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How does a country's economy affect neighboring
Economy of one’s country can affect neighboring countries in terms of
pursuing their own individual interests in a market society and make another nation
richer. An example to that is international trading in which they produce products
by getting raw materials from another country. Another thing in trading is when a
country usually lacks resources, it benefits them in a way that they can make
another product and export it to other nations. Examples of countries that lack
natural resources are Indonesia, Ivory Coast, Haiti, Somalia (oil, metals, agricultural
products). There would be a positive effect in trading, which takes place when a
country have made a good product thus it will be known and people will be likely to
buy more from them because they think that there’s a lot to buy with and their
productions are much better than the others. Therefore more jobs are created for
those unemployed workers. On the other hand, it can be a negative effect somehow
because if a country’s merchandise is not salable or it lacks supplies to produce the
product they want to make, they exchange it to other countries. As a result,
employees that are in charge of the alternate product will be unemployed.
With reference to trade agreements these countries (China, Philippines,
South/North Korea, Saudi Arabia, Nigeria, Ivory Coast, Somalia) established
guidelines or policies with respect to import and export taxes of goods and services
that they trade to one another. For example, in US territory MFN status (most
favored nations) is also referred to as normal trade relation status or NTR. All
countries with NTR status pay the same tariffs, though imports from non-NTR
nations may be taxed at a higher rate. Some countries specifically in Europe they
signed an agreement to remove tariffs and trade restrictions among member
nations, this group is also known as European Union. Members of this EU (European
Union) eliminated tariffs on countries exports and they have created a single market
within the region, which is also known as EEC (European Economic Community).
European Union is the largest organization in the world that comprises of 27
countries which includes Soviet nations which have been forbidden to trade with
the rest of Europe because of its previous status as a communist country but now it
has changed to a non-communist and open its ports to trade with other European
nations. And this ECC community also develops a uniform currency in the form of
Euro for their trading. In Southeast Asia they also have an organization called APEC,
which stands for Asia Pacific Economic Cooperation. They have signed a nonbinding
agreement to reduce trade barriers.
GDP (Gross Domestic Product) of a certain country affects its neighboring
countries by generating employment and helps the host nation in utilizing its
natural resources and manpower in the production of goods and services. And in
turn, the host country also benefits from the multinational foreign investors from
the taxes of employees salaries and from the company itself.
Fluctuations of oil prices for the past years and the projection in two years
look ahead for Saudi Arabia’s world trade price forecast by Saudi American Bank.