A country is said to truly have a trade deficit if its total imports exceed its exports. This is called negative balance of trade. On another hand, a trade surplus occurs when the total level of exports exceeds the total level of imports. That is otherwise called an optimistic balance of trade. Both scenarios have advantages and disadvantages but an optimistic balance of trade means a country has greater level of financial leverage when it comes to price control and income.
The complexity and competitiveness in global trading resulted in two conflicting paradigms, namely, free trade and protectionism. Free trade is made possible by regional economic agreements among sovereign states such as APEC, NAFTA and GATT. These trade agreements are targeted at improving economic cooperation and reducing barriers among participating sovereign nations.
Balancing of trade, however, becomes more difficult for poorer countries which do not have sufficient resources and technological advancement to compete in the global market. As a result, some poor countries become influenced by importing goods from other more economically developed countries. This dependency somewhat resulted in greater poverty in other regions.
Custom brokers and freight forwarders have important roles to play in global trades but they are restricted by the prevailing regulations and trade agreements customs broker Chicago Brokers are obliged to pay tariffs, duties, and excise taxes for their clients. It can also be their role to ensure that all the required documentations are complied with. They need to also ensure that the goods being imported or exported will comply with the quarantine policies and other prohibitive policies of the jurisdictions.
Specific trade policies and taxation systems vary depending on the jurisdiction. Hence, it is very important that brokers must be well-versed regarding these statutory regulations. In this manner, brokerage firms and custom agents help the traders and the governments.
Global trade is essentially facilitated by custom brokers and freight forwarders. They ensure that the goods being imported and exported comply with local and international regulations. They alleviate the burden of traders when it comes to legal procedures and documentations. At once, they help the regulatory authorities enforce the applicable laws and international trade agreements.
It’s not really a co-incidence why highly industrialized countries have proportionally greater amount of brokerage firms, professional custom brokers and custom enforcers. The quantity of trades when it comes to exports and imports in economically advanced countries is high. Hence, it is not surprising that there is greater need for the services given by brokers.
The standard, security, and monetary value of goods being traded are directly related to how these goods are handled through customs. The existence of both conflicting paradigms of protectionism and free trade has significantly changed the profession of custom broking. Conversely, the profession itself has contributed not just in the enforcement of regulations and international agreements but also in formulating them.Business