Political, economic and cultural motives for governments in interfering with international trade
The political arguments specifically for trade intervention are designed to protect jobs and entire industries by protecting national security as well as political retaliation. In the case of politics, if the Government of the UK tends to develop the tariff income through the imposition of higher duty rates, this might choke off the import flow and minimize the tariff revenue in place of increasing this. The growing influence of China on the world has already generated profound impacts on the economy and political decisions of their partner countries. Hence, against the trends of globalization worldwide, the international politics of the K might not become more cooperative. However, the political tensions might create hindrances on all the aspects of financial integration such as investments, trade, transport, supply chain and logistics in the UK. On the other hand, the culture requires some protection even in nations that mainly support free international trade. Unanticipated cultural influence within the nations may force the government in restricting its imports from the other nations which may create hindrances in international trade.
Rise of nationalism and protectionism in various parts of the world
Protectionism may take several forms involving licensing, tariffs procedures for both the exports and imports and also mandatory needs for the local value indeed in the public procurement or the approval for market access. While the media discusses nationalism at present, this mainly involves nationalism which includes isolationism, protectionism and even anti-elite discourse. Hence, British nationalism remains a civic nationalism with both diversity and cohesion in the UK. On the other hand, across the globe, protectionism has been on the rise which is mainly driven by the growth in nontariff and also tariff barriers. Hence, rising protectionism may harm the activity of business and trade. With the rise of protectionism globally, trade openness has also declined in the case of public support. In the year 2018, the Trump administration has already imposed tariffs on around $283 billion of US imports. Hence the US partners, particularly China has retaliated with tariffs on around $121 billion, plunging the US into larger sale protection of competitive tariff since the time of the Great Depression (Sukar, & Ahmed, 2019).
Methods of the governments to increase or restrict international trade
Both the chosen countries, UK and Australia may follow different methods in increasing or restricting international trade. The UK government tends to support unrestricted and free trade and has also championed international trade firms such as the EU and World Trade Organisation. Due to its dependency on trade, the UK has few restrictions on foreign investments and trade. To increase international trade ad foreign investments, the British Government has adopted various programs such as Parliament allowing the regional and local governments in setting up enterprise zones.
On the other hand, Australia seems to have a comparatively open market with minimal restrictions on the services and products’ imports. This has ultimately stimulated growth and productivity with economic flexibility (Dfat.gov.au, 2021). Australia has specific commitments under the World Trade Organization on the tariff and its quotas, export subsidies as well as domestic support specifically for the agricultural products. Hence, the declaration for the imported goods needs to be made to the Australian Border Force that enforces restrictions of import (Austrade.gov.au, 2021).
Extent to which the selected product may attract the government’s attention
The selected products of Warmtastic Company, the weighted blanket may grab the attention of the government as the high rate of anxiety and the sleeplessness among the UK population is pointed with the product benefits.
Difference between foreign direct investment and portfolio investment
Foreign direct investments mainly refer to the investments made by the individual or the organization in a specific nation in a business located in another nation. On the other hand, foreign portfolio investments refer to the securities purchased along with other financial assets by investors from another nation.
Explaining appropriateness of FDI for chosen products for the two chosen nations
The FDI would be appropriate for the UK markets as its economy is one of the most liberal in Europe and the environment of business is also extremely favourable. Besides this, the FDI in Australia would also be appropriate as it helps in boosting the productivity, infrastructure along with high employment opportunities in the case of Warmtastic Company.
