Introduction
This paper analyzes Finland’s trade facts, its comparative capabilities, and how multinational corporations could benefit from trading with that country. In order to achieve this objective, it is necessary to consider the top 5 commodities for imports, exports, and tariff plans. It is then crucial to consider the concept of “comparative advantage” and determine what it is in the country’s context. Finally, deciding on the tariff level and understanding how it affects Finland’s economic interaction with other countries is important.
Country’s Trade Facts
Finland is the name of the country selected from the list. Finland’s top 5 product exports are “petroleum oils,” “multi-ply paper and paperboard,” “coniferous wood sawn or chipped lengthwise,” “semi-bleached or bleached coniferous chemical wood pulp, soda or sulfate,” and “cruise ships, excursion boats” (“Finland trade summary 2020 data”, n.d.). The top 5 product imports are “petroleum oils and oils obtained from bituminous,” “petroleum oils,” “other medicaments of mixed or unmixed products,” “transmission apparatus,” and “automobiles nes (not elsewhere specified) including gas turbine powered.” Finally, it is essential to note that Finland’s simple average (%) tariffs are 2.01.
Comparative Advantage, Product, and Trade Barriers
Comparative advantage is a country’s ability to create goods and services at the lowest costs compared to other regions. Generally, some countries have comparative advantages based on their natural resource wealth, technological advances, labor force skills, and economies of scale. Based on the above data, Finland has a comparative advantage in producing petroleum oils (excl. crude) and is a successful exporter of this product.
The country has relatively low trade barriers, indicating that Finland provides reasonably open access to its market for imported goods. This circumstance stimulates international trade and goods exchange between Finland and other countries. Nevertheless, this information refers to average tariffs, and there are possibilities for individual products and industries to have higher trade barriers.
Conclusion
In summary, Finland is a developed country with many comparative advantages, especially in producing and exporting petroleum oils, multi-ply paper, paperboard, and coniferous wood sawn or chipped lengthwise. In addition, Finland imports essential products such as petroleum oils, medicaments of mixed or unmixed products, transmission apparatus, and more. Notably, the low average trade tariff simply means that Finland has low trade barriers and stimulates international trade.
Reference
Finland trade summary 2020 data. (n.d.). WITS. Web.
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