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Literature Review (Trade policies)

In this article, FDI is seen as one the trading policy to solve the problems on the costs of the trade production in a nation, therefore trade protection is needed to protect the firms from unfair rules of trade. Industry measures is used to control the trade protection programs on firms to prevent them from exploiting the loopholes and escape from the tariff duties that they are supposed to pay. One of the alternative is provide anti-dumping measures which apply specific anti-dumping duties to the large firms to prevent the company from selling products that are below the cost price. Although it can help to keep the jobs for the domestic workers, it might lead to an increase of prices for the consumers and affect the competitiveness of local firms that are producing the same products. The second key reason is the support of tariff-jumping in measures of trade protection because many exporting small companies are unable to fork out the required costs. So trade protection most likely will involves in import sources and FDI is onto the studies of institutions and corruptions. Although Thailand has a list of selection criteria for any type of foreign industries to accept, however Thailand can restrict quota of companies to invest locally to prevent from too much ownership of foreign companies and reduce the competitiveness of the local firms.
http://link.springer.com.ezproxy.lib.rmit.edu.au/content/pdf/10.1007%2Fs11293-005-2868-9.pdf Literature Review (Trade Barriers/Trade policies) This journal analyses about countries with lesser trade barriers might experience faster economic growth and the key factor will be policies towards the foreign trade. However, there are restrictions like the measure of tariff rates and the ratio of converting non-tariff barriers to trade. The advantage is able to let the country enjoy a steady increase in the economic growth. As for the disadvantages, if the nation experiences low imports levels, then high tariff rates have to be imposed and deter foreign companies from exporting locally. Although trading policies can increase the welfare of the countries without affecting the economic growth, but it does not mean by having a restriction on the policies will reduce economic growth. In conclusion, it become most costly for domestic firms compared to foreign companies and in the long run, consumers may have lesser choices. The restrictions to trade policies will cause the country to face a decrease in competition and economic of scale. Although Thailand have a lot of trade agreements to boost competition and economic growth, but domestic firms might face destruction due to overwhelming of foreign companies taking a large share of the market. So Thailand has to review on its trade policy to help the local firms from losing on their foothold in the market. http://www.nber.org.ezproxy.lib.rmit.edu.au/chapters/c11058.pdf

Literature Review (Trade Barriers)

Based on the article, due to the high average tariff rates and the dispersion of the products, consumers will back off on decisions buying the products. As the duties of processed food products are very high, local firms will find it hard to gain a foothold on the market. As the tariff rates for finished products are always higher, therefore it is very difficult to know the effects on the resource allocation of the tariff system. Because of the tariff escalation, the growth of domestic in manufacturing become very slow and Thailand is unable to promote the domestic output of final goods yet. In order to promote the import-substituting products and exporting activities, Thailand has been focusing on the operating network but run into problems like distribute the resources efficiently. Although Thailand has tried to solve the anti-export bias, the optimal result fall below the expectations for manufacturing sector, therefore Thailand has decided to switch its focus to other sectors like plastic products and leather goods. The economy of Thailand has incurred huge costs because of the tariff effects and inter-sectoral linkages. Because of the wrong allocation of production factors, higher tariff rates are applied on electrical industry due to higher prices of the raw materials. As the prices on agricultural goods also increased, the farmers experienced drop in profits of selling the agricultural products. From the trading barriers and the challenges that Thailand faced, the tariff and non-tariff barriers show how slow Thailand is progressing. In order improve on these respective issues, Thailand can consider reduce WTO tariff reduction commitments and eliminate non-tariff barriers like custom barriers. By doing so, Thailand can have more opportunities to improve on its economy and freed from those rigid trading policies.

http://hompi.sogang.ac.kr/gsis/contents/faculty/heo/Vietnam%20Thai%20Tariff.pdf Literature Review (Facilitate Trade) From the review of the current article, the introduction of small-and-medium-sized enterprises(SMEs) is a crucial factor in boosting the economy of the country. They have to go through phases of trade liberalization and economic modernization to survive in the long run, competing with large firms from import and export markets. From the trade facilitation(TF) in Indonesia, measures has already been taken to increase the goods and services for import and export activities. The objective is to reduce the costs of transaction for the SMEs even though Indonesia have to face current obstacles such as poor infrastructure. trade regulations, inefficient transportation network and custom procedures. As Indonesia is the facing the problem of having poor facilities in rural area, it is hard for SMEs to do export activities due to the high cost. Another problem is exporting activities normally is done indirectly through third party logistics and will face problems such as documentation and will take longer time than expected to finish the tasks. Thailand can use Indonesia current problems as a guide to prevent itself from running into similar obstacles and can consider explore more additional transportations networks for better business opportunities for the SMEs. http://www.unescap.org/tid/artnet/mtg/Tulus%20Tambunan.pdf

Literature Review (Trade Flows) From this journal, understanding the expansion of informal labour markets and trade liberalisation can see the linkages of these 2 factors affecting the expansion on the current economies of different countries. In the long run, the labour market will determine the degree of success of the current trade situation and lead to better economy growth for the country. Because of the opening of new trade, there will be an increase in competition from the exporters and lead to uncertainty in product demand and domestic firms will have to rely more on informal labour market to beat off other competitors. Because of the expansion of a new trade sector, the volume of the exports may expand depending on the restrictions of the trade regulations. At the same time, the trade can increase the income of the country and lead to better standard of living for the people. In addition, governments can allocate the resources to better beneficiaries by helping the domestic labour to become more competitive and productive to raise the standard of trade flows in the country. Although Thailand has foreign companies to outsource IT knowledge to domestic labours, increasing their skills and knowledge, it should explore other unique IT skills to attract more investors to outsource their operations locally. http://www.oecdilibrary.org/docserver/download/5kg3nh4xwxr0.pdf?expires=1379131776&id=id&accname=guest&c hecksum=13FBC253977F207E536A1529DE7EDA9B