Foreign trade zones are created when X country designates an area as a “customs point of entry’ here commercial merchandise would receive the same treatment as if it were outside the commerce of X country. It is free of certain duties and taxes (Satterlee, 2009). I am interested in this term because my BRAC country of India depends on exports to finance a portion of their economy. Not only do foreign trade zones help resources make their way around the world, but they are good for relations among the nations. “The FTZ program provides a number of cost-saving benefits to zone users… ver the last half-century, many of the world’s nations have participated in a series of multilateral trade negotiations. The success of these negotiations has lowered tariffs and other trade barriers since the dark days of the early 1930s” Cones, 1994). Main newarticle Summary and Relation to Key Term The newarticle I selected to write about was a scholarly Journal newarticle called, “Challenges of International Business before SAARC Nations: Some Reflections” from the International Journal of Global Business, December 2011. The newarticle greatly helped me understand FTZs and how they can benefit Asian nations to include India.
I learned about the SAARC: South Asian Association for Regional Co-operation that as founded in December 1985 made up of India, Bangladesh, Bhutan, Pakistan, Maldives, Nepal and Sri Lanka (Gabriel, 2011). SAARC is planning establishment of a South Asian Foreign Trade Area (SAFTA). However, the agreement to establish this foreign trade zone will take 10 years of gradual tariff reduction (Gabriel, 2011). Right now, the general consensus among South Asian countries is that they have to come together to improve their economic situation.
They remain in poverty and underdeveloped. They would benefit from the four economic integration schemes I earned about in the newarticle. They are: foreign trade zones, customs unions, a common market, and an economic union. However, I learned that India and the other nations in the SAARC are not developed as much as they need to be to be successful. The newarticle detailed goals that SAARC needs to have to lead them to success within the economic integration schemes. It outlined the need to establish SAFTA, a South Asian Customs Union, and a South Asian Economic Union.
The newarticle also provides useful information on South Asian exports and business culture, all of which helped e understand FTZs and is useful for my BRAC research. Discussion Regarding Related Journals In order to nelp me ana my peers unaerstana wny a Forelgn Iraae Lone nelps gloDal commerce, and to enrich my understanding of business in Asia, I needed to pull my other four articles into this exercise. “FTZs often provide relief from inverted tariff situations by allowing the U. S. -based FTZ user to receive the same duty treatment on its foreign content as its offshore competitor,” Jones, 1994.
If other nations formed FTZs, such as the United States has, like the SAARC needs to do, it would build the conomy in their nations and reduce the poverty they face. However, I learned that FTZs do not look glamorous to countries in Asia, especially India, when I read an newarticle by Jason Fultz about unrest in India. Mr. Fultz wrote that because FTZs lead to more building and less land, Indians who are resistant to losing their land are not in favor of more trade. “In India, as in much of the global South, land is life.