Exports and free trade:

Pros:

The theory of comparative advantage materialized during the first quarter of the 19th century in the writings of 'classical economists'. While David Ricardo is most credited with the development of the theory (in Chapter in full chapter 7 of his Principles of Political Economy, 1817)[7], James Mills and Robert Torrens produced similar ideas. The idea stems from a country that is able to produce a commodity at the lowest of all countries, should be encouraged by removing competition. However, the process doesn't work if one country is able to produce more than one commodity more efficiently and able to offer it at lower prices. The single commodity with the greatest difference in terms of low prices is encouraged to increase production, while the second and subsequent commodities should either be decreased in levels of production, or removed altogether.

Cons:

Mercantilism, the first systematic body of thought devoted to international trade, emerged during the 17th and 18th centuries in Europe, especially England. While most views surfacing from this school of thought differed, a commonly argued key objective of trade was to promote a "favorable" balance of trade, referring to a time when the value of domestic goods exported exceeds the value of foreign goods imported. The "favorable" balance in turn created a balance of trade surplus.
 
Export Promotion:

Export Promotion is an International Marketing Strategy of Business Management. Nowadays every Individual and country applying extra ordinary Export Promotion Techniques to increase the volume of Exports. For the process of Export Promotion, Marketing communication is the first and foremost thing. To deliver or Communicating any kind of information, expertise and specialization Media is most important thing. For your product Export promotion first analyze Cost of promotion and reachability of media. There are a number of medias are available for Export Promotion.

1. Print Media (Export Directories, Journals, Magazines etc.)
2. Electronic Media (TV. Radio, etc.)
3. Internet (Search Engines, Business Directories)
4. Other Media (Trade Fairs)

In the above media Internet is cheapest and most reachable media for Export Promotion. For internet promotion Exporters should be Visible on Different Business Directories, B2B Directories, and also on Search Engines.
 
Tariffs:

A tariff is a tax placed on a specific good or set of goods exported from or imported to a country, creating an economic barrier to trade.
Usually the tactic is used when a country's domestic output of the good is falling and imports from foreign competitors are rising, particularly if there exist strategic reasons for retaining a domestic production capability.
Some failing industries receive a protection with an effect similar to a subsidies in that by placing the tariff on the industry, the industry is less enticed to produce goods in a quicker, cheaper, and more productive fashion. The third reason for a tariff involves skirting of what is called dumping. Dumping curtails a country producing highly excessive amounts of goods and dumping the goods on another foreign country, producing the effect of prices that are "too low". Too low can refer to either the price of the good on from the foreign market being lower than the domestic market. The other reference refers to the producer selling the product at a price in which there is no profit or a loss. The purpose of the tariff is to encourage spending on domestic goods and services.

Protective tariffs protect what are known as infant industries that are in the phase of expansive growth. A tariff is used temporarily to allow the industry to freely grow without the level of competition usually garnered. However, this line of debate is only valid if the resources are more productive in their new use than they would be if the industry had not been started. Also, the industry eventually must incorporate itself into a market without the protection of government subsidies.

Tariffs create tension between countries. Examples include the United States steel tariff of 2002 and when China placed a 14% tariff on imported autoparts. Such tariffs usually lead to filing a complaint with the World Trade Organization (WTO) and, if that fails, could eventually head toward the country placing a tariff against the other nation in spite, to impress pressure to remove the tariff.
 
Subsidies:

To subsidize an industry or company refers to, in this instance, a governmental providing supplemental financial support to manipulate the price below market value. Subsidies are generally used for failing industries that need a boost in domestic spending. Subsidizing encourages greater demand for a good or service because of the slashed price. The effect of subsidies deters other countries that are able to produce a specific product or service at a faster, cheaper, and more productive rate. With the lowered price, these efficient producers cannot compete. The life of a subsidy is generally short-lived, but sometimes can be implemented on a more permanent basis.

The agricultural industry is commonly subsidized, both in the United States, and in other countries including Japan and nations located in the European Union (EU). Critics argue such subsidies cost developing nations $24 billion annually in lost income according to a study by the International Food Policy Research Institute, a D.C. group funded partly by the World Bank. However, other nations are not the only economic 'losers'. Subsidies in the U.S. heavily depend upon taxpayer dollars. In 2000, the U.S. spent an all-time record $32.3 billion for the agricultural industry. The EU spends about $50 billion annually, nearly half its annual budget on its common agricultural policy and rural development.
 
 
 
 

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