Significance of International Trade to UK Businesses Assignment

Significance of International Trade to UK Businesses - Assignment Example According to the research findings acknowledging the significance of international trade UK is trying to simplify trade procedures, promoting best practices, removing trade barriers, and facilitating trade and entrepreneur in every possible manner. A dedicated department the Simpler Trade Promotion Board (SITPRO) is established to address related issues. Policies like Access to Finance are targeted to strengthen the local entrepreneurs’ financial standing in international markets. There are several positive and negative impacts associated with international trade. Entrepreneurs get the liberty of choosing cost effective resources from around the world. Specially, from the countries where cost of living is not as high as it is in the UK. This makes a lot of difference in the total operating cost of an enterprise. Stonehouse & David have discussed such an impact of international trade liberalization on UK job industry. Prudential, a renowned UK-based insurance giant saved  £16 million a year by switching their call centre to subcontinent. Beside low salaries, tax relaxations, huge subsidies and low oil prices are some other factors that may attract businesses in UK and entrepreneur may switch to cost effective markets. The overall impact of these factors may result in a shift of manufacturing units of large multinationals from developed countries to underdeveloped countries where they can operate at low costs and can find new markets for their products. Moreover, it may also result in shift of global imports and exports corridors. Great Britain is commonly perceived to be reluctant member of European Union in adopting joint policies. Social Chapter of 1992, which was adopted by UK in 1998, and common currency adoption are commonly referred to emphasize this perception. However, it implements more rigorously, what it accepts as common interest. (USITC, 2000). Britain joined European Free Trade Association (EFTA) 1960, European Economic Community in 1972 a nd EU in 1973. (Jones, 2004, p. 21). Since then EU, policies and community laws got precedence over local policies and regulations. This joint structuring of financial policies and regulations has been a great bearing on UK international trade. One simple example how EU policies can influence UK trade is that of EU free trade policy between member states. EU is operating on the basic principle of four freedoms, â€Å"free movement of goods, people, services and capital.†(Cullingworth & Vincent, 2003, p. 35). This means custom free trade between member states and a common external tariff for non-member states. The objective of these polices was to achieve a higher level of economic prosperity through elimination of trade barriers. (EUC, 2008, p. 9). Another example, where the impact of EU policies can be traced is the expansion of HSBC bank in member states. The HSBC is a large UK-based concern that is operating in several member states of EU. The