That said, it is worth knowing that, in the last few years, there has been a rise in non-tariff barriers such as import quotas as countries have struggled to achieve real economic growth and as a response to persistent trade and current account deficits. Borders have opened and average import tariff levels have fallen. Old forms of non-tariff protection such as import licensing and foreign exchange controls have gradually been dismantled. Many countries have become engaged in tax competition between each other in a bid to win lucrative foreign investment projects. The desire of businesses to benefit from lower unit labour costs and other favourable production factors abroad has encouraged countries to adjust their tax systems to attract foreign direct investment (FDI). Many emerging countries have their own transnational corporations Differences in tax systems If the MES is rising, a domestic market may be regarded as too small to satisfy the selling needs of these industries. Many economists believe that there has been an increase in the minimum efficient scale (MES) associated with some industries. Rapid and sustained technological change has reduced the cost of transmitting and communicating information – sometimes known as “the death of distance” – a key factor behind trade in knowledge products using web technology Economies of scale The lower unit cost of shipping products around the global economy helps to bring prices in the country of manufacture closer to those in export markets, and it makes markets more contestable globally Technological change The costs of ocean shipping have come down, due to containerisation, bulk shipping, and other efficiencies.
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