
d. Acquisitions
Also, elucidate the risk management practices the company can follow in order to minimize the threats/risks associated with the recommended entry mode. You are expected to explain the risk management practices by creating a risk management plan for Walmart.
Your plan should include the following key points:
a. Risk identification
b. Risk analysis-Qualitative and Quantitative
c. Risk response planning
d. Risk monitoring and reporting