Examples of winners and losers from international trade Research Paper

Examples of winners and losers from international trade - Research Paper Example Also known as the sellers. The main aim of trade is to get profits and this is greatly received by the producers of the Chinese products that are exported to other countries such as USA. International trade also exists between countries such as Brazil and Japan. Japan is a renowned producer of motor vehicles, non-electrical machinery, tools and mechanical apparatus, iron and steel products just to name a few. Brazil on the other hand is a renowned exporter of soybean, orange juice, iron ore, oil, coffee and raw sugar. Trade between these two countries has winners and losers just like the previously mentioned between USA and China. The winners in the trade are the consumers in the country buying the products. For example in this case, when Brazil exports its products to Japan, the winners are the consumers or the people buying the products in Japan. Other winners are the producers of the products in Brazil who sell the produce or export the produce to Japan. The losers involved in thi s example of trade are the producers of the similar type of imported products in Japan. The producers of the similar type of products imported are losers because they will not have market for their products in Japan. The consumers of the exported products in Brazil are also losers in the trade. This is because most products produced are exported hence there will not be available products for the consumers to use. International trade involves several laws. One of them being the law of comparative advantage. The law of comparative advantage is a fundamental economic principle that explains the disparities experienced in trade between rich and poor nations. It states that every country production...International trade involves several laws. One of them being the law of comparative advantage. The law of comparative advantage is a fundamental economic principle that explains the disparities experienced in trade between rich and poor nations. It states that every country production activi ty that provides a lower opportunity cost than that of another country. It explains how and why there is an inclination by technologically superior countries to purchase goods from technologically inferior countries. This in essence means that both the trading nations can benefit mutually by each country producing goods with lower levels of opportunity costs. This is aimed at balancing the economies of scale as far as international trade is concerned. This can be further divided into two related concepts: †¢ Absolute Advantage: This refers to the ability of a country to produce more goods using fewer resources. This in most cases is facilitated by superior technology as employed in the processes of production, manufacturing and transportation therefore developed nations have an absolute advantage over the developing nations which are yet to utilize technology in its entirety. Hence the developing nations are mainly net importers while most developed nations are net exporters. †¢ Comparative Advantage This is the ability of a country to produce one type of food at a much lower opportunity cost than other goods, as compared to production in other countries.

Taxation and you must use Ireland taxation to do this essay

Taxation and you must use Ireland taxation to do this - Essay Example Failure to retain it, it will expose Sonya to parents original CGT that was evaded by Retirement Relief and any CGT liability on their own disposal. This implies that there will be no capital gains tax liability when Tom transfers the business to Sonya. Disposal of shares in family trading company to Sonya will require standard qualifying conditions, control voting rights requirement and working directorship for 10 year and 5 year periods. Sonya must also own 25% or more of the voting rights in the company or own 10% or more of the voting rights in the company. In addition, the family must own 75% or more which includes the individual’s own 10% throughout the 10 year qualifying period. ii) The transfer of the business to the local businessman is also qualifying since Sonya is above 55 years and it involves the transfer of shares in the family trading company. Disposal to others are exempt from CGT if the gross sales proceeds from qualifying assets during the individual’s lifetime from the age of 55 onwards does not exceed â‚ ¬750,000. In the case of sale to the local businessman, the amount of 850,000 exceeds the set limit of 750,000. The capital gains tax liability will be calculated as follows b) If Tom transfers his business to his daughter, there will be no capital gains tax liability, but when he sells the business to the local businessman there is a capital gains tax liability of 50,000. This can be analyzed in the sense that an increase in the capital gains tax liability minimizes tax liabilities. Therefore, Tom should consider selling the business to the local businessman so that he can minimise the tax liabilities. It will also help to minimise the requirements of directorship and control of voting rights. There is no consideration if Sonya agrees with Tom to take over the business now since it is within the family and she has worked for 5 years plus the current year. However, if Sonya