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Posted on August 17th, 2012, by

Preferential trade accords are tools which facilitate international trade. As a rule, preferential trade accords eliminate fiscal barriers between countries to stimulate trade in certain industries, such as apparel industry. Such accords are signed when two or more countries need the stable supply of certain products and they can export their own products in the partner-countries. In other words, a country can accord preferential conditions of apparel import from another country and, in exchange, the latter allows the export of agricultural products on privileged conditions. In such a way, preferential trade accord proves to be profitable for both countries. In such a situation, an apparel company can benefit from gaining access to the new market, but, on the other hand, other countries can introduce quotas to defend their own markets from the company’s expansion.

Labor standards vary worldwide, but it is important to develop universal standards since many companies, especially apparel companies, operate worldwide. The establishment of universal standards is possible when these standards can be evaluated properly. In this respect, it is possible to use a set of criteria for evaluation of labor standards, such as the level of wages compared to average wages in the target country, the amount of working hours, which should not exceed eight hours per day or forty hours per week, the age of employees, who should be eighteen or older. In addition, it is possible to establish minimal health care and vacation standards. Apparel companies can establish these standards worldwide and launching their business in developing countries they can stimulate the development of local economies improving the quality and standards of life there and stimulating other companies follow their example.

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