Regional Trade Blocs

Date: Friday, 12 May 2006

From: Emanuel Cardona

Subject: un3db_cardona

Regional Trade Blocs

BUS 230 International Business

Emanuel Cardona

May 12, 2006

Regional Trade Blocs

Small companies typically have difficulty competing against large multinationals when their governments take part in regional trade blocs, however, government can help their small companies compete in several ways.

One approach is for the government to provide subsidies (directly or indirectly via the tax code). Governments giving resources, for example, land, to business or governments make purchases above market prices. Reward companies through the tax code, lease government resources, like land, below market rates are one of many ways.

Governments may consider to purchase from them (small companies) since governments tend to be relatively large consumers. Furthermore, provide assistance to domestic producers in closing trade deals (Wild et al, 2006).

Other examples may include labeling regulations like in the EU. Labeling regulations in the EU are based on what can be labeled, for example, Champaign (Wild et al, 2006). Product regulation--specify product requirements that foreign business will have trouble complying with

Another is government guaranteeing small business loans (www.sba.gov, www.business.gov,