The Growth of World Exports

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Third, the strong regional developments have been accompanied by strong growths in merchant dice trade as Table 1 would show. The strong economy of emerging countries is accompanied by strong exports and imports. Fourth, export growth the receives continued support from the world economy. As Table 1 below shows, the combined merchandise exports of major economies integrate into the strong export growth of the world of 6.5% in 2005, 8.5% in 2006 followed by a decline of 5.5% in 2007. In 2007, the effect of the recession is starting to appear as trading slows down in most of the countries, with exception of the emerging economies that displayed its strength beyond the crisis. We have seen China, Asia and India emerged as strong exporters.Tariff and quotas are both methods of controlling imports but the tariff is preferred over the other because of its advantages. Tariff is a tax placed on imported or exported goods while quota is a government imposed limit on the importation of goods. Tariff is a source of revenue for the government and frequently imposed to protect domestic producers from foreign competition (Boyes amp. Melvin, 2000.p. 494). For instance, a country that does not produce cars may place a tariff on imported cars. The quantity imported will be controlled because of the increase in price and the lessened demand for the cars because of the price. The tariff has an effect of reducing importation.The quota is another government tool that puts a limit to the quantity or value of goods and services imported and exported. A quota may be imposed through quantity quota or a value quota. In a quantity quota, the physical amount of good is restricted. For example, the United States has a U.S. quota for its sugar importation that is set yearly that depends on their domestic needs. For 2010, U.S. quota based on quantity is 1.471 million of sugar (Bjerga, 2010). Another kind of restriction related to quota is valuing quota that restricts the money value of the product, so instead of physical quota, the U.S. could limit the dollar value of sugar imported (Boyles amp. Williams, 494)