An International regime refers to a global process and a collection of rules, whereas international trade is the exchange of goods, services, and capital across the globe and borders. Stephen D. Krasner defines international regimes as implicit or explicit ideologies, customs, procedures, and decision-making techniques around which actors’ anticipations converge in a particular segment of international relations. Therefore, since they transcend borders, it is essential for them to be regulated hence the international regulator regime. Regimes are formed in response to a need to coordinate behavior among countries on an issue they share. For instance, they deal with trade, communication, human rights, and the environment among others, and their main focus is to ensure that the set rules are followed to the letter.
International Regulator Regime and its Effect on International Trade
Understanding the impact of international regulator regimes on international trade is a complex process that requires being conversant with the tenets and dynamics of the trade. Although technological and political innovations have reduced trade barriers significantly, there are still differences between countries that continue to affect trade. Regulating trade is essential because doing so facilitates faster and efficient exchange and acquisition of goods and services through faster import clearance, duty savings, foreseeable costs, and ensuring that illegal goods are curbed at the borders and charges are levied to those who do not conform to the trade regulation acts. The world trade organization (WTO) governs the rules of international trade, and the regimes help it to do so.
The international regulator regime has some shortcomings. For instance, as more products become digitized, the imposition of tariffs becomes tougher, yet it is essential in this digital era (Leslie and Krzysztof, 2018). Therefore, digitization calls for new regulatory regimes to cater to the new way of sharing goods and services. Moreover, the WTO and other regulatory bodies need to come up with new definitions of what constitutes a good or service to fit into the emerging trends in international trade.
Economic Environment and Regulatory Regimes
The term economic environment refers to the external factors that influence the buying habits of consumers and businesses, thus influencing their performance. Consequently, without regulatory regimes, the economic environment is likely to be impacted both positively and negatively. For instance, without the regulations, goods, and services would flood the markets. Additionally, the absence of tariffs and predictable costs may lead to losses being incurred due to a surplus, thus making goods and services cheaper, which may, in turn, reduce the quality of the products (Nicita et al., 2018). Illegal goods may also find their way into a country’s border hence compromising the country’s economy. On the other hand, the positive impacts include that goods and services might reach their destination faster since they are not checked at the border, and tariffs are not imposed on them. Furthermore, the traders can order and send goods online, which is not only faster but also efficient and flexible, especially in this digitized economic environment.
International regulator regimes are crucial to international trade despite their shortcomings. They help the World Trade Organization to regulate trade on a global scale, ensuring that the countries in which they oversee trade grow economically since they foster innovation and ways to improve the trade market.
Johns, Leslie, and Krzysztof J. Pelc. “Free Riding on Enforcement in the World Trade Organization.” The Journal of Politics 80, no. 3 (2018): 873-889.
Nicita, Alessandro, Marcelo Olarreaga, and Peri da Silva. “A trade War Will Increase Average Tariffs by 32 Percentage Points.” VoxEU. org. Retrieved 2018-04 27 (2018).