TTIP Harvard Case Solution & Analysis

Introduction:

            Transatlantic Trade and Investment is an agreement of free trade agreement between the European Union and United States. This agreement is about the free flow of resources from one economy to another economy. This is an ample opportunity that does exist for a massive growth in the economy of both the regions. It has some benefits for the manufacturers and corporate members because the market becomes wider for them and the target market becomes large. It is a general phenomenon that the benefits come with some cost and the cost has to be bared by the government and the general public of both regions. Due to implementation of this agreement the government may not be able to effectively regulate the economy for the benefit of its own public, there fore this proposal is going to affect the general public of both regions.

Problem statement:

            In this report the analysis is about the contradiction of TTIP with the NMC host countries, foreign direct investment and its effects over the treasury management of entities under both the regions and also the world at large.

Analysis or body:

            TTIP is considering increasing the free trade and funds flow around the world. It wants to reduce the barriers of trade for big businesses. The implementation of this proposal is only dependent upon the willingness and negotiation between the regions.The best example of such plan can be observed in the European Union and the US, where they have such free trade flow (Williams, 2014).

Is TTIP as a part of world globalization?

            The reason behind TTIP implementation is to increase the targeted customers and the opportunity for every company to expand in US and European region through the plan of free trade. In this process, the mobility of resources is easy and it can best utilize the resources of both regions.Free flow of the resources is in the favor of the true globalization, in Europe the free trade is considered to be the first step towards the true globalization. This step for TTIP will give an opportunity to the US and European countries for true globalization beyond the European boundaries and US boundaries.

            Through this step the trend is expected to be followed by the other countries or regions for globalization and such free trade agreements use to pursue towards the true globalization.

Issues arising from TTIP when considering NMC host country relationships.

            In the current era, the firms are moving towards globalization, therefore the firms use direct investment method to open a branch, to franchise and other modes through which the firms can expand their operations outside the boundaries of the country. The mean to expand in other countries is through exporting its product in the international market, open or acquire a subsidiary in the other countries.

            The multinational firms have the option to invest in other countries and they are eligible to invest in the international market, therefore the funds flow is both sides, this is the reason why the international firms are more attractive.

            During the meeting in the host country, the government of host country invites the multinational companies to invite them to attend the meeting related to the operations into the countries and government communicates its targets to the firms or companies. During this meeting, the government has different goals as compared to those companies because the government wants an increase in innovative technology into the country, whereas the firms are willing to generate higher profits rather than expanding on technology extensively.

            The goal is different in other cases, the government is under the view that the local companies must have the higher market shares and revenues and international companies are only operating to increase their own revenues.In order to achieve this, it has to reduce the market share of the local companies of the host country. It is not always necessary that these two conflicts are the case of developing countries.Global companies can increase employment by hiring more people along with the living standard of the host country, therefore developing countries are keen to accept foreign direct investments.

            There are many conflicts that can arise in host country and multinational firms’ relationship, which are defined below under the view of the Ronen conflict model.TTIP Case Soolution

The first conflict is that the multinational company is willing to raise the finance from the host country and the government is of the idea that the multinational company will inject the funds from his home country and its retained earnings. This can increase the funds for the country and FDI can be considered to be better for the host country...................

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